Labour and National's deal to water down their townhouse bill means it will now deliver 37,477 new homes in Auckland - 1690 fewer than had been originally hoped for and a loss of 4 per cent.

The two parties came together to pass a bill that would make it easier to build three buildings of three storeys on most sections in our biggest cities.

But the bill was ripped apart by a barrage of criticism in select committee from councils and residential associations worried they would lose control of zoning and design standards (although there were some voices of support).

Two significant changes have been made since then.

Initially, the bill allowed height to boundary ratios of 6m at the side and rear boundaries, with a 60 degrees recessionary plane (this is the angle at which the roof is allowed to rise).

But concerns over sunlight loss saw the environment select committee recommend this be reduced to 5 metres as of last Thursday.

Now, an amendment from the Government, which National has indicated it is likely to support, has watered that down to 4 metres with the same recessionary plane.

This change will be put in a supplementary order paper (SOP) to amend the bill, which is up for its second reading today.

Modelling released by the Government said that if no law change were made, Auckland would see 40,609 homes added in the next 508 years.

The townhouse bill in its original form would have nearly doubled this to 79,776 dwellings - these changes will reduce that to 78,086 dwellings (37,477 more compared with doing nothing).

The modelling shows an alternative proposal, which would have reduced the boundary ratio to 3 metres with a recessionary plane of 45 degrees would have cut the number of houses delivered by the bill to just 67,652 - a drop of 12,124, or 31 per cent.

Prime Minister Jacinda Ardern said that height to boundary controversy was "an issue that we always intended to work through at select committee".

"My understanding from those involved is that agreement based on submissions has been reached, but it is not a significant change at all," Ardern said.

Ardern said she was happy with the compromise, saying "if it's not having a significant impact on the amount of additional housing you create why not find a solution that meets the needs of all parties?"

National's housing spokeswoman Nicola Willis said the changes were appropriate.

"The changes that are being made address some of the legitimate concerns that were made at the select committee and we have made changes that are pragmatic - things like reducing the height of the buildings in relation to boundaries, introducing landscaping requirements, ensuring councils have discretion to exclude some areas from densification," Willis said.