The Government will have to borrow the $1bn for its contestable fund, which would increase net debt until it is repaid – that is expected to take 10 years. Councils will also be expected to repay the funding they receive “over time or as development occurs”.
The fund would only be available for “substantial new infrastructure investments” that support new housing – not to replace existing infrastructure.
Building and Housing Minister Nick Smith said the government was also considering creating Urban Development Authorities (UDAs) to help boost the supply of new housing.
They would have streamlined powers to override barriers to large-scale development, including potentially taking responsibility for planning and consenting, and other powers.
Mr Key told delegates while the government was already doing a great deal to try to increase housing supply, some councils have strict debt limits that prevent them from investing in the necessary infrastructure.
Green Party co-leader James Shaw said the move was not enough to create the kind of affordable housing that New Zealand needed right now.
“It’s not focused on actual investment in houses, it’s just focused on the roads to get between those houses.
“What that means is that it’s basically a subsidy for developers, so there’s no assurance, and John Key did not mention the idea of affordable homes at all.”
