$1b loan to councils for homes
The Government will loan five councils a cumulative $1 billion to build roading and water infrastructure to support up to 60,000 homes.
Auckland, Hamilton, and Tauranga are the big winners, receiving hundreds of millions of dollars of interest-free cash each. Queenstown and the wider Waikato region also had projects green-lit.
Up to 60,000 houses would be ‘‘brought forward’’ thanks to infrastructure being completed earlier than expected, in some cases by as much as eight years and in some cases by just two.
Prime Minister Bill English announced the successful bids at a press conference in Hamilton yesterday.
The funding was spread across nine proposals from five separate councils coping with high population growth. Those councils had made 16 proposals in total.
There was speculation that some councils could not take advantage of the scheme as they had tight debt limits to keep in mind.
Four projects which had a ‘‘high strategic fit’’ were not funded because of council balance sheet problems, and because the scheme was oversubscribed.
The Auckland Council will receive $300m to support up to 10,500 homes in greenfield developments at the Whenuapai and Red Hill areas in the northwest. This included five roading projects and five water projects.
The money would be loaned out between 2019 and 2027.
The Hamilton and Waikato councils will receive just over $300m to fund projects in southeast Hamilton and Te Kauwhata supporting more than 10,000 homes. The proposal includes building a new bridge over the Waikato River from Hillcrest to Peacocke.
Tauranga City Council will be loaned $230m to upgrade the Te Maunga wastewater treatment plant, build a new water treatment plant, and build roading and water infrastructure to a Greenfield development at Te Temu, at the eastern end of Papamoa. This would support a total of 35,000 homes.
Meanwhile, Queenstown Lakes District Council would receive $50m to support two new greenfield sites at Qual Rise and South and Ladies Mile in the Frankton Flats. This was expected to support 3500 homes.
The Housing Infrastructure Fund was announced in July 2016. An independent panel of experts considered the applications.
Building and Construction Minister Nick Smith said in May it was oversubscribed, with councils applying for $1.5b in loans.
Auckland was working with the Government to fund two other projects that their balance sheet could not take a loan for.
’’The first earthworks will be under way this coming summer, the first homes consented early in 2018 and homes completed by late 2018,’’ Smith said.
‘‘The announcements we made today are going to bring forward 60,000 houses, which is a huge number of houses. It will bring a lot of confidence to the market,’’ English said.
Most of the money was allocated with $112m left over for contingencies. The money must be paid back within 10 years.
Labour housing spokesman Phil Twyford said the announcement over-promised without enough detail on delivery.
‘‘Like the Special Housing Areas, this is a just a list of ghost houses from a Government that has made an art form out of promising houses but never building them.
‘‘Bill English and Nick Smith are attempting to pull a fast one. They’re claiming specific numbers of houses will be built, but they’re not actually providing funding for a single house.
‘‘This is loans for water infrastructure and bridges; National cannot point to a single plot of land and guarantee a house will be built there as a result.’’