New Zealand’s housing crisis has been decades in the making. And we know that one of the key barriers to the construction of more homes is a lack of basic infrastructure.
Our $3.8 billion Housing Acceleration Fund – designed to speed up the pace and scale of house building – has taken a big step toward tackling this problem. Today, the criteria to access $1 billion of this fund has been made available, with an invitation for expressions of interest set to be released on 30 June.
This fund will jumpstart housing developments by funding the vital infrastructure needed for new housing – like roads, water pipes, and flood management systems. It’s something local government and developers have been requesting for some time, and it will enable more houses to be built, faster, right around the country.
The release of criteria to access the contestable part of the fund – this $1 billion – is a key milestone in our plan to accelerate the development of land to get more homes built, quicker. This part of the fund aims to allocate funding to infrastructure projects that will enable house development in the short to medium term.
From the end of this month, councils, iwi, and developers will be able to start pitching for funding. Priority will be given to those projects that are on track to bring in multiple new homes quickly, in the right places.
The fund will be weighted toward developments that might not otherwise be funded rapidly enough to meet housing demand, and it will seek to ensure an even spread of projects across large urban areas and regional centres across the country.
The criteria released today sets out which costs and projects will be eligible.
Eligible projects include those delivering new or upgraded infrastructure for drinking water, waste water, sewage, roading, and flood management that enable (wholly or primarily) the building of new and additional homes. Eligible costs include feasibility studies, design, consenting, and – in some cases – land costs.
In major urban areas like Auckland, Tauranga, Wellington, and Christchurch, successful projects will be expected to deliver at least 200 new homes. In smaller urban centres like Rotorua and Nelson, the expectation will be set at 100 homes. Projects in other parts of the country should produce at least 30 new homes.
Further decisions about how the rest of the Housing Acceleration Fund will be spent will be made throughout the year. Already, $350 million has been ring-fenced for a Māori Infrastructure Fund.
The Housing Acceleration Fund is just one part of our housing package, which aims to tackle the housing crisis and help more Kiwis into homes. Along with the new $2 billion borrowing capacity for Kāinga Ora, our commitment to reform the RMA, and our free trades training (which is upskilling more workers for our construction sector), it will help us to green-light tens of thousands of house builds.
As well as working to increase housing supply, we’ve also taken action to dampen speculation and tilt the balance in favour of first home buyers. We’ve lifted income caps on First Home Loans and First Home Grants, extended the bright-line test from five to 10 years, and banned offshore speculators from our housing market – among other initiatives – to relieve pressure on the housing market.
The housing crisis felt across the country has many causes. There’s no silver bullet or quick fix. But the Housing Acceleration Fund will dismantle barriers holding up construction, playing a key role in our efforts to tackle the crisis, boost supply, and get more Kiwis into homes all around Aotearoa.
For more information, check out a rundown of our housing package announced in March and the steps we’re taking to support renters. To see everything we’re doing on housing, click here.
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