National have backtracked from a bipartisan agreement with Labour to address the housing shortage on their own terms.

Under a National-led government, councils will be able to opt out of the Medium Density Residential Standards and have the option to either increase density or develop farmland.

NZME business commentator Fran O'Sullivan says National have used this backtrack to 'sandbag' Labour at their recent party Congress.

She says that commentators agreed Labour hadn't come out with any new policies and National took the agenda forward.

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