A new super agency will combine the powers of existing authorities and fast track large-scale housing developments.
Housing and Urban Development Minister Phil Twyford announced today that the new agency will combine Housing New Zealand, its subsidiary HLC, and the KiwiBuild Unit.
Mr Twyford said the new Housing and Urban Development Authority would still work within the parameters or the Resource Management Act, have obligations to consult with local government, and give the public three opportunities to have a say.
An Environment Court judge will review public submissions and final decisions on major development projects will be made by Cabinet.
"We're not stripping power away from councils, but we are putting central government in there alongside councils to undertake these large projects," Mr Twyford said.
"All of the powers we're going to give these new agencies they already exist.
"What we are doing is putting all those powers together."
Mr Twyford said his government had inherited a housing crisis and the new agency would have cut through powers to build quality state and affordable homes.
Auckland councillor Chris Darby chairs the council's planning committee and said local government needed to get on board with the change.
"We really need to look at a totally different structure to match the urgency that is required for delivering housing not just for Aucklanders but for New Zealanders throughout the country," Mr Darby said.
"There are areas of the planning system within Auckland Council that no doubt we have to address and... we are giving an incredible priority to that.
"There are no excuses here, all of us in central government and in local government need to rejig to respond to this challenge of providing housing to New Zealanders."
New Zealand Institute of Architects president Tim Melville said it was critical that local and central government work together
"We'd like to think that it will make a really significant difference," Mr Melville said.
"It comes down to the detail and how they design the process that they are going to use and particularly how they interact with the local authorities.
"It has got to be critical that everybody's working together and if that happens... we could get faster consent times."
Creating communities with a mix of public and private housing and amenities was good urban design, he said.
"It's about designing communities, not building homes or commercial buildings, and that's got to be at the centre of it," Mr Melville said.
"We would like to think that the urban development authority would have access to social scientists, who are talking about wellbeing and talking about people.
"Naturally developing communities are a mix of homes and retail and sports facilities and libraries - we would like to think that's what these new communities are going to be like."
The union representing public servants is cautiously welcoming the new agency.
Public Service Association national secretary Glenn Barclay said the move seemed logical, but he was waiting on assurances no jobs would be lost.
Mr Twyford said legislation to establish the Housing and Urban Development Authority would be introduced to parliament in 2019.
The first projects are expected to be up and running in early 2020.