Question 1 The Resource Management (Enabling Housing Supply and Other Matters) Bill was hammered out between Labour and National parties in late 2021. From August of 2022, councils will be forced to allow townhouses of up to three storeys with up to three dwellings on almost all residential sites across the country, and these will not require any resource consent. With the aid of DiPasquale et al. (1992)'s Four-Quadrant Model, describe how this new policy will affect the prices of private housing, rents, and housing supply. 1(a) Choose the correct diagram to show the initial and final equilibria of the four- quadrant. (2 marks) 1(b) Explain each endogenous variable of the model after the legislation. (6 marks) 1(c) Rank in order, from largest to smallest, the impacts of such an up-zoning policy on housing prices in Auckland, Wellington and Christchurch. Explain your answers. (2 marks) [Diagram A] [Diagram B] Rent $ Rent $ Asset Market: Space Market: Asset Market: Space Market: Valuation Rent Determination Valuation Rent Determination D R $4 Price $ Q* * Stock (SF) Price $ Stock (SF) Asset Market: Asset Market: Construction Construction Space Market: Space Market: Stock Adjustment Stock Adjustment Construction (SF) Construction (SF)[Diagram C] [Diagram D] Rent $ Rent $ Asset Market: Space Market: Asset Market: Space Market: Rent Determination Rent Determination Valuation Valuation R * * Price $ p* Q* Stock (SF) Prices P* Stock (SF) Asset Market: Asset Market: Construction Construction Space Market: Space Market: Construction (SF) Stock Adjustment Stock Adjustment Construction (SF) [Diagram E] [Diagram F] Rent $ Rent S Asset Market: Space Market: Asset Market: Space Market: valuation Rent Determination Valuation Rent Determination R* R* * Q* price $ Stock (SF) Price $ Stock (SF) Asset Market: Asset Market: C* Construction Construction Space Market: Space Market: Construction (SF) Stock Adjustment Construction (SF)" Stock Adjustment