The Government wants land freed up for development in its bid to make housing more affordable, but says it will need a commitment from local councils to make this happen.
Increasing the supply of land is a priority in the Government's response on Monday to a Productivity Commission report on housing affordability.
Finance Minister Bill English says work is needed in a number of areas, including increasing land supply in new and existing urban areas.
Reducing delays and costs under the Resource Management Act will also be a priority, including a new six-month time limit on council processing of medium-sized consents.
Mr English says councils are increasingly focused on affordable housing, but if they ignore the Government's objectives, it will look to exert more control over their planning processes.
"They should be clear today that the Government is determined to see housing affordability improve. That hasn't been a focus of their plans in the past - we want to see it as a focus of their plans in the future."
Mr English says there is no quick-fix to high housing costs, but the Government's plan will restrain prices in the medium term and make housing more affordable.
"Can I stress that none of the measures we will be investigating can fix the problem overnight. But over time, we're confident that the housing market can be expanded to embrace, not exclude, more people who aspire to home ownership."
The Government also aims to improve the provision of infrastructure for new housing and improve productivity in the construction sector.
However, Labour's housing spokesperson Annette King says making more land available will not ensure that houses cost less.
Auckland mayor pleased at approach
Auckland mayor Len Brown says he is satisfied with the Government announcement signalling it will make housing in the city denser to bring down the costs of living.
In its response to the Productivity Commission's report on housing affordability, the Government says more land will be made available through brownfields developments within cities - not just greenfields projects on the outskirts.
The Government says it will look at centralising building consent processing and possibly allowing companies to compete with councils to do it.
Mr Brown told Radio New Zealand's Checkpoint programme on Monday he is happy with the announcement.
"I take my hat off to Bill English as Deputy Prime Minister, in particular. He's been fairly intense in working across the whole sector, working with all councils and really finding a way forward that includes the councils and making sure that we have a collaborative position.
"I'm really pleased with the way in which the Government's come at this."
The Property Council says terraced housing rather than high-rise apartments may be part of the answer to making housing more affordable.
Chief executive Connal Townsend says developers can build terraced houses or standalone units for about the same price - so there are options to avoid high-rises.
Habitat for Humanity, an international organisation that develops realistically priced homes, says opening land on city fringes for building more houses is one answer to making them more affordable.