Special purpose vehicle will fund $91 mln of infrastructure to support building of 9,000 homes at Wainui, north of Auckland

Housing and Urban Development Minister Phil Twyford's extolling the virtues of public-private partnerships in announcing the $91 million funding of infrastructure to support building of 9,000 new homes in Wainui, north of Auckland.

A feature of the project will be that it will include an "infrastructure payment" collected from section owners through Auckland Council rates bills. There's no indication at this stage how much the payment will be.

“The Milldale project is an example of the innovative new approaches to financing infrastructure that the Government is developing through the Urban Growth Agenda," Twyford says.

"This funding model can be used in other high growth areas affected by the housing crisis to help more houses to be built more quickly.

“This could include private investment in infrastructure funded by a charge on the properties that benefit from the infrastructure.

“This new infrastructure funding model will result in a large number of homes being built much sooner than otherwise would have been the case. 

“One of the major road blocks to our towns and cities growing is the lack of ready access to finance for the infrastructure that allows for new urban growth, for green or brownfields developments,” Twyford says.

The infrastructure for the housing development's being done through a Government Special Purpose Vehicle (SPV) created in partnership with Auckland Council, Crown Infrastructure Partners and Fulton Hogan Land Development.

Twyford says the Milldale project demonstrates an approach to funding that allows private investment in new infrastructure with the debt sitting on a balance sheet that is neither the Council’s or the Government’s.

Auckland's Mayor Phil Goff says the project enables nearly 4,000 new dwellings in Milldale and the infrastructure can support another 5,000 dwellings in the surrounding areas. "It’s a big step towards meeting Auckland’s housing needs," he says.

Fulton Hogan Land Development has already started work on the Milldale development at Wainui. The infrastructure being funded will support the Milldale development and will also enable another 5,000 homes to be built nearby, with $33.5 million funding for this being provided by Auckland Council.

Crown Infrastructure Partners has secured long-term fixed-rate debt from Accident Compensation Corporation. The SPV will be funding $48.9 million towards the infrastructure, with the Crown contributing less than $4 million.

The SPV funding will be repaid over time partly by Fulton Hogan Land Development and partly by section owners as an ‘infrastructure payment’ collected with Council rates bills.

Twyford says this new model of infrastructure financing means that long term debt can be raised through the SPV to enable the building of large scale infrastructure, which is needed to step up the rate houses being built, and to assist Councils who are nearing their debt limits.

He says the Milldale development will be a modern, contained urban development with green spaces and parks, a town centre, cycleways and walkways, and potentially education facilities, and will be connected to the Northern busway.

Fulton Hogan Land Development in conjunction with a joint venture partner has previously developed Millwater, on the eastern side of the northern motorway and sees Milldale "as the next evolution of this urban development".

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44 Comments

And one assumes that the blocks will come to market ex-infrastructure capital costs ie: lower than others funded by the developer and front-loaded into the sale price.
It's not perfect, but it's a start.

So not only do we have the huge increase in development contributions after 1 Jan or 31 Jan (the council quotes both dates), we now have these infrastructure costs added onto the ongoing rates bills! Wonderful.
To calculate how much less you would want to pay for these properties will be difficult. And it will differ between people.
On the other side of the coin the bank will make a calculation on your behalf of what you can afford.....you will have these ongoing rates costs so you can only borrow.....

Hmm, more sprawl, less density. Will we ever learn?

We are learning by copying LA.

How many Jimmy Grants are we still bringing in every year to cook burgers, drive taxis and run $2 shops? Last I checked it was way more than the number of bedrooms PT is slapping a KB label on.

Councils, building material merchants and land bankers all laughing at us. Oh and the houses are made from junk materials with poor thermal performance.

Surely double glazing ?
Oh no Wainui is too far north to warrant double glazing right ?
Today I passed many new apartment buildings going up to cater for the ever aging baby boomers moving out of their houses and renting Yes renting a 1950sqft apartment at affordable monthly rent with air con / heat & hotwater included.
NZ will never achieve its housing needs until governments address the high costs of building materials and
the lack of a land transfer tax of say 1.5% to help recoup funding of city infrastructure requirements
Sadly the leafy wealthy housing areas of Auckland have never paid their equitable share of property taxation
I myself can say now I paid a fraction of the property tax I pay here for a similar priced property
Auckland City is around 6 to 7 billion in debt already with no idea how to keep up its interest payments let alone pay back capital
Time for radical change but I don’t see it happening

From what i've read all new buildings require a minimum thermal performance of windows, double glazing isn't technically required, but is probably the easiest way to get to the specified minimum.

This is correct. You could use single glazed PVC or wood to meet the code (and outperform a code aluminium double glazed window in the process). Why do we keep making part of the thermal envelope from a material which is one of the best conductors of heat (and cold) - this is the reason aluminium is used for saucepans.

It's the metal window frames NL. Even if you cough up for "thermally broken" frames the NZ idiots stick the warm side of the window way out into the cold with their silly NZ mounting system. There are other details - no foundation insulation, improper insulation installs, drafty bathroom vents and drafty wall/truss connections. The building code has no ventilation testing standards and doesn't calculate insulation performance correctly - it's more important to have complete insulation coverage than double up on one area.

The point being we're far behind the rest of the world with this stuff yet somehow paying far more for materials.

add poor airtightness, poor indoor air quality, low surface temperatures and excessive thermal bridging then you have a Kiwi house. Our last code revision in 2008 was already 20 years behind the leaders.

One problem is that most of the timber in NZ is from the top unpruned log, we export the bottom half, so it's young and rubbish.
I did some work on my farm cottage, the council made me use finger jointed barge board timber (under the spouting), cost me $1600, in the first ten years it rotted and had to be replaced. My sheep yards were built 8 years ago and the H3 treated pine is almost stuffed, my friend has new cattle yards, 5 years old and the H3 pine is already rotten.

As I understand it the sapwood (last few seasosn of growth) is useless. We build with pine which is bad enough but to make matters worse the trees are harvested too young which means only a small percentage of the tree has matured into hardwood.

it's all softwood, the pruned log is better but it all should be grown for at least 30 yrs, around here some has been cut at 18 yrs, i don't know why.

I'm no fan of sprawl. That being said, the Precinct Plan for Wainui (Milldale) does have a reasonably good mix of housing typologies zoned for and good provision for walking and cycling. Will be a slightly better version of Millwater on the other side of the motorway. I think it will actually be a nice place to live, especially when the busway is extended up to to there. Will be expensive though - can't imagine getting a stand alone house for less than $1.1m. May be wrong, but I think the "development" arm of Fulton Hogan is a key player in terms of the landholding.

http://unitaryplan.aucklandcouncil.govt.nz/Images/Auckland%20Unitary%20P...

Sprawl needs to be designed - express busways just won't cut it.

Admittedly it's not great now as the sprawl has spread, but at the time in the UK when they were building overspill towns after the war (Milton Keynes, Harlow, Basildon etc for London, Runcorn, East Kilbride etc etc..) they were built with accessibility back to the major cities in mind - quickest train ride from MK to London is just over half an hour, and it's about the same distance to Pukekohe.

I don't quite understand what you are saying.

In what sense was future development in this area not "designed"? It went through a robust re-zoning process through the Unitary Plan hearings and Special Housing Area legislation. It has a detailed Precinct Plan setting out the future transport network and land uses.

In what way won't the proposed rapid transit connection (dedicated busway) "cut it"? What do you suggest instead?

I'm more of a fan of rail over bus, more people, faster movement. In that regard I'd get the Japanese engineers over to assess and advise on train services, or some German engineers, they're rather good at that type of thing.

Yes, I prefer rail to bus as well. But there is not sufficient demand anticipated to justify light rail up to Milldale, and the busway is theoretically future proofed for conversion to light rail eventually (although the transition would be very difficult). And then there is the question of how light rail would get commuters to the city - good luck getting a tram over the harbor bridge. The cost and level of development anticipated certainly doesn't justify heavy rail yet. In this case, the busway won out because, among other factors, it is much cheaper to deliver, can leverage off existing infrastructure (rest of the busway and harbor bridge) and easily integrates the local road network.

BuySellLowHigh etc is right
Even more so when you consider https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119...
A mass rapid transit system requires a population of 5 million to merit investment & ongoing operational costs ( remember that even the NZ rail system is narrow gauge due to the lack of population at the time it was built along with the topography of the country.)
Buses are in fact the answer for Auckland along with dedicated bus lanes and the necessary car parks where people can leave their cars during the day Sadly the Constellation drive car park filled to maximum almost immediately after it was built & the North Shore City (at that time pre Auckland Super City ) took an age to create more carparking for the daily bus travel commuters.
If you can’t even get that right quickly I don’t see housing being solved practically speaking

I must've been seeing things in Basel then. With a population of not much more than the Hibiscus Coast it manages to have a pretty amazing rail system throughout the city. There are probably dozens of other examples around the world of places with far, far fewer people than Auckland managing just fine with rail. If you look at how crammed the northern busway services are every day then you must agree there is plenty of demand. What there also is, unfortunately, is the typical Kiwi scepticism of doing anything wholeheartedly. After all, why do anything right when you can do a lousy version for half the cost?

Light rail to Silverdale would be great, but there are real world constraints to consider. Govt would struggle to fund it and we don't yet have a second harbor crossing with light rail capacity. Moreover, there is still capacity in the busway. It may not be the most exciting option, but it was definitely the most realistic/practical.

The northern busway will be upgraded to light rail eventually when it runs out of capacity. When that time comes, it will be interesting to see how the motorway deals with all the bus traffic while the upgrade is being done.

Agree, however a second harbour crossing must be on the table in any case given the diminishing economic life of the existing one. There is money available if the government would take off its straitjacket (yes I know you can't take off your own straitjacket).

Edit: you are also right about busway capacity. Individual services are overused, but there is room on the actual busway for many more services. My problem with the busway is the same theme all over again - why does it stop at Albany? Oh right, don't want to spend too much eh! Sigh. I wish we, as a country, would actually get out in front of a problem for once instead of reacting 20 years too late, at many times the price, every damn time.

Yes, second harbour crossing is very much on the table. There are indicative plans online. According to the Auckland Transport Alignment Project, construction of the second crossing is anticipated in the late 2030s, maybe a bit later. Sadly, Phil Goff wants it to have bus lanes instead of light rail! Unbelievable.

Auckland Transport suggests upgrading the Northern Busway to light rail required by the mid-2030s.

Absolutely agree we consistently fail to get out in front of problems.

Surely having it NOT rail allows more options for where it can be. Rail can't go particularly steep in general, and boats need to get in to Chelsea.

Yes, rail can't have steep grade, but Goff's plan not to have rail was made for financial reasons. He wants to build bus lanes first and then upgrade these to light rail later, so grade would need to be suitable for rail anyway. Location has all but been decided already.

Seems daft to half do something, particularly if the long-term the plans are to do it anyway. Cheaper in the short-term but surely the upgrade of bus lanes will cost as much if not more than just building light rail in the first instance? Is this can-kicking again do you think?

The new harbour crossing is planned to be a tunnel not a bridge. And it would be far cheaper to build a rail tunnel than a busway tunnel, given the much smaller tunnel needed for a train and the vast ventilation requirements of a busway.

Yes, I know it will be a tunnel. Absolute rubbish that a light rail line through the tunnel would be cheaper than a dedicated bus lane. What on earth gave you that idea? Ventilation is required in both cases as private vehicles will be using the tunnel as well.

Open your eyes, take your blinkers off and think again. Given time, the roads will not be as congested. Think scooters, ride sharing, driverless cars and so on. At present every car driving into the city needs somewhere to park. Given time much of this 'space' will no longer be required.

Much of our roading, car parks, parking buildings and so on will be obsolete.

For those that are in denial, think horses cars, personal computers, phones..and lime scooters. It's only just starting.

I agree, itll be slightly funny if just as we solve the traffic problems with massive transport infrastructure spending completed, self drive completely removes the need as we all give up personal ownership of vehicles and use a much smaller fleet of self drive cars.

Self driving cars don't solve the problem of 50,000 people out in the burbs all trying to get into the city at the same time if its still 1 or 2 people per car. It has to be more people per minute per lane, self driving minivans with ~10 passengers per van and highly efficient routing might work. bigger vehicles like buses might sound better, but then you have to get say 60 people that are coming from a fairly tightly clustered area and going to much the same destination area. It could get rather hard, and once you start having to zigzig all over the place to pick up people or drop people off at dispersed locations people are going to shy away from that mode of transport, just like non-express public buses now.

They may solve the problem as they only need to pick up one other person on the way, i.e. bit like uber ride share. Its a step change using less cars more effectively which will drive more efficient use of the car, if we remove 20% of the cars we no longer have the same congestion issues.
On a another but similiar note, here in Wellington the bus does not pick up passengers when full, I drive past 3 bus stops with people waiting, I can fit 4 people into my car going into central wellington, if I had a snapper terminal I could charge less than a bus and then the bus could pick up the people it drives by by being too full, a win win, except for the bus company because it knows that that those people will have to wait and catch the next bus 15 to 20 minutes later. with a bit of community spirit and technology we could be a lot more effective and efficient. Currently I will pick up those that I know, nd those that I get to know when I catch the bus.

BuyLowSellHigh
Absolute common sense
This is why the northern busway was chosen because it was the practical solution and it has proven to be extremely cost effectiive.
The worst thing to happen to Auckland transit times has been the mass importation in recent years of more migrants per capital than London !
Pity there’s been no collection of land transfer taxes or much else but the migrants are using NZs free hospital system & free ( relatively) education system and laughing at their great luck
As a migrant to USA let me advise that I as a migrant pay for everything I use here There is no free anything

Feckless … No scepticism at all
I’m basing my opinion on the city of Boston USA the first subway before even the London Underground
You may also note that even the great city of New York subway system itself is an amalgamation of 4 rail systems because ? Economics
The 5 million is not my figure but one used in a documentary I saw on modern transit systems versus their economic cost benefits
Of course you will know all systems are subsidized and therein lies the economic calculation necessary
Of course many cities can make their own decisions as to their wants & needs & ultimate operational costs
5 million is a good break even point is what the documentary talking heads agreed was the minimum desirable

Sprawl might not be ideal, but let's be honest, it's unavoidable when most Kiwis regard apartment living as something for migrants and underachievers. That's not the fault of town planners or politicians. In this climate, the best we can do is manage the sprawl with decentralisation. A proper town centre at Wainui will help, and more jobs in (and north of) Albany will also help.

My issue with these targeted rates is selfish, admittedly, so roll your eyes if you must. However, I resent populist governments handing out taxpayer subsidised housing to families earning up to $180k per annum (!!!!) in places like Northcote (10 minutes from the city!) when those of us who were actually responsible with our money moved out to places like the Hibiscus Coast (instead of either overextending ourselves in inner suburbs, or bitching and moaning for years until the gummint fixes it for us somehow), and will now get slugged with targeted rates for doing so.

Before you say it - yes, I have lived in apartments, I did so for 20 years and for the time being it's not a good fit. I am sure I will be back in an apartment before too long.

Sprawl in Auckland happens because it is an isthmus City
Still only a meagre 1.5 mill pop
Problem with Auckland is like everywhere in NZ inefficiency in a host of areas Construction is a cottage industry
The list of Aucklands leaky apartment buildings testament to the fact

Complaint would be valid if there were subsidised houses.. KB houses are not subsidised. Just cheap and nasty on a postage stamp of land. And the way the market is looking very soon they will be seen as overpriced.

eg, 4 bedroom kiwibuild at papakura vs this place about 300m away:
Existing 4 bed home on 568m2: https://www.trademe.co.nz/property/residential-property-for-sale/auction...

vs

Kiwibuild on 230? m2 : https://www.trademe.co.nz/property/residential-property-for-sale/auction...

If I was going to buy in Papakura I know which one I'd be looking at first.

One of the reason apartments are looked down on is because NZ has two types of apartments.. student shoeboxes and luxury apartments, with not a lot of decent stuff in between. Then factor in extortionate body corps and leaseholds/ground rent.. Is it any wonder no-one is keen on most apartments?

That backyard looks horrific on the Kiwibuild property, hard to tell but is that a concept drawing or an actual photo with some stupid filter applied?

They should fire whoever chose the colours. Yuck. Probably the same person that designed the AirNZ uniforms.

So far this year Auckland has banned houses at Okura and accepted houses at Wainui. 1000s to commute an additional 20 km a day and cause more CO2 pollution. Is Auckland City designed to accelerate climate change?

The article says, 'infrastructure funded by a charge on the properties that benefit from the infrastructure.'

So the real question is, "what is that infrastructure they are talking about?'

And the answer will be, whatever it is, it will be of no direct benefit to those that are paying for it.

This has revenue grab written all over it.

The other little point of Interest is that, if I am reading all this correctly, the debt won't be a Crown debt.......except for the piddling $4m.

Crown Infrastructure Partners has secured long-term fixed-rate debt from Accident Compensation Corporation. The SPV will be funding $48.9 million towards the infrastructure, with the Crown contributing less than $4 million.

I await (as always) Enlightenment....

Development Contribution Levies are a misnomer if ever there was one .

The developer pays for EVERYTHING , and then is slapped with this "contribution" levy on top of that .

The funds paid are almost never used for what was intended , its a tax plain and simple and it gets gobbled up in council salaries .

Phil is a runaway debt truck driver, but never learned his lesson.......in life.

An ACC funded accident, waiting to happen. for ..the Taxpayers delight and our eternal salvation.

Tui Bill Board. Me-thinks.