Government agencies may be heading for another clash with the new Super City - this time over Auckland's plans to tighten limits on urban sprawl.

An inquiry into housing affordability by the Productivity Commission is looking into whether local policies aimed at encouraging more intensive housing are consistent with popular preferences for suburban sections with grass and gardens.

A separate urban technical advisory group appointed by Environment Minister Nick Smith says Auckland's metropolitan urban limit has been too restrictive and recommends a "Government policy statement" for Auckland which the new Auckland Plan would have to comply with.

Both measures fly in the face of the new draft Auckland Plan, which would change the present metropolitan urban limit into an even tighter "rural urban boundary".


The draft says the boundary will define the limits to growth for the next 30 years. Urban development would be banned outside the rural-urban line.

The current limit would be extended to bring in an extra 5000 to 6000ha of land around Silverdale, Westgate and south of Papakura, but 75 per cent of new housing over the next 30 years would be within the existing built-up area. Two-thirds would be flats and other attached dwellings.

Detached houses with gardens would drop from 76 per cent of homes to 57-61 per cent by 2040.

A more "compact" city preserving green spaces around the edges is a central component of Mayor Len Brown's vision for the city, backed by expanded public transport including a proposed underground inner-city rail loop.

But Transport Minister Steven Joyce has already refused to fund the rail loop. He also criticised "a cast-iron" limit in a newspaper article last year in which he called for planning "an Auckland that reflects the varied ways in which the people of our biggest city already choose to live".

Auckland Council's own submission to the Productivity Commission inquiry accepts that "at present, medium density/intensified dwellings are not favoured by families and older people".

A commission issues paper noted research showing the city's limit drove up land prices within and just beyond the limits and had become "an increasingly binding constraint on land supply".

A Reserve Bank submission to the commission argues that the country "needs to ensure that land use can change relatively readily towards the most valuable use of that land".


Dr Smith's advisory group found that urban limits were "a blunt instrument" and could be replaced by "progressive rezoning of new urban land".

But other state agencies, including Housing NZ and Mr Joyce's own Transport Agency, support a "compact city". Housing NZ's submission says suburban sprawl is inefficient and has curbed Auckland's productivity.

The commission will issue a final report in March.

* Maintain a green city fringe to "make Auckland appealing".
* Promote healthy and sustainable walking, cycling and public transport instead of cars.
* Minimise infrastructure costs.

* Restricting land drives up prices, making housing unaffordable.
* Most people still want houses with gardens, not flats.
* Market would allocate land to its most valuable use.