By David Hargreaves
The Government's expressed dissatisfaction with the scope of proposals received so from the big local councils bidding for its $1 billion Housing Infrastructure Fund, suggesting it would like to see more "ambition" displayed by the councils.
The fund, announced in high-profile fashion at the National Party's annual conference last year by then Prime Minister John Key, is to pay for water and roading infrastructure in high growth areas to accelerate house building. (See here for more details on the Fund)
At the time it was seen as the Government's response to criticism for not addressing the infrastructure funding roadblocks to more housing developments, particularly in Auckland where the Auckland Council is up against its borrowing limits.
The contestable fund is available for councils in Christchurch, Auckland, Hamilton, Tauranga and Queenstown to build infrastructure. They would either have to repay the funds or buy back the infrastructure after it was built and home owners were paying rates. The Government would create the fund by borrowing up to NZ$1 billion.
In a joint statement, Infrastructure Minister Steven Joyce and Building and Construction Minister Dr Nick Smith said the "high-growth" councils now had till March 31 to submit final proposals for a share of the $1 billion.
Smith said eligible councils had already given an early indication of their interest, with indicative proposals in late 2016 amounting to $1.79 billion for infrastructure.
"Depending on which final proposals are supported, the Fund could potentially support about 50,000 new dwellings."
Joyce, however, suggested the Government hadn't been satisfied with what they had seen so far.
"Only a small number of the 17 proposals received through the expressions of interest phase would result in projects being advanced earlier than previously planned by the councils," Joyce said.
"We want to see more ambitious projects that will have a greater positive impact on housing supply over the next five years."
Smith said that council constraints in financing the necessary infrastructure - the water supply, storm water, waste water and roading - could slow down the opening up of new housing areas, which is why the Government announced the Housing Infrastructure Fund last year.
Smith said the process for councils to secure funding had been undertaken in two steps to accommodate the local body elections late last year.
“This has enabled councils to ‘test drive’ and refine their ideas before the final proposal stage.
“The final proposals will be assessed by an independent panel, with priority given to those initiatives that enable the most new housing. We expect to announce the final allocations later this year.
“The Housing Infrastructure Fund is part of the Government’s comprehensive plan to grow additional housing supply alongside Special Housing Areas, the new Auckland Unitary Plan, the National Policy Statement on Urban Development, reforms to the Resource Management Act, the Crown Land Programme and the HomeStart scheme. We have been successful in more than doubling the house build rate from 15,000 to more than 30,000 a year.
“This initiative on infrastructure funding is to ensure this strong growth in new house supply continues.”