On Tuesday, the government finally announced that five councils would get a share of their $1 billion Housing Infrastructure Fund (HIF). This is the fund they announced a year ago, open to a handful of high-growth councils, to enable the building of some of the bulk infrastructure needed for new greenfield growth. While I appreciate it means that it frees up councils to fund infrastructure in brownfields areas, I can’t help but feel the government are only trying tilt the field against the councils (especially Auckland) to only encourage certain types of development.
The government talk about how this will see up to 60,000 houses built but of course, like initiatives like the Special Housing Areas, of which many have resulted in no houses, it is no guarantee that any houses will actually be built.
The successful proposals are in critical high growth areas including:
- Auckland Council – $300 million – 10,500 housesGreenfield development (North-west) at Whenuapai and Redhills.
- Hamilton City Council – $272 million – 8,100 housesGreenfield development (Peacockes) on southern edge of Hamilton.
- Waikato District Council – $37 million – 2,600 housesTe Kauwhata (new development on the shore of Lake Waikare).
- Tauranga City Council – $230 million – 35,000 housesGreenfield development at Te Tumu (eastern end of Papamoa) as well as a capacity upgrade to the Te Maunga Wastewater Treatment Plant and a new (Waiari) water treatment plant (at Te Puke).
- Queenstown Lakes District Council – $50 million – 3,200 housesTwo new greenfield sites (Quail Rise South and Ladies Mile) on the Frankton Flats and an extension of the Kingston township.
Some rough maps of the areas affected is here.
To me one of the more interesting ones is the Te Kauwhata development. The town only has around 600 houses right now so this is a massive increase. It will also result in another pearl on the string of 5-10k people towns right along the rail line between Auckland and Hamilton, further increasing the need for an intercity rail service.
Of course our main focus is on Auckland. Here’s what the government say about how it’s being used.
“The infrastructure funding will pay for five roading projects including a new bridge crossing to the West Harbour ferry terminal, three waste water projects and two stormwater projects.”
And here’s a map of what is being funded in Auckland. There’s certainly an element of PT wash going on by suggesting one of the roads is about connecting the road to the ferry terminal – something the council claim in their press release too. I’m also concerned there is as yet, no mention of the NW Busway. Getting that in, and extended past Westgate is going to be critical if people are going to have any hope of travelling anywhere in a reasonable time given how busy SH16 already is.
As for what it will deliver, the claim is that it will deliver 10,500 houses but it turns out most of that will still be 5-10 years away at best.
“More than 2,000 houses will be delivered in the first five years, with another 8,500 to be delivered in the following five years,” Dr Smith says.
What’s more is I don’t think this is the first time these houses have been announced by the government or council. Back when the government and council were dishing out Special Housing Areas, Redhills was one of the areas approved. It appears, on the surface at least, that the developer promised to build a lot of houses and now can only do so with a big chunk of government and council investment.
Hugh Green Ltd, the Westgate Joint Venture and Nuich Trust plan to develop a site at Redhills/Westgate (opposite the proposed Massey North Metropolitan Centre) into approximately 3,500 new sites and dwellings over 10 years.
Development of the 200ha area will commence from January 2017. The finished development will provide a mix of site sizes and housing types, matched to current shortages.
Set within a 600ha catchment area, the staged development over 25-30 years includes significant reserves and riparian areas, a projected new school and local centre.
The land is currently a combination of farmland, lifestyle properties and small business operators. It is zoned Future Urban under the Proposed Auckland Unitary Plan.
What is also noticeable about the announcement is that Auckland, which is expected to get around 50% of the country’s growth over the coming decades, is getting less than a third of investment. We also know that the city needs billions of investment in infrastructure, so the $300 million here is just a drop in the bucket. It appears that because the HIF is a loan and therefore is debt the council is incurring, if Auckland was to get more it would affect the council’s credit rating (along with the rating of all other councils). As such the government are now hinting at a separate package for Auckland which they’ll announced in coming weeks.
“Auckland has additional housing infrastructure projects it is seeking help with outside of the Housing Infrastructure Fund as it doesn’t have further debt capacity on its balance sheet,” Mr Joyce says. “Discussion on those options are continuing and the Government will have further to say on those matters in the weeks ahead.”
We’ll certainly look forward to seeing what the government announce.