Where you'll live, what sort of house you'll have and how much it'll cost will be influenced by reforms that promise more affordable housing. But will it mean wall-to-wall suburbia from Orewa to Pukekohe?

Hugh Green is sitting pretty. One of Auckland's most savvy property speculators, Green made his fortune buying up land on the city outskirts and waiting until the time was ripe to develop. As the city sprawled out, he cashed in.

Green's current landbank includes properties on the outskirts of Massey, Papakura, Albany, Helensville, and Weiti - many are outside the metropolitan limits which ringfence urban Auckland.

"I didn't really buy them for future housing," he says. "Irrespective of what happened I thought that they were value at the time."

It hasn't all been easy money. Planning obstacles got tougher with the Resource Management Act and subsequent red tape. In the late 1990s, Auckland councils agreed to curb urban sprawl with the Regional Growth Strategy - an attempt to contain new housing supply largely within metropolitan urban limits.

A suite of reforms planned by the Government will make it easier for Green and others sitting on rural land encircling Auckland to convert them into houses - gobbling up more countryside.

The reform package will apply nationally but is aimed at smashing through the roadblocks which thwart development of our most populous city.

It's arcane sounding stuff - reforms to the Resource Management Act, spatial plans, relaxing the metropolitan limits ... But the new planning framework will affect where people will live, how we'll get around and the type of housing we live in: Separate house and garden or higher density apartments? Motorways or public transport? Good or bad urban design?

If the Government gets it right, it will be easier to get projects off the ground, from houses to new motorways and public transport.

But casualties along the way could include environmental damage, higher infrastructure costs, even worse traffic congestion, community input and social problems if low cost housing is concentrated on the outskirts.

Environment Minister Nick Smith has appointed two advisory panels to recommend changes to the Resource Management Act. Coupled with a further reform bill on Auckland's governance, the changes will shape the planning rulebook which the single Auckland council will work from.

Announcing the panels - one will look at urban design, the other infrastructure - Smith linked restrictive zoning and consent laws to New Zealand's poor productivity and economic growth.

High on the hit list is the use of metropolitan urban limits to contain growth. The Government blames these lines on a map - residential land on one side, rural on the other - for pushing up house prices inside the boundaries. It believes making more land available will drive down the cost of land and make houses more affordable.

That's a major change to the policy of urban containment agreed to by Auckland councils in 1999. The Regional Growth Strategy was supposed to guide the city's development for 50 years. It attempts to limit sprawl by housing 70 per cent of population growth within the urban limits. The aim was to limit the environmental costs of sprawl and preserve open space while building a more efficient city which supported public transport.

But the strategy demanded more intensive housing - apartments and units - than New Zealanders accustomed to a house-and-garden lifestyle are used to. And successive Governments have been slow to fund the much-needed public transport investments.

Housing minister Phil Heatley: "Our drive comes from the fact that property prices have increased hugely in the last five years and locked out first home buyers. And the biggest proportion has been the land cost, not the cost of building."

It looms as a victory for free market advocates over social engineering; of simple supply and demand economics over less tangible environmental and social costs.

Sprawl supports the house and garden lifestyle New Zealanders prefer argue lobbyists such as Nick Pavlotich, who publishes the Demographia survey on housing affordability, and resource management consultant Owen McShane. But there are plenty who argue that a more compact city, or smart growth, is both environmentally and economically more efficient.

The reforms will require councils to produce a Spatial Plan (in Auckland's case, replacing the Regional Growth Strategy) as the blueprint for the timing and location of development including housing, industry, commerce and infrastructure such as roading.

Terms of reference for the urban advisory panel include housing affordability, urban design, the urban limits, infrastructure funding, and spatial and structure plans. The infrastructure panel will look at streamlining the process of designating land for public works such as roading - or alternatives to designations.

Smith says development levies - where councils charge developers for the cost of extending services such as roading and water supplies - are another focus. "Set them too high and it affects affordability. Set too low you provide an artificial subsidy from existing ratepayers."

Environmental Defence Society chairman Gary Taylor says the behind the scenes work represents both an opportunity and a threat. "It's an opportunity to collapse this cumbersome hierarchy of planning instruments that we have in Auckland into a more coherent, simple, user-friendly, effective set of instruments.

"We could go from cumbersome complexity to simple effectiveness. At the moment we have a national policy statement, regional policy statement, regional plan, regional coastal plan and district plans - it's enormously complicated.

"The threat is that whatever is done creates a regime in which urban sprawl is let loose. That would be a disaster for the environment and would add cost to our urban growth. The urban area would lose form, shape and attractiveness - that would be a third world outcome for Auckland."

What's got Taylor worried is the composition of the technical panels announced by Smith. Appointees include prominent critics of the metropolitan limits tool such as economist Arthur Grimes, planning lawyer Alan Dormer and Property Council chief executive Connal Townsend. The infrastructure panel is stacked with roading and engineering expertise but lacks a public transport voice.

Taylor says the panels lack an environmental perspective. "I'm not criticising the individuals, just saying that in terms of representation it's clearly skewed towards the property development side.

"Why is the Property Council, which represents developers, there while there's no one there representing environmental interests?"

Not everyone believes the panels are stacked. In a posting on the Not PC blog, Owen McShane encouraged free marketeers to "give assistance to Alan Dormer, Arthur Grimes, Connal Townsend and Stephen Selwood in any way we can, including by making submissions to the Select Committee in support.

"The [advisory] groups are stacked to give Gary Taylor's Environmental Defence Society what they want." McShane is critical of the appointment of Adrienne Young Cooper to both panels, describing her as a strong supporter of the compact city approach.

Smith is unrepentant about the panels' make-up. He says National revealed in Opposition its concerns that urban limits were adding to house price inflation; that infrastructure planning was lagging and that urban design rules were not ensuring quality.

"I make no apologies for wanting to put a greater degree of scrutiny on it.

"If you take something like trying to strengthen the RMA around urban design, the big push for that has come from the environmental lobby in Auckland rather than the developer lobby."

Not surprisingly, Hugh Green says easing the urban limits will make life easier for developers. But he's more excited by the Government's pledge to streamline the RMA to reduce consenting delays and costs.

"At the subdivision we're doing in Papakura at the moment we've had to put in two stormwater filtering ponds which have cost $60,000 each. They've never had any water in them. They're catering for a one in 100 year flood - I just think it's ridiculous.

"Things like that push the cost up and nobody seems to be worried about it.

"Fair enough to protect streams and waterways from pollution but you've got to draw the line somewhere."

ARC planning chairman Paul Walbran says he's all for making red tape easier. "There are numerous examples where getting consent is much harder than it needs to be. But that shouldn't be a Trojan horse for getting more rabbit hutch apartments and that sort of thing.

"A coherent spatial plan is certainly a must if we're going to get the kind of Auckland we need."

But he says the proposition that pushing out the urban limits will lead to cheaper housing is a fallacy. "The overall cost of living will substantially rise. The further out the city sprawls the more extensive its infrastructure has to be and the less efficient it is. The cost of transport rises substantially - that's well documented everywhere.

"Metropolitan limits are a nice simple tool that keep growth in a city coordinated - keeping an adequate supply of land saves ad hoc development that's disconnected and takes people a lot longer to get to and from. It's all about wanting an efficient liveable city that works. One that doesn't stuff up its environment."

But Smith and Heatley clearly don't buy the arguments which underpin the regional growth strategy and the compact city approach.

"There's a bit of naivety in policy thinking around metropolitan urban limits in assuming you can drive urban intensification against community wishes," says Smith.

Communities in Auckland and Nelson have reacted negatively to intensive housing applications, he says. Planners have made flawed assumptions about the extent of intensification, grossly over-estimating the number of new housing units that could be provided.

"All that happens is that you drive up section prices with quite major flow-on economic impacts for both housing affordability and the property bubble which has been quite damaging to the economy over the last decade.

"It's true we need some intensification but you need to be realistic in a democratic society about the degree of central planning edicts that you can get away with."

* * *
URBAN ADVISORY PANEL MEMBERS
Alan Dormer

(Chair) Barrister specialising in resource management and planning law and a planning hearing commissioner. Chaired an advisory panel on phase 1 of Resource Management Act reforms.

Adrienne Young Cooper

Consultant specialising in resource management and environmental issues. Previous management role at Rodney District Council. Has carried out projects for central Government, regional and local councils and private clients.

Arthur Grimes

Chairman of Reserve Bank board, research economist and consultant. Research centres around infrastructure and housing economics and macroeconomics. Member of National Infrastructure Advisory Board.

Graeme McIndoe

Architect and urban designer. Experience in plan change and resource consent processes for private and public sector clients.

Connal Townsend

Property Council chief executive. Has worked with central, local and other government associated bodies on development and resource management issues.

Ernst Zollner

Group manager, strategy and performance with NZ Transport Agency. An urban planner with experience in design, infrastructure planning and economic development.

INFRASTRUCTURE ADVISORY PANEL
Mike Foster

(Chair) Planning consultant. Former director of planning at Beca Carter Hollings & Ferner Ltd, consulting engineers and planners. Past president of the New Zealand Planning Institute. Also worked on phase one RMA reform panel.

Kelvin Reid

Christchurch-based solicitor specialising in commercial, resource management and employment matters. Involved in resource management disputes over water allocation and water quality issues in Canterbury.

Lindsay Crossen

Civil engineer with road contractors Fulton Hogan and former chair of Roading NZ. Involved in northern motorway extension to Puhoi. Member of National Infrastructure Advisory Board.

Sacha McMeeking

General manager, strategy and influence with Ngai Tahu. Has lectured in law at Canterbury University and career has included socialwork, kaupapa Maori programme design and strategic and political advice.

Stephen Selwood

Chief executive of New Zealand Council for Infrastructure Development. Experience of strategic and public policy issues across transport, energy, water, telecommunications and social infrastructure development.

* * *
SPATIAL PLANS
* Used in London and catching on internationally
* Set out a long-term (20 to 30 year) vision for a region and its communities
* Set a strategy for how land use, infrastructure and environmental goals can be achieved
* Guide location of activities and critical infrastructure
* Identify areas to be protected
* Align implementation, regulatory and funding plans
- source: Ministry for the Environment boundaries
* * *
BELT UP OR LET IT SPRAWL: HOUSE PRICE ECONOMICS 101
Arthur Grimes
senior fellow with economics consultancy Motu, as well as chairing the Reserve Bank board

His appointment to the urban advisory panel, along with other opponents of urban limits, has drawn criticism that the Government has a pre-determined view on the changes it wants.

Grimes' study into the influence of land supply on house prices, released in 2007, is often cited by critics of Auckland's compact city strategy, including the Government. The study concluded the urban fence had a strong inflationary effect, with land inside the boundary fetching nearly 10 times the price of rural land just outside the boundary. It recommended scrapping or pushing out urban limits.

"It is inescapable that land availability is a major constraint to residential development in Auckland."

What the study didn't dwell on was why so much new housing was going in near the city limits, rather than the Regional Growth Strategy's vision of urban renewal and intensive housing around established town centres and handy to rail and bus routes.

The counter-argument is to improve land supply by tackling the disincentives to inner-city redevelopment: securing suitable sites, addressing community opposition and tortuous council planning requirements.

Professor Tim Hazledine
head of economics at Auckland University

Hazeldine opposed Grimes in an Environment Court case over plans to allow more subdivision in the foothills of the Waitakere Ranges at Swanson.

Grimes gave evidence that as the land would fetch the highest price if housing was allowed, this was therefore the most efficient use of the land. Hazledine countered that the most efficient use was not necessarily dictated by the price it would fetch if subdivided - landscape and amenity values should be considered as well. He drew a comparison with what Albert Park would fetch if it were subdivided.

Hazledine says the urban limits have been a successful mechanism in Auckland since the 1950s. While limiting the supply of land can push up house prices, the price may also reflect the increased amenity value of a compact city, he says. There's growing international recognition that a compact city brings "agglomeration" benefits which help the national economy.

"They are coming up with some really big findings on the value of connectedness and density in urban areas - straight-out economic value in terms of productivity. You are defusing that by spreading it all over the shop."

Hazledine says the negative costs of sprawl can be quantified - but evidence specific to Auckland appears to be lacking.

"I hope the Government is sincere about easing the path for development in appropriate areas within the city. There's room for compromise rather than just wiping out the metropolitan urban limits."

Gary Taylor
Environmental Defence Society

It's too simplistic to use economic analysis to show an increase in land supply will reduce land prices, says Taylor. A more thorough evaluation would factor in the costs of landscape and ecological damage, loss of rural amenity, the costs of transport links, schools and other facilities and social issues.

Arguments against sprawl include the cost of extending infrastructure such as roading, stormwater, sewage and water supplies; environmental concerns including sedimentation and stormwater pollution of waterways; loss of valued landscapes and ecological areas; and social issues arising from concentrating low cost housing in outer suburbia. "It's not just about land prices - if you count the disbenefits of urban sprawl you get a different answer."

* * *
GETTING THE RIGHT MIX: THE VISION FOR AUCKLAND
Will it mean urban Auckland sprawls from Orewa to Pukekohe, from Kumeu to Clevedon?

It won't be as crude as simply rubbing out the boundary lines to allow a fire sale of rural land, Government ministers promise.

"We see the metropolitan urban limits as sensibly constraining development in some parts of Auckland but in other areas it's nonsense and we want to have a look at that," says Housing Minister Phil Heatley.

Environment Minister Nick Smith is similarly equivocal. "We're not necessarily opposed to metropolitan urban limits but if we're going to have them we need to be realistic ... Our cities need to be able to accommodate a growing population."

The Regional Growth Strategy calls for about 70 per cent of population growth to be accommodated within the city limits and 30 per cent beyond - in satellite towns, lifestyle blocks and on greenfield sites.

But Smith won't be drawn on how the mix might look in future, the extent to which boundaries will be loosened - and where.

"I can't say how things will shift - it's too early in the process to identify that. These issues are hugely complex. At central Government level it's about getting the framework and the incentives right. We want these technical groups to kick the tyres on some of the assumptions which have been previously made and to take on board the sort of analysis that's been done by Motu Research and provide a path forward.

"Nor does the Government intend to dictate what that balance will be. We would rather provide a new framework in which Auckland's council can make those decisions."

Heatley says the move to spatial planning will help the new council to better guide Auckland's development.

"This is not about slash and burn. We want to sensibly zone areas for residential land supply."We need to identify which areas are suitable for development and which are not. And it's very important the local community has a say."

Does this spell doom for the compact city - where people live in apartments or terraced housing within easy reach of public transport or can walk to work?

The Government says no. A combination of unified planning rules, streamlined RMA processes and urban design guidelines should make it easier for developers to progress intensive housing proposals which are more warmly received by locals, says Smith.

He tips a move away from the adversarial approach to resource consent applications, of "a more collaborative approach between developers and councils with better urban design guidelines" leading to a streamlined consenting process. Communities will still get a say, he says.

Heatley says the Government hasn't picked camps in the let-it-sprawl vs compact city debate. "We think we should approach it from two directions."

The advisory panels' focus on easing the consent process will make it easier to build on land already zoned for housing and to increase density.

Spatial planning will ensure councils zone enough land for future building work. "There really needs to be 10 years' forward supply."

Heatley rejects ARC research that predicts Auckland has 15 years' supply left before it needs to find additional space for housing. "We have never accepted the ARC's sums in the way they calculate how much land is available. They often include large sections when the owners have no intention of subdividing."

"Councils need to provide more residential [housing] and to plan for it, rather than [having] a mindset of 'how do we restrict it?"'

Smith is critical of planners and policymakers who believe New Zealanders can be persuaded to change their preference for a separate house and garden lifestyle.

"There's a bit of naivety among some of the planning community that they can somehow impose on our suburbs their view of the world and if only they had greater legal power they could deal with the opposition of those communities."