$1b fund a fast-track fix


Queenstown has a big chance to accelerate new housing development, thanks to a $1 billion government fund, a prominent developer says.

Remarkables Park supremo Alastair Porter commends the government for thinking outside the square about ways to overcome obstacles to building new homes.

Prime Minister John Key, in announcing the fund at the National Party’s conference in Christchurch yesterday, says the government would borrow up to $1 billion to bring forward new roads, water and other infrastructure needed for new housing.

A one-off contestable fund will open later this year to applications from councils in high-growth areas such as Auckland, Queenstown, Christchurch, Tauranga and Hamilton.

The government is also considering establishing Urban Development Authorities to help speed up the supply of new housing.

The authorities would have streamlined powers to override barriers to large-scale development, including potentially taking responsibility for planning and consenting.

The government has not ruled out including in those powers the use of the Public Works Act to take land from an owner who resists development.

Porter says the authorities could push ahead development now constrained by councils’ narrow interpretation of the Resource Management Act.

“I know councils don’t intend to be a hindrance, but their interpretation of the RMA is very cautious and results in enormous hold-ups to development.”

The authorities should not to be given “carte blanche to run roughshod over land”, but be subject to appropriate constraints.

While the council needs to look at opportunities for new roading, water and sewerage projects, there is limited scope for new roads.

The council is already committed to the eastern arterial road in Frankton, while upgrading the resort’s worst bottleneck, Frankton Rd, would be “extremely difficult and expensive”, Porter says.

Instead, he urged the council to talk to the resort’s developers about ways to reduce congestion on existing roads, such as park and ride facilities, shared car-pooling, public bikes and passenger ferries.

Queenstown Lakes Mayor Vanessa van Uden says the council would consider how to take full advantage of the new fund.

“We will certainly be right in there looking for projects that match the criteria when they’re given to us,” Van Uden says.

Although it could enable new housing projects desperately needed by the community, there is a tension between the council’s roles of facilitating urban development and protecting the environment, she says.

Apart from a “heads-up” about the announcement two days ago, she had not been part of any discussion with the government about the fund.

Finance Minister Bill English says the government would invest up to $1 billion up front, but councils would have to repay the money within 10 years or buy back the infrastructure assets once new houses were built and development contributions had been paid.

Infrastructure and its financing is one of the three key constraints to building more houses, alongside land supply and consent requirements, English says.

“Councils have strict debt limits, which means some lack the headroom to invest in infrastructure now and then wait for future development contributions to recover the costs.

“The fund will help provide more infrastructure sooner, by aligning the cost to councils with the timing of revenue from development contributions.”

Building and Housing Minister Nick Smith says the fund would be available only for new infrastructure that supported more housing, not to replace existing infrastructure.

To access the fund, councils would have to outline how many new houses would be built, where they would be built and when they would be completed.

There could be other conditions, such as faster processing of resource consents, Smith says.

Otago Daily Times