National is withdrawing its support from the bipartisan agreement with Labour on housing density as it proposes its own policy to address the housing shortage.

Under a National-led government, councils would be able to opt out of the Medium Density Residential Standards that allowed three-storey dwellings to be built on all residential land in the main cities.

It would give councils discretion to either increase density or develop farmland – called greenfield sites – but they would be required to zone land for 30 years’ worth of housing demand in the “short term” and, if they didn’t, central government would do it for them, according to National housing spokesman Chris Bishop.

A $1 billion fund for “Build-for-Growth incentive payments” would be provided to councils to deliver more new housing and would be funded by stopping existing programmes such as KiwiBuild.

The party also supported building at least six-storey properties near public transport hubs, as a way to boost the housing stocks in city centres.

National's policy would increase sprawl further away from main centres. Photo / Nick Reed

The intention of the policy was to make up the shortfall of more than 100,000 homes and make housing more accessible to young people. However, questions remain as to how much sprawl it would cause further away from main centres and the costs of developing the necessary infrastructure to support new housing.

Green Party urban development spokesperson Julie Anne Genter said the policy was “confused and rushed”, and believed it would worsen the inequality being driven by unaffordable housing.

“[The policy] is simply a continuation of the exact same failed approach of the 1990s that caused the very problems we have today. National are not fit to govern.”

By adopting the policy, National is backtracking on its agreement with Labour in late 2021, even after Bishop said the party was still committed to it as recently as six weeks ago.

National leader Christopher Luxon revealed the move at a recent public meeting in Auckland. He said the party had got it wrong on housing density rules, despite his earlier support for those rules.

Appearing on TVNZ’s Q+A this morning, Bishop said the party’s housing policy had been debated in recent months but wasn’t finalised until a few days ago, after Luxon made his comments in Auckland.

“We’ve always said we were open to sensible changes and actually what we’ve come up with, I think, is a far more ambitious package,” he said.

“You can either do greenfields or you can do density or you can do, in reality, a mixture of both and around those rapid transit corridors, you can do six storeys or above.”

National Party housing spokesman Chris Bishop believes the policy will fix the housing shortage. Photo / Angus Dreaver

Bishop denied the move was a “flip-flop”, citing the requirement that would be placed on councils to make swift decisions.

“They have to put 30 years of growth into the market right now to create abundant development opportunities to drive down the cost of land, both at our city fringes but also inside our cities to make housing more affordable.

“If they don’t, central government, a National government, will rezone that land for them.”

He acknowledged housing had “got out of control” under the previous National government but quickly pointed to Labour’s housing failures, including increased waiting lists for social housing.

“Labour came to power in 2017 saying they had all the answers; they have utterly failed.”

Prime Minister Chris Hipkins and other party members are likely to respond later today during the final day of their party congress in Wellington.

Act was the only party in 2021 to oppose the details of the bipartisan agreement between National and Labour.

Deputy leader and housing spokeswoman Brooke van Velden today welcomed National’s “reversal” and said it showed why Act should be in government.

“National got caught up in Labour’s style of political theatre over substance, and sanity returned only after encouragement from Act.

“This is why New Zealand needs Act as National’s conscience in the next Government.”