Westpac NZ supports the Government's launch of its new Crown lending facility and loan guarantee scheme for Community Housing Providers (CHP), calling it an example of the policy innovation that is needed to boost the supply of social housing in New Zealand.
Westpac NZ Managing Director Institutional and Business Banking Reuben Tucker says CHPs have always played an important role in providing social housing, but their capacity to build has been held back by funding and financing constraints.
"We share the Government's vision of helping get more Kiwi families into good-quality housing. Based on the successes we've seen in Australia, today's $150m funding injection will certainly help make that a reality," Mr Tucker says.
"We also welcome the signal from the Government that it's working on a loan guarantee scheme as a means of reducing CHP lending costs.
"As a bank we are required to hold similar levels of capital for CHPs as we do for a commercial developer which increases costs and we think it's time for this to be reviewed.
"While the exact details are yet to be unveiled, a loan guarantee scheme should materially reduce CHP lending risks, which should flow into their costs of borrowing and help more social housing developments get off the ground.
"We know banks and the Government have an important role to play in supporting social and affordable housing outcomes, and for our part Westpac is committing to lend $1 billion to these sectors over the next three years.
"We encourage the Government to maintain its momentum and also focus on ownership options through the community housing sector, which needs to be scaled up to support families who earn too much to qualify for social housing but not enough to buy their own home outright.
"Research we commissioned last year shows that affordable shared home ownership options like shared equity and leasehold could help tens of thousands more New Zealanders into their own homes, but key policy barriers are preventing the sector from scaling up," Mr Tucker says.
"We've already helped finance more than 700 first home purchases through these innovative funding arrangements, and are keen to continue our leadership role in this area.
"We're confident that if the same innovative thinking was applied to the affordable housing sector as we've seen with today's announcement on social housing, we could help even more Kiwis into homes."
