- Hon Chris Bishop
The Government has made changes to build more homes on the outskirts of our cities, allocating $100 million to be lent to developers for housing infrastructure, as well as cutting the RMA red tape restricting land available for development, says Housing and Infrastructure Minister Chris Bishop.
"The government is committed to letting our cities grow up and out to address our housing crisis. Medium-sized greenfield developments play a crucial role in increasing supply, but without the right support, many projects risk being delayed or unable to progress," says Chris Bishop.
"The government's Going for Housing Growth and Resource Management Act reforms will be critical in addressing our housing crisis - but it will take time to legislate and then bed in. In the meantime, we don't have time to waste, so these immediate changes are necessary interim measures to help boost housing supply.
"The government's National Infrastructure Funding and Financing Agency (NIFFCo) has been developing a pipeline of potential important greenfield projects, and the initial transactions are expected to be drawn from this pipeline.
"Under this new model, which we are calling the Greenfield Model, NIFFCo will lend to an Infrastructure Funding and Finance Act Special Purpose Vehicle at a very competitive interest rate during the development phase of a project. Then, the debt will be refinanced to private markets once the development is complete. The funding will ultimately be repaid by future homeowners through an annual levy.
"The development phase of a project is often the riskiest, and private financiers reflect this by charging higher interest rates. NIFFCo's loan will provide lower cost financing to developers over the development period by charging approximately what private financiers would charge for completed developments.
"This support will bridge the financing gap and help ensure that new homes continue to be built in areas where they are needed most.
"Funding for the new 'Greenfield Model' comes from unallocated funding within NIFFCo. It will be able to recycle capital into new projects after the five- to seven-year development period.
"I am also announcing today that Cabinet has agreed to remove LUC-3 protections from the National Policy Statement on Highly Productive Land (NPS-HPL) this year, fulfilling National's election promise.
"The NPS-HPL protects our productive soils from development, ensuring New Zealand has a secure food supply. However, there needs to be a balance between how we protect our most productive land with our need for more housing to tackle our housing crisis.
"As currently drafted, the NPS-HPL protects a total of 15 percent of the country's landmass. Three classifications of soil are protected under the NPS-HPL, with two thirds being classified as LUC-3, the lowest quality.
"Across the country, this change has the potential to open up new land for greenfield housing roughly equivalent to the size of the Waikato region.
"To ensure we have got the balance between protecting our food supply and enabling more houses to be built, alongside this change we are going to consult on whether we should establish 'special agriculture zones'.
"These would essentially protect LUC 1, 2 and 3 land when it is grouped together in a natural configuration in key horticultural horticulture hubs like Horowhenua or Pukekohe.
"These are good, short-term and cost-effective interventions while we get the underlying system settings right to fix our housing crisis. They will both make it easier to bring new much needed housing projects to market that otherwise wouldn't have happened or would have happened much later."
Notes to Editors:
Background:
- The Infrastructure Funding and Finance Act (IFF Act) enables Special Purpose Vehicles (SPVs) to finance infrastructure by charging a levy to those who benefit from the infrastructure. NIFFCo provides equity and debt, raises necessary external debt finance, operates SPVs, and repays finance through levies collected through councils.
- The IFF Act has been successfully used for city-wide transport projects in Tauranga and a wastewater treatment plant in Wellington.
