Government says its Housing Infrastructure Fund has received indicative proposals for $1.79 billion of infrastructure; Ministers say few of the proposals so far would increase the development speed of proposed projects

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.”

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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23 Comments

Councils are not ambitious and 1 billion is small fry. Look at all of the future urban land available for subdivision only once council or the owner have done a complete structure plan. The costs are huge and there are not enough incentives for either council or the landowner to carry out the structure plan. Hence you have "land banking." Be honest - how many councils are working on structure plans as we speak? Where is the plan?

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The new sewerage pipeline out to west Auckland subdivisions is costing over a billion dollars. Our enlarged population is not more productive, our export earnings have gone down.
The government has stated that Auckland needs over 100 billion dollars spent on its infrastructure to support the enlarged population.
High immigration is a failed experiment that is impoverishing working class and young NZers.

Absolutely right. The numbers don't add up. The government is trying to mask it's failure to produce meaningful, sustainable economic growth by a population fuelled construction boom ponzie scheme; funded by council and personal borrowing. Lets hope that the NZ voters give the government the message that we are not fooled and don't appreciate the perversion of our economy for their selfish political reasons.
Take note Labour. You are note a lot better.

And note the official commentary this morning on the uptick in unemployment - immigration IS, after all, a significant contributing factor to the rise i.e. immigrants ARE displacing Kiwis in the job market- contrary to various recent assertions that this is not occurring. Unless of course, an increasing number of immigrants are joining the dole queue. Which wouldn't be a surprise given NZ's current huddled masses open door free for all immigration policy.

Our media are continuing to promote migrants as a success story.
Most NZers are too busy getting through life to think about politics and trust the media to steer them and educate them.
Our media is letting down its audience by wanting to be politically correct and only say nice stuff.

An unrelated but classic example of how meaningless and impotent our media has become is their big whoha about Trump excluding Muslims from traveling to America and yet almost zero impartial reporting on the invasions and bombings of Afghanistan, Iraq, Libya Syria.....
Our media are as toothless and sponsored as the press in prewar Germany!

The media fills an essential role in keeping politicians in check. Or at least that is supposed to be their function. Now they are useless and don't report certain things. It was interesting for all the drama surrounding Kim Dotcom that the Crown's failed extradition case didn't get any coverage. The Crown's case was so weak as to be laughable and incompetent. I only know this because the Judge allowed youtube streaming. This bias in reporting is misleading the public.

The media has ignored the US secret war. Yet I look through various newsfeeds and can get information on targets that were attacked by drone in Jordan. If that's what Obama was doing then imagine what an idiot like Trump will do. Of course the worst won't be reported, only distracting dramas.

100 billion dollars for infrastructure. So divided by a population of 1 million thats $100K for each individual or $500K for the family. Add that to $1M for the house.
But hang on - it's spread over 2 million people. But hang on 2 million will require a bit more infrastructure. Let bring in some folk and make it 3 million to pay for it all. But hang on ............
Maybe instead emigrate to somewhere better. A favela in Rio could be good ?

Go ahead KH move to the favelas

Move to Brisbane, where the population has averaged faster growth than Auckland over the last 6 years and yet somehow they will have a housing surplus next year.

Have you seen how many apartment blocks are being built in Brisbane? But I guess it's very easy to build anything here in Brisbane, not as much red tape compare to Auckland Council

Should we be considering building a new treatment plant, as well, or has the current one room to receive more?
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I'm actually surprised the minister is surprised: projects like these and plans like these can't be done in 6 months time - did he really think he'd have the full amount completely allocated to top-notch-can't-go-wrong plans?
As already mentioned: 1bn is peanuts for projects like these, and then we're only talking water, we've not even taken into account
- roads
- public transport
- green spaces
- schools
- hospitals
- ALL emergency services
....
where're the funds for those suppose to come from? Rates?
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The minister forgets that the councils represent their rate payers and the ratepayers don't want to pay higher rates or road tolls. The minister thinks that the councils can just magic up the services and infrastructure needed to support the population growth.
He even thinks his 1 billion dollars is some sort of carrot. It has been successful however as propaganda to shift the blame from the government to the councils thanks to our inept media.

This is Auckland Council we are talking about? Auckland Council are the leaders at implementing plans to waste ratepayers money.

The Auckland Council plans to sprawl like an amoeba gobbling up all the land around Orewa, Kumeu, Pukekohe, Warkworh and Clarks Beach. The infrastructure spend is immense, as all of these remote low density sprawls shall need to have their transport and services linked across miles of empty space to Auckland City.

Auckland ratepayers love it, they must do, they keep on voting for it.

Auckland Council have no control over immigration policy on a national level. They're being told to stop complaining and absorb the surplus 45k people every year.
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It's the people who vote National who should be thinking again where to cast their vote, if immigration bothers them

Hey, great idea. How about creating some Favela suburbs in AKL. Would solve the crisis in one fell swoop.

Why mess with the suburbs. What is wrong with Auckland Domain or Orakei Domain as per the Moutoa gardens protest.

Excellent fact based article on immigration and housing in Auckland/New Zealand here. Especially the housing shortage graph. Interest.co.nz should have an updating version of it on this website.
http://www.macrobusiness.com.au/2017/02/housingimmigration-dominate-nz-e...

The Housing shortage table you mention is interesting, it hinges around the assumption that there are exactly 3 occupants per house, I believe this is old data and with the current housing pressures it is more likely there's an average of 4 occupants per house. This would dramatically reduce the shortfall of houses.

When you consider students who appear to be living many per apartment, and the number of garages being used for housing you are probably right.

That is interesting divisive thinking Yvil and Doris.

So what you are saying is there are two groups of people in New Zealand. There is the old group who like to live on average 3 people per house. Then there is this new group who in 2016 like to live 4.5 people per house.

This being your explanation for our current housing situation?

The whole under building argument doesn't cut the mustard for you?

I'm not sure what you mean by divisive thinking Brendon. But my reasoning is this: certainly there are more people in Auckland, going by the stats and also easily observed in the increased traffic and crowds.

Obviously they need somewhere to live. However, while the rental market is tight and expensive, rent prices haven't increased much at all. The housing problem is more a house price problem than an accommodation price problem.

I think part of the reason is that there are indeed two groups of people - those who own property or can afford to pay a good amount of rent, and others, poorer and maybe less desirable tenants, who are making do by sharing rooms, camping out in garages or sleeping in cars.

And no, the underbuilding argument doesn't impress me. All else being equal (free flow of money out of China and easy availability of credit) I don't think building more will do anything.

There are flats in Island Bay, Wellington with 4-6 people per room. They are just trying to take the pressure off the housing market, not creating a slum or anything.

I went into Papakura council today to ask about future urban property. Was advised that the council won't be doing any structure plans. So it is entirely up to the individual owners. I can not see how this works where you have multiple owners in a certain zone who all have different time frames, budgets, and goals. Unless a big buyer like Stevensons buys up all the land, is any of this land actually going to become available for housing????