The National Party's new housing policy comes with strong conditions for councils.

The opposition has had an about-face on the bipartisan Medium Density Residential Standards allowing three storey housing in all residential areas

Under National's new policy, councils have the option to exclude certain areas from housing development.

Housing spokesperson Chris Bishop says councils still have the chance to use the Medium Density Residential Standards.

"What we are saying is- you can exempt particular areas if you'd like to, but you've got to find the growth elsewhere. In fact, you've got to find even more growth than before."

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