The Labour Party would free up density and height controls to allow more medium density housing, in a policy it said would bring down the cost of building new homes.
Housing spokesperson Phil Twyford announced the policy at the party's annual conference in Palmerston North and acknowledged there were some risks.
"Some people do have a legitimate fear of poor quality developments but what we'll do is raise urban design standards so people are guaranteed good quality of design and plenty of open space around those developments."
He said the party would also reform the use of urban growth boundaries to avoid driving up section costs.
Mr Twyford said the Auckland Council was trying to loosen restrictions in some areas but was opposed by those with a "not in my back yard" attitude, and a Labour government would back the council's efforts.
"Our belief is that the supply of affordable housing is not only of national importance but is hugely important for future generations."
It would not be a matter of forcing local communities against their objections "because those decisions will still be made locally and still be made by the elected representatives through the council. But we're going to require the councils to take into account the over-riding need for more affordable housing."
Mr Twyford said new developments would be funded by local infrastructure bonds.
"Currently those costs are either subsidised by the ratepayer or passed by the developer onto the price tag of a new home.
"That makes houses much more expensive. It also means they are paid off through mortgages at expensive bank interest rates."
He said the bonds would be paid off over the lifetime of the asset through a targeted rate on the properties in the new development that would substantially reduce the cost of new housing.
Mr Twyford said local government bonds already existed for infrastructure but under the new rules they would be able to use them to fund new housing.