There’s been a spike in applications for townhouse and apartment developments since the city’s pro-density District Plan was approved.

Windbag is The Spinoff’s Wellington issues column, written by Wellington editor Joel MacManus. It’s made possible thanks to the support of The Spinoff Members.

At 28 Rhodes Street in Newtown, a single-storey, four-bedroom home sits on a 431m² section. It has a front yard and a backyard with two sheds. The house is in terrible condition. The ceiling is bulging and panels are peeling off the walls. Black mould is growing in one bedroom, and the kitchen is decades old and looks barely sanitary.

When it was first built in 1910, it would have been a fairly affordable home for one of Newtown’s working-class families. Today, a new four-bedroom house in central Newtown would fetch at least $1.3 million. Even in its decrepit shape, 28 Rhodes Street sold for $785,000 in September 2024.

The new owner’s plans for the property were revealed in a resource consent filed with Wellington City Council. The designs by Novak+Middleton architects show the old house will be demolished and replaced with 21 new dwellings in two four-storey buildings and a communal courtyard.

This development would have been illegal just one year ago. Wellington’s new District Plan, which came into effect in May 2024, changed the city’s housing rules to allow for much greater housing density.

Under the old District Plan, Rhodes Street was a character precinct, meaning homes built before 1930 (such as the one at 28 Rhodes Street) couldn’t be demolished without an extensive consenting process, and new developments couldn’t be more than two storeys tall. Under the new District Plan, Rhodes Street is a high-density zone allowing buildings up to six storeys tall, making developments like this possible.

A notable aspect of the design is the lack of setbacks. Previously, houses in Wellington were required to leave a front-yard gap between the building and the property boundary. That rule was removed in an amendment from councillor Rebecca Matthews. This means new developments can be built right up to the front and back edges of the section, allowing for more efficient use of space and a larger central courtyard.

Since November, there has been a sharp spike in resource consent applications for new dwellings in the Wellington City Council area. After averaging 26 new dwellings consented per month, WCC approved 87 new dwellings in November. It’s a major outlier compared to the relatively slow rate of development happening elsewhere in New Zealand amid poor economic conditions and high interest rates.

At 152 The Parade in Island Bay, a developer is replacing two existing buildings with 12 two-storey townhouses. At 16-20 Riddiford Street in Newtown, four low-density homes and commercial buildings are set to be replaced with seven new retail locations and 22 townhouses.

At 2-6 Bay Road in Kilbirnie, developers have submitted plans to transform a tyre shop into a six-storey apartment block with 36 new homes, three shopfronts and a rooftop garden. There are smaller-scale examples too. At 46 Mandalay Street in Khandallah, a single unit is being demolished and replaced with four townhouse units.

The question is: if the District Plan changed in May, why did the numbers only start to shift in November? Motu economist Stuart Donovan has been analysing the figures and identified two key factors.

The first is a timing effect. In the lead-up to the District Plan being adopted, some developers likely held off on lodging applications. “If they wanted to develop their site and they knew the new District Plan was likely to be more enabling of housing, they might have waited so they could build more homes and make more money,” Donovan said.

But Donovan doesn’t think timing alone explains the size of the jump. There is also a direct enabling effect from the new District Plan. “The District Plan has enabled bigger developments, either where an existing development has scaled up, or new developments have become financially viable.”

While these 87 new dwellings are only a drop in the context of Wellington’s overwhelming housing shortage, it’s a good start. When economic conditions eventually turn around, it could trigger an even greater development boom. “It’s just one month of data,” Donovan said. “But the early signs are good, so let’s keep watching.”