Government’s $1b fund to support 60,000 new homes
Article by Henry Cooke, Stuff.co.nz
Prime Minister Bill English said the fund would bring forward development on 60,000 homes.
The government will loan five councils a cumulative $1 billion to build roading and water infrastructure to support up to 60,000 homes.
Auckland, Hamilton, and Tauranga are the big winners, receiving hundreds of millions of dollars of interest-free cash each.
Queenstown and the wider Waikato region also had projects green-lit.
The fund is intended to help councils support growing populations with roads and other infrastructure.
Up to 60,000 houses would be “brought forward” thanks to infrastructure being completed earlier than expected, in some cases by as much as eight years and in some cases just by two.
Prime Minister Bill English announced the successful bids at a press conference in Hamilton on Tuesday morning.
Prime Minister Bill English, centre, with ministers and Hamilton politicians at the announcement.
The funding was spread across nine proposals from five separate councils coping with high population growth. Those same councils had made 16 proposals in total.
There was speculation that some councils could not take advantage of the scheme as they had tight debt limits to keep in mind.
Four projects which had a “high strategic fit” were not funded due to council balance sheet problems, and because the scheme was oversubscribed.
Auckland Council will receive $300m to support up to 10,500 homes in greenfield developments at the Whenapui and Red Hill areas in the northwest.
This included five roading projects and five water projects. The money would be loaned out between 2019 and 2027.
Hamilton and the Waikato councils will receive just over $300m to fund projects in southeast Hamilton and Te Kauwhata supporting over 10,000 homes.
The proposal includes building a new bridge over the Waikato River from Hillcrest to Peacocke, a number of key roads, and installing main water, stormwater and wastewater pipe networks.
Tauranga City Council will be loaned $230m to upgrade the Te Maunga Wastewater Treatment Plant, build a new water treatment plant, and build out roading and water infrastructure toa Greenfield development at Te Temu, at the eastern end of Papamoa. This would support a total of 35,000 homes.
Meanwhile, Queenstown Lakes District Council would receive $50 million to support two new greenfield sites at Qual Rise and South and Ladies Mile in the Frankton Flats. This was expected to support 3500 homes.
Building and Housing Minister Nick Smith, left, and Auckland Mayor Phil Goff. Auckland had one project funded but balance sheet problems meant they could not get any more.
The Housing Infrastructure Fund was announced in July of 2016. An independent panel of experts considered the applications.
Building and Construction minister Nick Smith said in May that it was oversubscribed, with councils applying for $1.5b in loans.
Auckland was working with the government to fund two other projects that their balance sheet could not take a loan for. Financial instruments and private investments might be the solution.
“This infrastructure initiative is the logical next step in our housing programme,” Building Minister Nick Smith said.
“We have freed up planning constraints on new subdivisions through Special Housing Areas and reforms to the Resource Management Act but the areas zoned for residences cannot be built on without infrastructure. We will be working closely with the Councils and developers to ensure these projects are progressed at pace,” he said.
“The first earthworks will be under way this coming summer, the first homes consented early in 2018 and homes completed by late 2018.”
“The infrastructure to be funded includes a new bridge over the Waikato River, a State Highway interchange, arterial roads, water and waste treatments plants, pump stations and reticulation and collection networks, and storm water drainage”, Finance Minister Steven Joyce said.
“The announcements we made today are going to bring forward 60,000 houses, which is a huge number of houses. It will bring a lot of confidence to the market,” English said.
“It’s just adding to the momentum that’s already there,” Joyce said.
Some of the plans had been in place for 30 years but had been waiting for infrastructure support.
Joyce said more announcements around infrastructure were in the pipeline for coming weeks.
Most of the money was allocated with $112m left over for contingencies.
The money must be paid back within 10 years.
LABOUR: ‘GHOST HOUSES’
Labour housing spokesman Phil Twyford said the announcement over-promised without enough detail on delivery.
“Like the Special Housing Areas, this is a just a list of ghost houses from a Government that has made an art form out of promising houses but never building them.
“Bill English and Nick Smith are attempting to pull a fast one. They’re claiming specific numbers of houses will be built, but they’re not actually providing funding for a single house.”
“This is loans for water infrastructure and bridges; National cannot point to a single plot of land and guarantee a house will be built there as a result.”
Labour’s KiwiBuild policy would see 100,000 affordable homes over ten years.
“National’s so-called Housing Infrastructure Fund is simply a line of credit for councils who are already up against their debt limits.”
Twyford said Labour would change the way infrastructure was financed to make up for the deficit that had built up during National’s time in government.
Article by Henry Cooke, Stuff.co.nz