Rotorua properties will soon be able to be built up to three stories high without resource consent.
Rotorua Lakes Council is the latest to join others in the country to join the Tier 1 major urban centres covered by the medium density residential standards (MDRS).
It joins Tauranga City and Western Bay of Plenty District Councils, along with about 12 others around the country.
The move aims to significantly increase the housing supply in Rotorua Lakes District.
Housing Minister Dr Megan Woods and Environment Minister David Parker announced the move yesterday following a request from Rotorua Lakes Council and its partners Te Arawa Lakes Trust and Te Tatau o Te Arawa.
"The [standards] mean up to three homes of up to three storeys each will be able to be built on most residential sites without requiring a resource consent," Parker said.
Rotorua Lakes Council will now need to update its District Plans to align with the medium density residential standards and National Policy Statement on Urban Development.
"The housing situation in Rotorua needs urgent attention, so we are delighted to see Rotorua Lakes Council proactively addressing its planning rules," Woods said.
Rotorua MP Todd McClay said if it meant more houses, it was a good thing.
But he said that if it allowed three-storey houses to be built anywhere, existing homeowners should have a say if it were to cause issues.
He also said council consents took too long to be issued and this would not fix that.
In a statement, Rotorua councillor Tania Tapsell who is the council's elected member lead on the housing portfolio said housing intensification will unlock affordable options for people.
"The Act allows us to optimise land that is available to build much-needed options like 1-2 bedroom units. Supporting this is the best thing we can do to remove costly barriers and the time it takes to build as we'll be able to streamline consenting processes."
An overhaul of the old rules and processes was well overdue, she said.
Rotorua mayor Steve Chadwick said it was a welcome step.
"The decision to seek Rotorua's inclusion in this legislation was unanimously supported by our elected members who all recognise the acute housing needs in our district."
Some of the new rules which implement the standards will be in place from August 2022, while others that require more consideration under the National Policy Statement on Urban Development will come into effect in late 2023.
The Government has a partnership in Rotorua with the council, iwi and service providers to jointly coordinate work to alleviate the city's housing shortage.
Chadwick said Rotorua's Housing and Business Assessment confirmed the district's housing deficit was severe – a shortage of 1890 homes in the short term (including unmet demand of 1500), a shortage of 1400 in the medium term (including the unmet demand) and 3630 in the long term.
"We need to act now to respond to that demand – and we are – but we've always said we can't do it alone. We need a collaborative approach and all available tools and options at our disposal to achieve the housing outcomes our community needs and the Bill will enable us to move at pace on intensification."
Evolve Rotorua spokesman Ryan Gray was "stoked" to hear the news.
"Rotorua is in desperate need of more quality housing, as exemplified by the troubling situation on Fenton St, this announcement means those with larger landholdings can more easily develop their properties to ease pressure on the housing market."
"We've heard stories of businesses struggling to attract talent to Rotorua due to applicants being unable to secure quality housing - this announcement is a welcome signal Rotorua is serious about being a city ready for the future"