Panel told to locate more land

TASK: To delve deeper into how council makes decisions about land availability.

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth.

The government is interested in the scope for improving local and regional authorities' land-use regulations, planning and development systems, and wants the commission to work out how best to deliver adequate supply of land, Finance Minister Bill English wrote in a letter to commission chairman Murray Sherwin.

The commission will examine and compare rules and processes for local government around freeing up land for housing, and providing necessary infrastructure, and will draw on international experience.

"Capacity for more housing is not the single answer for housing affordability, but it is an essential component of a policy response, especially where demand for housing is outstripping supply," Sherwin said.

In its 2012 report, the commission made a slew of recommendations for improving housing affordability, and was especially critical of Auckland City Council's proposed compact city approach, which it said undermined that goal.

Rapid gains in house prices in recent years have put pressure on regulators to take the heat out of the property market after the collapse of NZ's mezzanine finance sector cut funding for developers, meaning the nation's housing stock was static for several years.