The Government has signed off its national policy statement that ensures councils in rapidly growing urban areas provide enough land for new housing and business developments.
It takes effect on December 1 and big councils experiencing high growth will be most affected - Auckland, Christchurch, Tauranga and Hamilton.
Smaller fast-growing cities such as Nelson and Queenstown will also be affected.
Building and Housing Minister Nick Smith says the national policy statement requires councils to allow for a greater supply of houses, so prices rise more slowly and houses are more affordable.
"The long-term, root cause of New Zealand's housing affordability problems is insufficient land supply, especially in Auckland where median section prices increased 350 percent from 1990 to now," he said on Monday.
"Building costs increased only 78 percent during the same time."
Dr Smith says the national policy statement requires councils to base their decisions on better information, including house prices in their area.
"It is also a powerful lever for those seeking additional residential zoning from councils in that they can appeal council decisions to the Environment Court on the basis the council is not meeting supply requirements," he said.
It has taken the Government nine months to develop the policy statement, compared with the usual three years.
"It sits alongside the new Unitary Plan and the Government's Resource Management Act reforms to address the core issue of increasing land supply," Dr Smith said.