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Housing Infrastructure Fund

The Housing Infrastructure Fund is a $1 billion fund that provided 10-year interest-free loans to high-growth councils. The funds were provided for core infrastructure to support housing development and increase housing supply.

About the Fund

The Housing Infrastructure Fund ('the Fund') was a one-off contestable fund.

Councils in high-growth areas applied for funds to bring forward the development of transport and water infrastructure required for new housing — especially where financing issues are holding up development.

The Fund is part of a wider strategy to increase the supply of houses in high-growth urban centres.

Assessment of projects

Decisions to approve projects were made following:

  • consideration of the councils’ detailed business cases by the Fund’s Independent Advisory Panel, and
  • the Panel’s recommendation to Government.

The business cases were required to confirm the:

  • infrastructure required
  • costs
  • development timeframes, and
  • financial details of the project.

Approved projects

The approved projects, as at October 2018, are:

Local authorityApproved loan amountPurpose of loanNumber of housesDetails
Hamilton City Council $290 Million A new residential development at Peacockes in Hamilton 8,100 houses Infrastructure for this project involves constructing a new bridge over the Waikato River, arterial roads and wastewater and water supply mains.
Tauranga City Council $52 Million Upgrade to the Te Maunga Wastewater Treatment Plant Combined - 35,000 houses across Tauranga City This upgrade is to provide additional treatment capacity, as the plant is operating at the limits of its capacity.
as above $106 Million A new ‘Waiari’ water treatment plant as above This will be Tauranga’s third water treatment plant, providing additional supply by drawing water from the Waiari Stream near Te Puke. Tauranga's existing water supply is operating at around 97% of its capacity.
Waikato District Council $38 Million Residential development at Te Kauwhata 2,790 houses Infrastructure for this project will include upgrading the water supply and a new wastewater treatment plant and reticulation network.
Queenstown Lakes District Council $36 Million A new residential development at Kingston 950 houses Infrastructure for this project involves constructing new three water infrastructure including a bore water supply with a new treatment plant and associated network, a new wastewater treatment plant and associated collection network and a new stormwater network.
as above $16 Million A new residential development at Quails Rise South, Queenstown 900 Infrastructure for this project includes a water reservoir and supply mains, wastewater mains and stormwater mains, bus shelters, pedestrian/ cycleway underpass and an arterial road connecting to SH6.
QLDC – Ladies Mile

$24 million

 A new water reservoir and rising main, new wastewater rising mains and pump stations, stormwater mains, a roundabout on SH6, bus stops and a pedestrian and cycle underpass 1100 houses Long term transport issues, including pressure on SH6 are being addressed. Will support the Frankton commercial centre and build upon existing surrounding development

Auckland Northwest

 $339.2 million Wastewater mains and pump stations, stormwater management and arterial roading including bus and cycle lanes. 7770 houses in Redhills and Whenuapai 2.6% of Auckland’s UDC for the next 10 years. Provides framework for developers to connect local subdivision infrastructure. Supports the Westgate commercial centre. Frees up wastewater treatment capacity for growth in the south.

 

Remaining proposed projects

The remaining proposed project involves housing infrastructure for Te Tumu in Tauranga

This project is being considered by the Ministry of Business Innovation and Employment (MBIE) and the New Zealand Transport Agency (NZTA) following the submission of detailed business cases from those councils.

Purpose of the Fund

The purpose of the Housing Infrastructure Fund is to accelerate the short and medium-term supply of new housing where it’s needed most. It enables councils to invest up-front in the required infrastructure to ensure more housing can be built in a timely fashion.

Infrastructure, and it’s financing in particular, is one of the 3 key constraints to building more houses — along with land supply and consenting requirements. The Fund provides attractive financing terms to enable councils to build infrastructure now while they wait for income from future ratepayers and development contributions to repay the Crown.

The Fund will directly finance water infrastructure through an interest-free loans of up to 10 years. Transport infrastructure will be funded through a mix of loans and alterations to the Funding Assistance Rate subsidy provided to councils under the National Land Transport Fund.

Eligibility criteria

The eligibility criteria for the Fund were:

  • councils must have been part of a high-growth urban area as described in the National Policy Statement on Urban Development Capacity
  • projects were for new or upgraded trunk infrastructure in the form of transport, water supply, wastewater or stormwater infrastructure.
  • the infrastructure projects must support the building of new or additional dwellings
  • the funding sought for the proposals can only relate to the capital cost of building or procuring infrastructure.

Assessment criteria

The assessment criteria used to determine which of the projects received funding were:

  • the number of dwellings expected to be built as a result of the funded infrastructure as a proportion of total projected demand
  • the average infrastructure spend per dwelling expected to be built
  • the degree to which infrastructure construction will be brought forward
  • when houses served by the infrastructure are expected to be built
  • the degree of developer commitment or interest in building housing quickly
  • the extent to which the infrastructure also assists economic development or has other benefits
  • the timeframe within which councils will be able to reimburse the government
  • the extent to which councils have removed other barriers to development that the infrastructure will serve (for example, land is being rezoned)
  • the proportion of lower-cost houses enabled by the infrastructure to be funded
  • the degree to which infrastructure will help councils meet development capacity targets under the National Policy Statement on Urban Development Capacity.

Approval process

The approval process involved 2 stages.

The first stage was to shortlist preferred projects from the proposals submitted in May 2017. There were 14 proposals submitted by 5 councils, which were supported by indicative business cases. These were reviewed and assessed by independent technical assessors and the Independent Advisory Panel ('the Panel'). The Panel recommended 9 shortlisted projects to the Ministers of Housing, Infrastructure and Finance. The Ministers approved the projects and allocated the Fund ‘in principle’. These successful projects then advanced to the second stage.

In the second stage, successful councils prepared and submitted detailed business cases. The detailed business cases were required to confirm:

  • the infrastructure required
  • the costs
  • development timeframes, and
  • financial details.

With the assistance of MBIE and NZTA, The Panel recommended to the Minsters which projects were good investments. If the Ministers approved the projects the financial details in these business cases was the basis for loans and agreements to be prepared and signed.

Published: October 4, 2018

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