Property Council New Zealand (PCNZ) has welcomed the Government’s recent announcement of a Crown company to invest in housing infrastructure.
“The Property Council has long called for adequate funding tools, and at last the Crown gives us a useful solution to address New Zealand’s housing crisis,” PCNZ chief executive Connal Townsend says.
“We have a severe lack of housing. If we continue along this path, you will see more homelessness.
“The development community is ready to respond to the urgent need for more housing. The handbrake has been a lack of infrastructure such as roading, water and sewerage that supports development.
“Building cities costs a lot of money, and infrastructure is a large proportion of that cost.”
“The $1 billion Housing Infrastructure Fund, whilst a great initiative, does not address how some councils, who are ruled by strict debt ratios, would be able to carry that debt on their balance sheet.”
Mr Townsend believes this move by the Government to co-invest $600 million alongside local councils and private investors in network infrastructure for housing development will finally start to remove the handbrake.
“The traditional way we have funded growth in our cities is way out of date, and cannot deliver the infrastructure and housing we need.
“By setting up a Crown company, the Crown retains the legal ownership of the debt, thus allowing councils to access the fund and get much needed infrastructure built.
“This has enormous potential, provided councils also partner with the development community.”
A government initiative to allow public and private investment in critically needed infrastructure is a significant step forward for the country.
Meanwhile, the Employers and Manufacturers Association (EMA) says the re-purposing of Crown Fibre Holdings into Crown Infrastructure Partners and its co-investing of $600m to fund road and water infrastructure for housing developments goes some way to addressing particular concerns raised by the EMA.
“We have been pushing the need to look at different models to remedy our national infrastructure shortfall, and we see this announcement as a clear win in this regard,” EMA chief executive Kim Campbell says.
The crown company will use the experience and skills gained in the fibre rollout to attract private investment in infrastructure necessary to open up large tracts of land for housing development.
This will alleviate pressure on cash-strapped councils which are struggling to fund new long-term infrastructure.
“This is targeted at enabling much needed housing development by resolving infrastructure shortfalls in the sector, although $600m will not go far,” Mr Campbell says.
“However, we are more interested in how this model will be used to address broader infrastructure investment issues.”