KiwiBuild processing is behind schedule

AUCKLAND: The processing of potential KiwiBuild developments is taking longer than the Government hoped.

Almost 100 developers put forward plans for KiwiBuild developments two months ago.

Some developers said they are well under way with discussions; however, others say they have yet to be contacted.

Initially the Government aimed to have at least 1000 affordable homes built by the end of June 2019, with 80% funded and built by the private sector.

The KiwiBuild Buying off the Plans approach was the first tender pitch for the Government’s flagship programme.

Under the tender, developers would be in charge of their own project, including funding it, and the Government would underwrite it.

The idea, according to the Ministry of Business, Innovation and Employment (MBIE), would be to give some certainty to developers, who were often required to sell a certain proportion based on the plans to secure funding for the build.

The Government’s underwrite would involve buying units the developer couldn’t find buyers for or entering into an agreement to buy all completed units and onselling them.

The timeline in the tender document told developers that site visits, interviews, and presentations would get under way for those shortlisted by July 2.

Announcements of successful proposals are expected to start this month, subject on negotiations.

This week the KiwiBuild Unit said of the 97 development proposals, 32 were under negotiation.

So far 10 had failed to meet the criteria, leaving 55 proposals still being evaluated.

The unit is aiming to engage with all of them by the end of August, it said in a statement.

‘‘KiwiBuild acknowledges that the evaluation and duediligence process has taken longer than we’d initially hoped,’’ it said.

‘‘The evaluation process is comprehensive and necessarily robust to ensure we achieve the best possible outcomes. In some cases, developers are being asked to provide additional information.’’

Several developers said they had not heard anything since putting their ideas forward two months ago.

One faced losing the land they hoped to build on as they could no longer extend their land purchase agreement, which was contingent on a KiwiBuild development contract going ahead.

Another said it raised concerns around the Government’s time frame and said if the Government wanted to ramp up building and meet their targets, they were going to have to get on to it.

Industry commentator Leonie Freeman said while it was promising to hear some were progressing, she also knew some developers hadn’t heard anything yet. — RNZ