TUA's submission on the draft Government Policy Statement on Housing and Urban Development 2025

Hopefully you all had time to put your submissions in! Here's The Urban Advisory’s submission on the Government Policy Statement on Housing and Urban Development (GPS-HUD) 2025.

Our response acknowledges the Government’s vision for thriving, resilient communities and the steps outlined in the draft GPS-HUD. However, we believe the real test will be in the depth and ambition of its implementation.

Key themes from our submission:

• The urgent need to clearly define and deliver genuine housing affordability.
• Structuring the Flexible Fund as a long-term, sustainable investment—drawing inspiration from Australia’s Housing Australia Future Fund.
• Rethinking subsidy mechanisms to create enduring public benefit and mobilise institutional investment.
• Prioritising urban regeneration, precinct delivery, and true public-private partnerships to unlock housing supply in well-serviced locations.
• Using robust data—like our NZ Housing Survey—to measure success beyond just supply numbers, focusing on housing choice, tenure security, and quality of life.

We’re committed to supporting the Government in turning policy into action and building a housing system that truly meets the needs and aspirations of all New Zealanders.

Read our full submission here:‍

To: Hon Chris Bishop, Minister of Housing; Hon Nicola Willis, Minister of Finance

From: The Urban Advisory

Date: 16 September 2025

Subject: Submission on the Consultation Draft of the Government Policy Statement on Housing and Urban Development 2025 (GPS-HUD)

Introduction

The Urban Advisory welcomes the opportunity to provide a submission on the draft Government Policy Statement on Housing and Urban Development 2025. We commend the Government for producing a document that correctly identifies many of the systemic, long-term challenges facing Aotearoa New Zealand’s housing and urban development system.

The vision that "Everyone in New Zealand lives in a home and within a community that meets their needs and aspirations" is one we wholeheartedly support. We are encouraged by the focus on core principles such as creating thriving and resilient communities, resetting investment to help those most in need , and the frank acknowledgement that the current approach to housing support is "complicated, unfocused, duplicative and expensive".

As a specialist consultancy focused on rethinking our cities, our work is grounded in our proprietary data, international best practice in regeneration and precinct delivery, and a deep understanding of the New Zealand housing system. Our submission is informed by our extensive research, including the findings from our inaugural New Zealand Housing Survey , which, in its first iteration, captures the nuanced needs and aspirations of over 2,500 New Zealanders.  This is just the beginning; by committing to run this survey as a longitudinal study, The Urban Advisory will build the most comprehensive dataset available on housing demand.

While we support the strategic direction of the GPS-HUD, we believe its success is entirely contingent on the depth and commitment of its implementation. This submission will outline our support for the document's direction, highlight areas where we believe some detail and ambition are lacking, and propose tangible, mutually beneficial opportunities to translate this policy statement into meaningful action.

Commendation of Strategic Direction

We wish to acknowledge several strengths within the draft GPS-HUD that align with our core principles and research.

• A Systemic View: The document rightly frames housing within a broader system, acknowledging the interplay between land markets, infrastructure, regulation, and social support. This moves the conversation beyond a simplistic focus on supply towards a more sophisticated, system-based understanding.
  
  
• Resetting Investment: The recognition that over $5 billion is spent annually on housing support with poor outcomes is a critical and welcome admission. The desire to reset this investment to be more deliberate and evidence-based is the most promising aspect of this GPS-HUD.
  
  
• Place-Based Approaches: The commitment to place-based solutions, working with local partners to deliver the right mix of initiatives, is fundamental to successful housing outcomes but also urban regeneration and precinct delivery. Great places are not created by top-down mandates alone; they require genuine collaboration.
  
  
• Focus on People: The objective of "Right house, right place, right people" and the stated intent to better understand the needs of specific population groups resonates strongly, and is the topic of much of our own research. Our NZ Housing Survey affirms that New Zealanders have a growing appetite for more housing choices that cater to different life stages, financial situations, and cultural needs.

5 Key Observations and Corresponding Recommendations from our Review of the DRAFT GPS-HUD

The GPS-HUD would be greatly strengthened by having a clear implementation pathway. It presents a compelling diagnosis but then has a vague prescription of what to do next. We urge the Government to build on this foundation by considering some concrete actions, such as.

1. Defining genuine 'affordability' goes hand in hand with really delivering it

The GPS-HUD frequently mentions affordability  and "affordable rentals"; we’d be remiss if we didn’t begin by raising the importance of having this clearly defined. Without a clear definition and delivery mechanism, 'affordable' remains an empty platitude. Our NZ Housing Survey paints a stark picture of the human cost of unaffordability: nearly 60% of respondents are making sacrifices to meet housing costs, including delaying doctor visits (24%) and economising on food (21%), this is despite many respondents having average or higher than average incomes. We hope to assess more data in the coming year to understand even more the effects overleveraging due to housing costs are having.

High housing costs negatively impact productivity by increasing commutes, decreasing disposable income, limiting access to high-wage jobs, and diverting investment from other productive activities. Getting the right homes in the right places for the right people means freeing up land so, for example, nurses can live near hospitals.

Furthermore, the goal of "enabling efficient land markets" must not inadvertently sideline the development of homes that are not for private sale. Without safeguards, freeing up land will simply result in the "highest and best use" being market-rate housing, leaving affordable providers unable to compete. We advocate a balance to serve all parts of the housing continuum, including the assisted ‘missing middle’ options that act as stepping stone products in many jurisdictions overseas.

Corresponding Recommendations: 

• Define 'affordability' in policy as a clear percentage of median household income for a given region, with tiers for different levels of need.
• Safeguard land for affordable housing through mechanisms such as inclusionary zoning, a right of first refusal for CHPs on surplus Crown land, and long-term ground leases that remove the cost of land from development equations.
• We support Minister Bishop’s comments from May 2025: “Affordable rentals allow people to pay less than the market rent in a region. They are a missing link in the social housing system. There should be an intermediate option between traditional social housing, where people usually pay 25 per cent of their income, and market rentals.”
• Supercharge larger developments of affordable housing - currently our system enables the delivery of housing on a small scale but that we need to supercharge this and get comfortable with scale-driven affordable housing developments.

2. The Flexible Fund is a critical opportunity to build a mature, diverse housing market

The GPS-HUD references the flexible fund (as established in the Budget 2025 in May) to simplify investment. A fund to be able to deliver more variety when it comes to affordable housing products is a great thing. However, there is no detail yet on how this fund will be capitalised or deployed. This vagueness risks perpetuating the status quo.

We support the idea of a "Flexible Fund" in New Zealand that is structured in a similar way to Australia's Housing Australia Future Fund (HAFF); a long-term, sustainable investment vehicle rather than a simple grant program that relies on annual government budgets.

The HAFF is a $10 billion investment fund where the capital is preserved, and the investment returns are used to fund social and affordable housing projects. A similar fund in New Zealand could work in the following ways:

• Establishment as an Investment Fund: The New Zealand government could create a multi-billion dollar, ring-fenced investment fund. This capital would be managed professionally (for example, by the NZ Super Fund or a similar entity) to generate ongoing returns.
• A Perpetual Funding Stream: Instead of spending the fund's capital, only the annual investment returns would be used to fund housing initiatives. This would create a predictable, long-term source of funding that is insulated from short-term political cycles and annual budget negotiations.
• Clear Mandate and Targets: The fund would have a clear mandate with specific, measurable targets, such as delivering a set number of new public, affordable, or key worker homes over a defined period.
• Targeted Allocations: Like HAFF, the New Zealand fund's returns could be specifically allocated to address the needs of underserved groups, such as older adults seeking to downsize, low-income families, or to support the development of culturally specific housing like papakāinga.

By adopting a HAFF-like model, New Zealand's "Flexible Fund" would shift from ad-hoc, short-term spending to a sustainable, long-term investment strategy for addressing the nation's housing challenges.

Corresponding Recommendation:

• Structure the Flexible Fund as a long-term, ring-fenced investment vehicle, modelled on Australia's Housing Australia Future Fund (HAFF), to ensure a sustainable and perpetual source of funding.
• Appoint a professional investment manager to manage the fund's capital, preserving the principal and using only the investment returns for housing initiatives.
• Establish a clear and specific mandate for the fund, with measurable targets for the delivery of new public, affordable, and key-worker housing over defined periods.
• Create a perpetual funding stream by using only the annual investment returns to finance housing projects, insulating the fund from short-term political cycles and annual budget constraints.
• Allocate the fund's returns to target the specific needs of underserved groups, including older adults, low-income families, and the development of culturally specific housing like papakāinga.
• Partner with an expert delivery agency or agencies, to manage the assessment and disbursement of funds to on-the-ground projects led by councils, iwi, and community housing providers.

3. It is time to reconsider the role of existing mechanisms, such as the Accommodation Supplement alongside the Flexible Fund and Income Rent Related Subsidy

One of the greatest opportunities for systemic change lies in adjusting subsidy payments to be a financial instrument. These predictable, bond-like, recurring government subsidies should be used to underwrite and attract long-term patient capital. 

As an example, the Government could systematically redirect the portion of the Accommodation Supplement that currently flows to private landlords to underwrite the development of a national portfolio of affordable, long-term rental housing. This could be done without anyone who currently relies on the Accommodation Supplement going without.

By offering a, say, 35-year rental guarantee to a consortium of developers, Community Housing Providers (CHPs), and impact investors (such as KiwiSaver providers), the government can leverage this operational spending to create a multi-billion-dollar public asset over time, delivering both social and financial returns for New Zealand. Our research in this space has revealed a number of potential players who could deliver at scale.

We often tell young people that "renting is just paying off somebody else's mortgage," yet as a nation, we are doing exactly that on a massive scale. The direct transfer of public funds into private capital gain misses the opportunity for enduring public benefit.

Corresponding Recommendation: 

• Repurpose demand side subsidies to become intergenerational supply side investments. Ensure that mechanisms such as the Accommodation Supplement continue to support those who need it in the short to medium term, whilst mobilising institutional investment with greater public return being received over time.

4. Fostering Urban Regeneration, a Precinct Delivery approach, Transit-Oriented Development and true Public-Private Partnerships must be a key part of how the government supports urban development.

The GPS-HUD rightly prioritises housing growth, with a focus on maximising gains from transit-oriented development. This aligns with our view that urban development must be strategically focused on areas with existing or planned infrastructure capacity, particularly urban centres and brownfield sites. 

Adding residents to areas with existing infrastructure is significantly more economical than greenfield development, offering a lower-cost way to increase housing supply and expand the rating base. Areas where there is infrastructure capacity should be the primary focus of development efforts.

Unlocking this potential hinges on genuine Public-Private Partnerships. As our research into regeneration highlights, public-private sector collaboration is almost always essential to success. The government's role is not to lead all development, but to create the conditions for the private sector to invest with confidence. This involves a clear-eyed assessment of risk, reward, and control. 

Public sector investment should be concentrated on de-risking opportunities—through land assembly, infrastructure upgrades, and streamlined consenting—to attract private capital. This model leverages the strengths of both sectors: the public sector's ability to plan for long-term community outcomes and the private sector's efficiency in delivery.

As previously mentioned, public sector intervention need not be limited to policy and delivery tools and levers. The strength of the government’s credit rating could be used to underwrite and attract patient capital which is key to enabling the long-term approach required in regeneration.

Finally, the cyclical nature of the construction market presents a unique opportunity. During market downturns, when private sector activity slows (such as now), the Government can act as a counter-cyclical partner by commissioning the construction of affordable homes, providing concessions, capital grants or discounting land. This keeps the industry productive, retains skilled labour, and delivers desperately needed housing at a lower cost.

Corresponding Recommendation: 

• Prioritise brownfield and urban centre intensification over greenfield expansion. Develop a clear framework for Public-Private Partnerships that focuses public investment on de-risking projects in areas with existing infrastructure capacity. This approach will maximise the value of public funds, accelerate the delivery of housing in well-serviced locations, and harness the expertise and capital of the private sector to build the thriving, resilient communities envisioned in the GPS-HUD.

5. There is a critical role for data in measuring success

We commend the GPS-HUD's intention to use data and indicators to measure progress. However, success must be measured by more than just dwelling consents. Our NZ Housing Survey highlights a significant gap between what is being built and what people need. There is strong latent demand for alternative housing models like co-housing (59% support), rent-to-buy (34%), and residential cooperatives (32%). There is strong and broad support for higher density apartment living in the right areas.

These insights demonstrate that simply "more houses" is not the answer. The goal must be more of the right homes, of the right tenures, in the right places, supported by the right amenities.

Corresponding Recommendation: 

• The Government’s monitoring and evaluation framework must track nuanced outcomes beyond supply numbers. It should incorporate metrics on housing choice, tenure security, quality of life, and satisfaction with available options—data that can be captured through longitudinal studies like the NZ Housing Survey.

Conclusion

The GPS-HUD 2025 provides a solid foundation by correctly identifying the problems within New Zealand's housing system. The challenge, and the measure of this Government's success, will be its willingness to move from words to bold, decisive action.

A truly adaptive and responsive system requires more than just policy statements; it requires innovative funding mechanisms that create a national housing asset base, clear definitions and delivery models for affordability, and a commitment to genuine, long-term partnerships.

The Urban Advisory stands ready to work with the Government to help design and implement these solutions, ensuring that the vision of a thriving Aotearoa where everyone has a place to call home becomes a reality and welcomes further discussion about the impact our proprietary data could have on the government's ability to create fit for purpose policy.

Sincerely,

The Urban Advisory