New government guidelines on housing make it clear that councils must undergo a "culture change" to ensure they provide enough land for new homes, Housing Minister Nick Smith says.

However, Labour has accused the Government of "firing blanks" and says the new rules will not do enough to address Auckland's housing crisis.

The Government has released its new national policy statement (NPS) on urban development capacity, which Smith said would address a lack of available land for development.

CAMERON BURNELL/FAIRFAX NZ Nick Smith announces housing plans, which he says send a "very clear directive" to councils.

Under the NPS, councils would be required to supply more land than demand suggests, to ensure there was competition in the market - 20 per cent more in the short to medium term, and 15 per cent in the long term.

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They must also provide enough land for new housing to match projected growth, as well as monitoring and responding to data on housing affordability, resource consents, and the value of land on urban boundaries.

JOHN BISSET/FAIRFAX NZ Housing Minister Nick Smith has released the Government's national policy statement on urban development.

Smith said section prices and land use were "at the core" of Auckland's housing problems, with section prices increasing at five times the rate of inflation.

The NPS was a "very clear directive" to councils that they needed to free up more land to meet demand, and consider the national importance of housing rather than just the views of locals.

Councils who did not implement the NPS in their plans or follow its guidelines could be challenged in the Environment Court, or directed to change their rules by Smith in his role as Environment Minister.

LEGAL POWERS AVAILABLE

He denied it would override the Auckland Council's work on a unitary plan, saying it would "buttress" their work, but confirmed the Government would intervene if necessary.

The Government is not telling councils whether they should grow up or whether they should grow out - what we are very clearly saying to them, and what we have the legal powers to enforce them to do, is make sure that the total of that meets the development capacity that is required."

Smith confirmed a range of metrics, such as housing affordability measures and the value of land, would need to be considered by councils when making planning decisions.

"This policy is about a culture change to support development that connects planning decisions to economics, ensures plans are regularly updated and recognises the national importance of housing."

'DAMP SQUIB'

Labour housing spokesman Phil Twyford described the NPS as a "damp squib", saying it was unlikely to make a real difference in Auckland.

"The Government has been talking tough for the past few weeks: you'd think this was going to be the big gun, but its only Nick Smith firing blanks."

Twyford said the NPS had nothing to say about how infrastructure would be funded or the need to abolish Auckland's urban growth limits, instead setting up a "bureaucratic mechanism" which councils already followed.

"There's very little in here that signifies any kind of change - this is business as usual."

Green Party finance spokeswoman Julie Anne Genter said the NPS was "good in theory", but the Government needed to build affordable houses rather than rely on regulatory changes.

"Another planning tool isn't going to help families sleeping in cars or garages tonight."

NZ First leader Winston Peters described the NPS as "a derriere-covering exercise" which would not change the situation in Auckland, as councils already planned for growth.

"Well that's what councils are doing now, that's the logic of all forward planning ... did Mr Smith not know that?"

Consultation on the NPS will take place until mid-July, with the Government hoping it will become operational in October this year.