The Government is to place a six-month time limit on councils processing consents for medium-size projects including housing developments as part of its push to make homes affordable.

It is also looking to councils to free up more land for building and has announced an inquiry into the building industry to identify barriers to improving housing affordability.

The measures announced this afternoon by Finance Minister Bill English are the Government's response to the Productivity Commission's inquiry into housing affordability.

High house prices had helped fuel household debt and contributed to damaging imbalances in the economy, Mr English said.


"In particular, high housing debt diverts money from more productive investments, contributes to New Zealand's significant overall level of indebtedness and exposes taxpayers to growing demands for State assistance with housing costs.

"Those factors make it vital that housing becomes more affordable. In addition, projections suggest that many more homes will be required in coming years than are being built."

However, Mr English warned there would be no quick fixes and work was needed in a number of complex areas and across multiple government, local government and private sector agencies.

As well signalled the package emphasises the need to increase the supply of land both inside cities and on their fringes which is available for building new homes.

"Many of the changes that will make a difference lie with councils and the Government expects them to share the commitment to improving housing affordability," Mr English said.

Commenting on the RMA changes, Environment Minister Amy Adams said the six month time limit for processing medium size projects would avoid "unnecessary costs and long, drawn-out processes for all parties".

Mr English said the Government had asked officials to do more work on other Producitivity Commission proposals including whether building consent authorities could be consolidated in a regional or national hub and the possible establishment of "a competitor agency for resource consents/plan changes".

In addition, the Ministry for Business, Innovation and Employment would undertake "a market-level inquiry into the construction sector to identify barriers to improving housing affordability".


More work would also be commissioned on the specific problems of the Auckland and Christchurch housing markets, Mr English said.

Labour housing spokeswoman Annette King said the announcement was a "weak response to a comprehensive report".

She said weakening the RMA and lowering industry standards would do nothing to get Kiwis into homes.

"The Government's suggested partnership approach sounds ominous for councils. They seem to be expected to 'share the commitment' of addressing housing affordability at the very same time that Government is placing constraints on their core services."

Green Party housing spokeswoman Holly Walker said building more suburbs in rural areas far from city centres would not make housing more affordable or New Zealand's cities more liveable.

"Sprawl costs ratepayers more, leads to less liveable cities, and doesn't result in cheaper houses."


Home Affordability: The Government's Four Key Aims:

* Increasing land supply - this will include more greenfields and brownfields developments and allow further densification of cities, where appropriate.

* Reducing delays and costs of RMA processes associated with housing - this includes introducing a six-month time limit on council processing of medium-sized consents.

* Improving the timely provision of infrastructure to support new housing - this will include considering new ways to co-ordinate and manage infrastructure for subdivisions.

* Improving productivity in the construction sector