18 November 2022
Craig Innes
[FYI request #17425 email]
Our reference: HUD2022-000043
Dear Mr Innes
Official Information Act Request for Cabinet Paper: Advancing the housing supply
and affordability package
The Ombudsman has advised us of your most recent complaint regarding Te Tūāpapa Kura
Kāinga - Ministry of Housing and Urban Development’s (the Ministry’s) responses to your
Of icial Information Act 1982 (the Act) request in relation to the
Advancing the housing supply
and affordability package Cabinet paper (the Cabinet Paper).
In light of your initial complaint, we reviewed our response and released previously withheld
information on 22 July 2022. Some information continued to be withheld under section
9(2)(f)(iv) of the Act (to maintain the constitutional conventions for the time being which protect
confidentiality of advice tendered by officials) and section 9(2)(j) of the Act (to enable a Minister
of the Crown or any public service agency or organisation holding the information to carry on,
without prejudice or disadvantage, negotiations (including commercial and industrial
negotiations).
You have made a second complaint to the Ombudsman regarding the Ministry’s decision of
22 July which was received by the Ministry on 20 October 2022. The Ministry has subsequently
reviewed again the previously redacted information within the Cabinet Paper. Due to the
passage of time since July, we have determined that there is no longer good reason to withhold
most of the previously withheld passages.
However, in our view there remains good reason to withhold paragraphs 92 and 151 under
section 9(2)(j) of the Act, and these reasons are not outweighed by the public interest in
making the information available. The Ministry is in the process of providing to the
Ombudsman an explanation for continuing to withhold these paragraphs. We note that the
matter is still actively being investigated and the Ombudsman will provide you with a further
update as soon as possible.
In the meantime, we attach the Cabinet Paper with the changed redactions.
Yours sincerely
Jenny Cassie
Chief Legal Advisor
S E N S I T I V E
IN CONFIDENCE
Office of the Minister of Housing
Office of the Associate Minister of Housing (Māori Housing)
Cabinet
Advancing the housing supply and affordability package
Proposal
1
This paper reports back on supply-side initiatives agreed to by Cabinet in
March to increase housing supply and improve affordability for first home
buyers and renters [CAB-21-SUB-0045, CAB-21-MIN-0070 and CAB-21-MIN-
0061 refers].
2
The paper’s primary purpose is to report back on the Housing Acceleration
Fund, and seek agreement to the design of the Infrastructure Fund (the key
component of the Housing Acceleration Fund).
3
It also provides updates on:
3.1
the additional funding for the Land for Housing Programme (which will
be provided through the Housing Acceleration Fund);
3.2
the Kāinga Ora Land Programme, including the scope of further design
and implementation decisions to be made by the Ministers of Finance
under the Official
and Housing; and
3.3
the refocused Residential Development Response Fund, to be called
the Affordable Housing Fund.
Relation to government priorities
4
Our Government has three overarching objectives; to keep New Zealanders
safe from COVID-19, to accelerate our recovery, and lay the foundations for a
better future, through reducing inequality and addressing child poverty,
reducing carbon emissions and improving housing affordability [CAB-20-MIN-
Released
Information Act 1982
0525].
Executive Summary
5
With New Zealanders facing unsustainable house price increases, while rents
are also increasing, this Government recently announced a suite of demand
and supply-side measures to address housing affordability, support first home
buyers and better incentivise investment in new homes [CAB-21-SUB-0045,
CAB-21-MIN-0070 and CAB-21-MIN-0061 refers].
6
The central component of our supply-side response is the $3.8 billion Housing
Acceleration Fund, which both establishes an Infrastructure Fund ($3.73
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billion) to unlock a mix of private-sector and government-led developments
and provides $50 million of additional funding for the Land for Housing
Programme. This is complemented by a Kāinga Ora Land Programme for
strategic land purchases, and a refocused $350 million Residential
Development Response Fund (to be called the Affordable Housing Fund).
7
Cabinet sought a report back on the design of the Infrastructure Fund [CAB-
21-MIN-0061 refers], which this paper fulfils.
8
We are proposing that the Infrastructure Fund has the following three
components:
8.1
Kāinga Ora large scale projects – with funding used to maintain
momentum and enable a step-change in housing delivery for Kāinga
Ora’s six large scale projects in Auckland and Porirua;
8.2
a competitive fund – to support projects from around the country which
have infrastructure constraints and are facing the biggest housing
supply and affordability issues;
8.3
infrastructure for Māori housing – to enable Māori-led investments in
infrastructure for Māori housing outcomes.
9
We are seeking Cabinet’s agreement:
9.1
to the approach for the first tranche of the funding for the Kāinga Ora
large scale projects;
9.2
to the design parameters for the competitive component of the
under the Official
Infrastructure Fund; and
9.3
to the high-level settings for the recently agreed $350 million Māori
Infrastructure Fund [CAB-21-MIN 0173 refers].
10
Given the pressing nature of our housing issues, it is important that the
Infrastructure Fund is up and running as soon as possible. It is my expectation
that the competitive component of the Infrastructure Fund will be open for
expressions of interest from interested parties by July this year.
Information Act 1982
11
The additional funding for the Land for Housing Programme, the Kāinga Ora
Released
Land Programme and the Affordable Housing Fund also form a very important
part of our supply-side response. This paper provides updates on those
initiatives.
Background
12
Access to affordable housing is one of New Zealand’s persistent long-term
challenges, and these issues have been amplified in recent months. We are
currently facing unsustainable house price growth, with rents also increasing.
Lower income households are facing increasing challenges to obtain
affordable and appropriate long-term rental housing. As a result, the public
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housing register is continuing to increase and there is high demand for
emergency housing.
13
One of the key structural reasons for increasing house prices is that not
enough houses are being built in the places they are needed. Those that are
being built are not at prices that low- to moderate-income households can
afford (whether for rent or home ownership). We’re not seeing the volume or
kind of supply we need for a number of reasons including limited access to
land for development, inadequate infrastructure capacity, and the fact that in
many places it is not financially viable to build houses – whether for rent or
home ownership – at prices that people can afford.
14
In March, Cabinet agreed to a suite of demand and supply-side measures to
address housing affordability, support first home buyers and better incentivise
investment in new homes [CAB-21-SUB-0045, CAB-21-MIN-0070 and CAB-
21-MIN-0061 refers].
15
To increase the pace and scale of housing supply, and increase the number
of homes that are affordable for low- to moderate-income households to own
or rent, Cabinet agreed [CAB-21-MIN-0061 refers] to establish a Housing
Acceleration Fund, which will:
15.1 create an Infrastructure Fund to provide infrastructure to unlock land for
housing developments, including existing large scale projects, and
directly overcome funding and financing constraints faced by councils
and other infrastructure providers;
15.2 provide additional funding for the Land for Housing Programme to
under the Official
speed up development on vacant or underutilised Crown-owned land,
operate in more regions, and deliver a broader range of affordable
housing options for rental and home ownership; and
15.3 establish a Kāinga Ora Land programme for strategic purchases to
increase the pace, scale and mix of housing developments, including
more affordable housing. In the associated public communications
material, the Kāinga Ora Land programme was announced as a
separate programme, and is now considered as being complementary
to the Housing Acceleration Fund.
Released
Information Act 1982
16
Subsequently, Cabinet agreed to commit $3.8 billion to the Housing
Acceleration Fund, with approximately $3.75 billion for the Infrastructure
Fund1, and $50 million of additional funding for the Land for Housing
Programme [CAB-21-MIN-0016.15 refers]. The Kāinga Ora Land Programme
will be financed through an additional $2 billion of Kāinga Ora borrowing for
land acquisition and development, complemented by $46 million per annum of
1 This includes $21 million of staffing costs to monitor and implement the package.
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operating funding to be provided through Budget 2021 [CAB-MIN-0116.15
refers].2
17
Cabinet sought a report back on the design parameters for the Infrastructure
Fund, including on alignment with existing infrastructure processes (in
particular three waters and transport) and ongoing collective ministerial
oversight across alignment with the Treasury, Ministry of Transport, Waka
Kotahi New Zealand Transport Agency, Department of Internal Affairs and
Kāinga Ora [CAB-21-MIN-0061 refers].
18
This paper contains that report back. It also provides updates on
complementary supply-side initiatives including additional funding for the Land
for Housing Programme, the Kāinga Ora Land Programme and the refocused
Residential Development Response Fund, which we now propose to call the
Affordable Housing Fund to more accurately identify its refocussed purpose.
19
In relation to the Government’s supply package, Cabinet also sought a report
back on how the government can further support increased delivery of high-
quality rentals at both market and subsidised rent, including the impact of the
Overseas Investment Act and tax treatment [CAB-21-MIN-0061 refers]. The
Minister of Housing intends to come back to Cabinet in the middle of the year
to provide the report back on how we can further support purpose-built
rentals.
The Infrastructure Fund
20
Decades of underinvestment in infrastructure has contributed to limiting both
the amount of land that can be used for residential development, and the
under the Official
density at which that land may be developed.
21
The Infrastructure Fund (the Fund) forms the key component of the Housing
Acceleration Fund. It is intended to directly overcome funding and financing
constraints faced by councils and other infrastructure providers to support the
provision of infrastructure that unlocks housing development in the short- to
medium-term.
22
The key purpose of the Infrastructure Fund is to increase the supply of build
ready land. To the extent possible, we also want to ensure that it:
Released
Information Act 1982
22.1 increases the pace, scale and density of housing development;
22.2 increases the proportion of homes that are affordable for low- to
moderate-income households (whether to rent or own); and
22.3 supports good access to public transport, jobs, education and
amenities.
2 This operating funding will be used to service the Kāinga Ora borrowing, meet holdings costs, allow for
development risks and expense any land value write-downs (e.g. as a means of subsidising non-market housing
outcomes).
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23
We want to secure the greatest impact from this Fund by prioritising those
locations that have infrastructure constraints and are facing the biggest
housing supply and affordability issues, while also ensuring that there is an
ability for quality projects from anywhere in New Zealand to receive funding.
24
This Fund will complement, rather than displace, private (e.g. via the
Infrastructure Funding and Financing (IFF) Act) and local government
infrastructure investment. We are also expecting that local councils will play
their part by opening up land and enabling intensification, particularly through
implementation of the National Policy Statement on Urban Development.
25
Given the significant and pressing housing challenges that currently exist in
our communities, we want to move quickly with some of the investment
decisions for well understood and well validated projects through this Fund.
26
However, we will need to take longer in other cases so that we can achieve
better value for money, secure complementary actions from local councils and
other players, and create a pipeline for the construction sector that ramps up
sustainably.
27
In particular, we need to ensure we are directing infrastructure funding to
where we have the highest confidence in the ability of homes to be built. To
do this, we will work with those, including local government, developers and
mana whenua that have a shared ambition for momentum in making housing
more available.
28
The design parameters for the Fund set out in this paper reflect and balance
what we want this Fund to achieve.
under the Official
29
It is important that this Fund complements other central Government
investment in infrastructure. Some specific approaches to alignment are
discussed with respect to the components of the Fund below. Additionally, we
intend to work closely with the Minister of Local Government and the Minister
of Transport as we progress this initiative.
30
We also intend that the Urban Development Ministers group include relevant
progress as part of the Housing Acceleration Fund as part of their tracking of
progress within Urban Growth Partnerships.
Released
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Objective for the Infrastructure Fund
31
We propose that Infrastructure Fund has the following objective:
31.1 The purpose of the Infrastructure Fund is to invest in infrastructure that
unlocks housing development. This infrastructure investment will:
31.1.1
enable brownfield intensification and greenfield expansion in
locations with access to amenity and opportunity;
31.1.2
be limited to investments that would not otherwise be funded,
or not funded fast enough to meet demand for housing;
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31.1.3
maximise value for money including through co-funding,
contributions, and commitments from local government and
third parties;
31.1.4
enable the building of homes that are affordable for low-to
moderate- income households;
31.1.5
incentivise councils to use non-funding levers that enable
housing development;
31.1.6
create a pipeline of investment including near-term and
medium-term activity that ramps up sustainably to allow the
construction sector to steadily increase its capacity and
absorb the investment without price escalation;
31.1.7
align with wider government objectives, such as ensuring
good urban form, partnerships with iwi and Māori, and the
transition to a net-zero emissions economy; and
31.1.8
be spread across multiple regions and include both large
urban areas and regional centres.
Investment Criteria
32
To ensure that we invest in projects that best meet the Fund’s objective, we
propose that potential investments are evaluated against the following criteria
(each of which include weighting and a set of key factors for assessment) in
the table below.
under the Official
33
Where investment includes complementary actions the local authority,
developers commit to (e.g. planning changes), or that central Government is
able to make alongside the investment, these would be accounted for in the
assessment, particularly under the ‘housing benefits’ criterion.
Criteria
Key factors to be assessed
Housing benefits
•
The number of additional dwellings that the funding will enable
of the proposal
relative to demand in that area.
(40%) – How will
the proposals, if
•
The proportion of lower-cost houses expected to be enabled by
Released
Information Act 1982
delivered,
the infrastructure (primarily informed by typology of housing
contribute to the
expected to be built).3
housing outcomes
•
The extent to which the location where housing will be enabled
that are the
has unmet demand and provides access to amenity and
purpose of the
opportunity.
Fund?
•
The extent to which the infrastructure supports intensification, in
particular that required to be enabled by councils under the
National Policy Statement on Urban Development (i.e. typology
and density).
3 Where there is an agreed spatial plan for the areas developed through the Urban Growth Partnerships, this is to
be used to guide assessment of this factor.
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•
The extent to which the proposal supports housing development
on land owned by Māori and to which mana whenua have been
involved in developing the proposed solution.
•
The extent to which the proposal supports housing development
that is environmentally sustainable including through reduced
private vehicle use, lower risks from climate change (such as
coastal inundation), and supporting water quality and
biodiversity.
Impact of funding
•
The impact that this funding will have on the housing
(additionality)
development advancing, or on the pace and scale at which it will
(20%) –
How
advance compared to what is currently expected.
critical is this
funding to
•
Demonstration that other means to fund the infrastructure
advancing the
without displacement of investment elsewhere (i.e. rate rises,
infrastructure and
prudent borrowing, or use of the IFF framework) have been
housing
exhausted.
development?
Cost and co-
•
The average whole-of-government cost per dwelling expected to
funding (20%) –
be enabled by the infrastructure.
How cost effective
is the proposal and
•
Alignment with co-funding principles for the Fund (set out below).
is everyone paying
their fair share?
Capability and
•
The extent to which there are other barriers to housing
readiness (20%) –
development that the infrastructure will serve (and how they will
If funding is
be removed if funding is approved).
approved, how
certain is it that the
•
The degree of developer commitment or interest in building
project will
housing quickly.
advance, and at
under the Official
•
Demonstrated alignment between all parties including Territorial
what pace?
Authorities, Regional Councils, mana whenua and developers
needed to advance the housing development.
•
Confidence in the ability of all parties to deliver the infrastructure
and housing as proposed.
34
We propose that there be three components to the Infrastructure Fund (with
the following indicative funding), each discussed below:
34.1 Kainga Ora Large Scale Projects ($2.3 billion)
Released
Information Act 1982
34.2 Contestable fund ($1.08 billion)
34.3 Infrastructure for Māori housing ($350 million).
35
All three components will have regard to the investment criteria, but will
operate within different processes in applying these.
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Infrastructure Fund Component 1: Large scale projects
36
We are seeking to use the Infrastructure Fund to accelerate the pace and
scale of housing delivery for Kāinga Ora’s six large scale projects (five in
Auckland – Mount Roskill, Mangere, Tāmaki, Oranga and Northcote, and one
in Porirua).
Kāinga Ora is uniquely placed to deliver a step-change in housing and well-being
outcomes
37
Kāinga Ora, as the Government’s urban development delivery agency, has a
unique opportunity through these projects to accelerate the pace and scale of
housing delivery and significantly improve well-being outcomes in areas of
most need. Large scale projects are the Government’s best bet for delivering
accelerated housing outcomes. No other agency or council in New Zealand is
set up to manage the scale and pace of development proposed.
Good alignment with objectives and criteria for the Infrastructure Fund
38
The large scale projects have a natural alignment with the objectives and
criteria for the Infrastructure Fund proposed above. Specifically, large scale
projects:
38.1 Will contribute significantly to housing outcomes. With funding certainty
over the next five years, the large scale projects are expected to
provide build-ready land that will enable the delivery of 14,000 new
under the Official
additional homes and 4,000 replacement public homes on Kāinga Ora
land over the next five to ten years. The additional infrastructure
capacity provided by the funding has the potential to unlock a further
11,000 homes on surrounding privately owned land.
38.2 Are ‘shovel-ready.’ The projects are underway and the key
infrastructure projects needed for delivery in the early years are well
understood and agreed by both councils and Kāinga Ora.
38.3 Require additional central Government funding to advance. Technical
assessments by Kāinga Ora have uncovered significant additional
Released
Information Act 1982
water, transport infrastructure and land development costs constraining
progress. Without further funding, the large scale projects will stall or
need to be significantly rescoped beyond June 2021.
38.4 Will enable the Government to increase the pace and scale of housing
development in areas of high social need. Large scale projects are
located in areas where existing public homes are reaching the end of
their useful lives in communities experiencing high levels of social
deprivation. These are significant urban regeneration projects which
will improve outcomes in deprived neighbourhoods and provide
opportunities for intensification in strategically important areas of
Auckland and Porirua.
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39
It is important to note that the funding envelope required to progress large
scale projects includes land remediation costs, community infrastructure costs
and costs incurred to date by Kāinga Ora to maintain momentum. These costs
will be considered through the business case process for each large scale
project (described below). A more detailed assessment of the Auckland-based
large scale projects against the investment criteria is provided as Annex One,
further demonstrating the strong alignment with those criteria.
Expectation of council contributions
40
While some contributions could be forthcoming from councils, initial
discussions with councils on their draft Long-Term Plans and transport
funding plans confirm that the likelihood of contributions within the five-year
period of the Infrastructure Fund is likely to be low.
41
Porirua City Council included approximately $30 million in their draft Long-
Term Plan to support Porirua east, as part of a wider investment strategy to
address significant three waters infrastructure issues facing the city. The
proposed Council contribution for Porirua east is largely based on the
expectation that the Crown will fund a significant portion of their share of the
infrastructure costs.
42
For Auckland, based on recent discussions at the official level, the
contribution within the first five years is expected to be between $150 - $250
million, due to reduced revenue from Covid impacts and issues with their debt
limit over the next three years. The Auckland draft Long-Term Plan
foreshadows up to $733 million over ten years (including transport funding),
however due to existing commitments and pressures, the majority of funding
under the Official
is not expected to be available until the latter part of the decade.
43
Discussions are ongoing with Auckland and Porirua City councils. This
includes wider discussion with the Auckland Mayor (alongside other relevant
Ministers) about possible ways to more effectively deliver infrastructure and
housing outcomes for Auckland across various central and local government
programmes and planning instruments.
44
In order to provide certainty and accelerate the delivery of houses, funding for
large scale projects has been ring fenced to an amount up to $2.3 billion, with
tranche funding to enable Ministers to make decisions about large drawdowns
Released
Information Act 1982
[CAB-21-MIN-0116.15 refers].
Critical need for funding certainty to maintain momentum
45
Large scale projects are complex projects with multiple operational and
funding processes and interdependencies.
46
Large scale projects require significant infrastructure upgrades at both the
precinct (network) and neighbourhood level, which have multiple
dependencies and can take time to plan and deliver. A neighbourhood
infrastructure plan takes a minimum of 12 months to develop and a further six
months to consent.
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47
Individual projects often have multiple dependencies and require significant
pre-work before housing delivery can occur. For example, the Tararata Creek
stormwater project in Mangere (a $230 million project) requires three years of
modelling, design and consenting work, and three years to build and deliver
the infrastructure. The project requires careful coordination with Auckland
Council and Auckland Transport on park upgrades and active travel
connections. All components need to be in place or agreed to before Kāinga
Ora can start constructing new dwellings from year four.
48
To manage these challenges and deliver efficiently, large scale projects have
been designed on a programme basis. Funding certainty over five years
enables Kāinga Ora and councils to not only plan in accordance with the
programme but enables the Kāinga Ora board to make financial commitments
in reliance that the funding will be made available. Funding certainty is also
required to deliver on expectations, including land remediation work to enable
build-ready land for the 14,000 new additional homes and 4,000 replacement
public homes on Kāinga Ora land.
49
The construction sector also requires pipeline certainty to upskill and scale
up operations to deliver the programme over the ten years, noting that funding
is for five years, but build out is for ten years. The large scale projects aim to
deliver 2,000 houses per annum between 2024 and 2029. This pace equates
to about 15 percent of the average annual total number of residential
consents in Auckland over the last five years.
50
Furthermore, any scaling will slow delivery and would likely trigger the need to
re-sequence projects, which is critical to achieving multiple outcomes for the
community. The current programme is highly integrated and designed to
under the Official
maximise leverage and make the most of win-win situations.
Tranche one funding – proposed approach to allocation
51
In line with previous Cabinet advice, and following further advice from officials,
the Minister of Finance and myself will be deciding on the first tranche of
funding in June 2021 to ensure development continues with large scale
projects.
52
My expectations are that the first tranche of funding comprises up to $440
million and focuses on key infrastructure projects and land development work
Released
Information Act 1982
needed to maintain momentum, covering:
52.1 funding for design, infrastructure and land remediation work incurred
since April 2021 and forecast to June 2022 (up to $375 million)
52.2 a broader funding commitment for Eastern Porirua to deliver key
precinct wide trunk water infrastructure currently subject to the fast-
track consenting application ($65 million).
53
The first tranche will include some costs that would ordinarily be funded by
Auckland and Porirua City councils. Should any council funding emerge in
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the interim, this will be allocated as co-funding and not drawn down from the
Infrastructure Fund.
Further funding decisions
54
We propose that Cabinet decide on funding for each large scale project (five
in Auckland – Mount Roskill, Mangere, Tāmaki, Oranga and Northcote, and
one in Porirua) individually through programme business cases. The
programme business cases will consider funding against the objectives and
criteria of the Infrastructure Fund. The programme business cases will also
set out how the investment will accelerate housing outcomes.
55
Given the need for funding certainty, we propose that funding approvals for
large scale projects occur within the first year of the fund. Once agreed by
Cabinet, large scale projects can be managed as a portfolio in order to
maintain efficiencies across projects and ensure Government commitments
are delivered. Further work is also required around the process for drawdown,
monitoring and reporting, and we propose to report back to Cabinet on these
matters in December 2021.
Seeking agreement to a five-year funding envelope for Porirua
56
Further to this, we are seeking agreement to $307 million (of the $2.3 billion)
being set aside for the Porirua large scale project to ensure certainty of
funding for the RMA fast-track consent and to help manage relationship risks.
This is the five-year scaled-back funding amount for Porirua, and is the
absolute minimum required to retain momentum.
under the Official
57
The Porirua large scale project has unique partnership and governance
arrangements in place with Ngāti Toa, Porirua City Council and the Te Pae
community advisory panel. Setting aside this level of funding will allow for
flexibility in announcement and negotiations with these strategic partners. This
approach also provides flexibility to take account of potential council
contributions, while giving certainty to Kāinga Ora to plan their developments
in accordance with expected outcomes.
Infrastructure Fund Component 2: Infrastructure Acceleration Fund
(Competitive Fund)
Released
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58
To support investment in a wider range of projects throughout New Zealand
that can contribute to the objectives of the Infrastructure Fund, we propose
that a competitive fund be the second component with indicative funding of
$1.08 billion.
59
The competitive fund will be operated as a distinct public-facing initiative, and
therefore requires distinct branding. We propose to name the initiative the
Infrastructure Acceleration Fund.
60
Outside of the large scale projects, a contestable process is best suited to
identifying and selecting most projects. Demand for this fund will almost
certainly exceed what is available at this time and it’s important that we have
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a clear process with proposals evaluated on a common basis. Nevertheless,
given the complexity of the investments, negotiation will still play a large role.
61
We considered identifying specific maximum funding envelopes at the outset
to ensure regional spread, but don’t consider this the right approach. We do
not consider that we would have a sufficiently sound basis for identifying
envelopes and the loss of competitive pressure would significantly reduce our
ability to negotiate for the best housing outcomes.
62
In order to get greatest value for money from this investment, we propose that
funding may be provided across multiple funding rounds if an insufficient
number of high-quality proposals are identified in the initial round.
63
We are not proposing specific priority areas for the contestable fund. The
proposed criteria and evaluation approach reflect the different needs and
intended impact of investment across the country. For example, in the main
centres, our investment is likely to be targeted to projects that bring forward
spending and increase the supply of build ready land. The impact will come
through sustaining growth in construction activity.
64
In many regions, such as Gisborne and Rotorua, the limited expectations of
population growth until quite recently means there is limited available growth
capacity. To catch up with past and anticipated growth many are proposing
significant increases in renewals and growth capacity. In these locations the
Infrastructure Fund could unlock specific projects and bring forward needed
investment in network capacity.
Eligible projects and expenditure
under the Official
65
Given the overriding purpose of this Fund is to unlock housing development,
it’s important that that the funding focuses on infrastructure projects that are
genuinely critical for enabling housing development and addresses the critical
local government funding gap.
66
On that basis, we are proposing the scope of eligible projects for the
competitive fund be limited to:
66.1 new or upgraded enabling infrastructure in the form of transport
(including local roading, state highways, public transport infrastructure,
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footpaths and cycleways), three waters (water supply, wastewater and
stormwater) and flood-management infrastructure; and
66.2 which are wholly or primarily for the purpose of enabling the building of
new or additional dwellings in the short- to medium-term; and
66.3 which are expected to enable at least:
66.3.1
200 additional dwellings in tier one urban environments
(under the National Policy Statement on Urban Development)
66.3.2
100 additional dwellings in tier two urban environments (under
the National Policy Statement on Urban Development)
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66.3.3
30 additional dwellings elsewhere.
67
Infrastructure investments that have purposes beyond supporting housing
development (e.g. commercial development or improved resilience) are
eligible, but funding could only be sought for proportion of the project
reasonably attributable to enabling housing development.
68
We do not propose that energy transmission infrastructure,
telecommunications infrastructure, and social infrastructure (such as libraries,
parks or recreation facilities) be eligible for funding. While transmission and
telecommunications infrastructure can be essential to enabling some new
development, they are funded by utility companies and do not face the same
financial constraints. We acknowledge that social infrastructure is important to
providing amenity in areas of development. However, it does not represent as
critical a factor as the proposed eligible infrastructure set out above4.
69
The funding provided through this Fund should be limited to one-off costs
necessary to enable the types of projects set out above, rather than funding
ongoing, business-as-usual activities. We are therefore proposing that the
eligible costs include:
69.1 costs of feasibility studies and other early-stage development work5;
69.2 costs of designing, consenting, tendering and acquiring land (where it
is wholly required for eligible infrastructure projects);
69.3 constructing eligible infrastructure projects; and
under the Official
69.4 in limited situations, non-capital administrative costs where these are
necessary to establishing complementary financing.
Applicants for the competitive fund
70
We propose that, in most cases, Territorial Authorities (TAs) be the lead
applicants for funding because TAs:
70.1 are typically best placed to bring together multiple parties (for example,
iwi and developers) on specific potential infrastructure investments;
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70.2 hold most of the critical planning levers (for example, opening up or re-
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zoning of land) that are needed to align with infrastructure investment
in order for developments to proceed at pace; and
70.3 will, in most cases, be the ultimate owners of assets created by this
Fund.
71
It is my expectation that TAs will work with all relevant parties, including
developers and Regional Councils when applying for funding. We also expect
4 Additionally, in recent years, the Government has made very significant investments in social infrastructure,
particularly through the Provincial Growth Fund and Shovel Ready Projects.
5 This is not intended to be a significant proportion of funding, but may be a small component of larger projects.
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that TAs will respect their statutory obligations for engaging and working with
Māori when submitting proposals.
72
We are also proposing, however, that iwi and developers (which includes
Community Housing Providers) have an ability to apply directly to the Fund
(with more detail about how they can do this set out below) for projects that
fall within the scope of eligible projects set out above. In the case of iwi, this is
to recognise that they are Treaty partners and have a direct relationship with
the Crown.
73
For developers more broadly, it will provide a pathway to advance
developments which would align closely with central government housing
objectives, but where the relevant TA has chosen not to prioritise it. However,
developers will be encouraged to work through TAs where possible, and it will
be important for the developer to demonstrate the degree of engagement and
support from local government that the development has.
Official
74
Kāinga Ora will not be able to apply directly to the Fund given, as we are
proposing below, they will administer the competitive fund. However, there are
likely to be cases where applications from TAs relate to Kāinga Ora-owned
land and/or relate to areas where they are working in partnership with others.
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Two-path model
75
To allow all regions in New Zealand to apply for investment, while also setting
up a process that can appropriately account for the varying levels of
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complexity in different regions, we are proposing a ‘two-path model’ for the
Fund:
under
75.1 a ‘programme path’ for main urban areas where infrastructure
investment is more complex;
75.2 a ‘project path’ for all other parts of New Zealand with a lower expected
scale and complexity of housing infrastructure investment.
76
The distinction between the paths is based on complexity of potential
infrastructure investment and is not intended to indicate whether regions or
places are inherently a high priority for the Fund. The criteria and evaluation
approach set out above have been designed to drive investment from both
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paths towards the areas that have the greatest need for infrastructure to
support housing development.
77
We propose the programme path will be limited to those areas covered by our
current and emerging Urban Growth Partnerships (the Urban Growth
Partnership areas also include all Tier 1 Councils under the National Policy
Statement on Urban Development). These areas are characterised by
complex infrastructure needs across multiple development areas (including
greenfield and brownfield), have significant transport investment
requirements, and are places where a number of different funding and
financing mechanisms are being considered.
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78
Taking a joined-up programme approach for these places aligns with the
Government’s broader intent under the Urban Growth Agenda to partner with
local governments and iwi to ensure that government investment in
infrastructure is aligned to help deliver connected, thriving and sustainable
urban communities through Urban Growth Partnerships (progress with our
Urban Growth Partnerships is set out in Annex Two).
79
Accordingly, we propose the following groups of TAs are invited to participate
in the programme path:
79.1 Auckland Council6;
79.2 Smart Growth: Tauranga City Council and Western Bay of Plenty
District Council;
79.3 Future Proof: Waikato Regional Council, Waipa District Council,
Waikato District Council, and Hamilton City Council;
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79.4 Wellington Regional Growth Framework: Wellington City Council, Hutt
City Council, Upper Hutt City Council, Porirua City Council, Kāpiti
Coast District Council, Horowhenua District Council, South Wairarapa
the
District Council, Carterton District Council, and Masterton District
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Council;
79.5 Greater Christchurch Partnership: Christchurch City Council, Selwyn
District Council and Waimakariri District Council;
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79.6 Queenstown Lakes District Council.
under
80
We expect that these TAs would engage with their relevant UGP partners
including iwi and Regional Councils and submit a single proposal to the Fund
which would bring together a number of interdependent infrastructure
projects, multiple funders, and different potential funding and financing
mechanisms, including the key trade-offs involved. We anticipate that
proposals through this path will involve greater time for developing proposals,
evaluation and negotiation.
81
All other TAs would be eligible to apply through the project path, which will
have a faster process (given lower levels of complexity, and significantly
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reduced levels of negotiation). Eligible applicants would be invited to apply for
funding contributions towards infrastructure projects required to enable a
specific housing development area (although eligible applicants could submit
multiple proposals).
82
As we have noted above, the programme path TAs are not intended to be
prioritised over other TAs. There is no guarantee that any particular TA or
group of TAs receive any funding if it is not justified under the investment
criteria.
6 Includes council-controlled organisations.
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83
Where iwi and/or developers apply directly to the Fund, they will do so
through the project path. However, to the extent the infrastructure project is
within a region covered by the programme path, their proposal will typically be
considered alongside the broader proposal for that region when funding
decisions are made
Two-stage process
84
To ensure a more efficient overall process for both central government and
applicants, while also encouraging a wide range of councils and parties to
engage with the process, we propose that both the programme and project
paths operate on a two-stage basis. This will involve applicants providing a
relatively straightforward initial expression of interest in respect of the
infrastructure developments they propose (stage one), following which, a
reduced number of full proposals will be sought (stage two) based on
indicative alignment with the investment criteria.
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Fast-track process
85
We also want to ensure that there is sufficient flexibility within the Fund to
progress decisions quickly where this makes sense and enable investments
the
to be committed to this year. We anticipate that there will be few of these
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‘quick win’ projects, but we want to ensure we can move at pace if and when
there are.
86
We propose that both the programme and project paths include a fast-track
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process where some first-stage proposals can progress quickly to decisions,
subject to some additional detail being provided. Proposals going through the
under
fast-track process would be subject to the Kāinga Ora committee’s7
satisfaction that:
86.1 the quality of the opportunity has already been well validated, typically
through a previous central government process; and
86.2 the proposal aligns very well to the Fund’s criteria.
Co-funding requirements and developer commitments
87
Through this Fund, we want to maximise value for money through, for
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example, co-funding, contributions, and non-financial commitments, including
incentivising councils to use non-funding levers that enable housing
development. We also want to avoid the risk that our investment:
87.1 simply leads to increases in land values that manifest as windfall gains
for current owners; and
87.2 crowds out investment by councils or developers, including
disincentivising the use of new financing mechanisms under the IFF
Act.
7 The role of the committee is discussed further below
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88
We therefore propose that the following principles apply to developers and
relevant landowners to the greatest extent possible:
88.1 developers and landowners should be paying a similar share of the
costs of the infrastructure as would be the case if the infrastructure
project was funded by traditional means through the local authority.
This is generally the reasonable ‘growth’ portion of the total
infrastructure cost;
88.2 in some cases this contribution can be non-financial (e.g. land or
commitments to sub-market housing), but any such contribution should
be similar in value to the foregone financial contribution.
89
There is significant complexity to securing contributions from developers and
landowners and, in some cases, it may not be possible under current settings.
In particular there is no mechanism to levy development contributions for
central government funded infrastructure under current law.
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90
This is likely to be particularly challenging for most brownfields development,
and for greenfields development where not all landowners wish to be party to
an agreement.
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91
My officials will carry out further work on the appropriate mechanisms to
secure contributions, which may range from an IFF model, development
agreements, or potentially, change to the development contribution provisions
of the Local Government Act 2002 (although any legislative change may not
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occur soon enough to apply to earlier investments).
under
92
s 9(2)(j)
93
While developers and landowners will be expected to contribute to
infrastructure costs, we propose that the Fund provides for infrastructure
traditionally paid for by local authorities and ultimately funded by rates. While
it will not be a requirement that this funding be recovered, co-investment from
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Local Authorities will be sought in many cases.
94
Providing this subsidy to local government will overcome a barrier to those
councils unable to fund additional infrastructure investment, and it will also act
as an incentive to pro-actively support unlocking housing development.
95
The decision-making criteria will drive applications and our investment
choices towards supporting housing outcomes aligned to the objectives of the
Fund, including with regard to factors like affordability, pace and confidence in
housing outcomes. Kāinga Ora will also seek to secure commitments which
are as specific as is possible with respect to housing development following
infrastructure investment.
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96
However, in many cases it will not be possible to secure enforceable
commitments from developers, particularly in relation to the pace of
development, due to inherent uncertainty about market conditions outside
their control. Officials are continuing to explore which legal and other
mechanisms we can employ to give greatest possible certainty of housing
outcomes before committing funding.
Decision-making processes for the Fund
97
We propose that Kāinga Ora administers the competitive component of the
Infrastructure Fund, a role which the Minister of Housing signalled in the
earlier Cabinet paper “Increasing Housing Supply and Improving Affordability
for First Home Buyers and Renters”. This role involves Kāinga Ora carrying
out the primary analysis and assessment (supported by relevant cross-agency
officials), supporting the advisory group, developing detailed agreements and
undertaking ongoing contract management and monitoring.
Official
98
In light of the scale of investment anticipated, and that this is an investment by
the Crown (rather than from Kāinga Ora’s balance sheet), we propose the
Minister of Finance and the Minister of Housing be the final decision makers
on investments.
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99
We further propose that those decisions would be informed by advice from a
committee of the Kāinga Ora board, subject to the Board establishing a
committee that has the following expertise represented (if these cannot be
found within current Kāinga Ora Board members then additional independent
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members may be appointed to achieve this):
under
99.1 Housing development;
99.2 Māori housing
99.3 Infrastructure delivery
99.4 Local government
99.5 Finance and risk management.
100
The committee would be supported by Kāinga Ora and independent technical
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experts when needed. It would also be responsible for agreeing which
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proposals advance past the initial expressions of interest stage (in the two-
stage process).
101
In proposing that it is a committee of the Kāinga Ora Board that provides
advice to Ministers, we note that this is on the basis that Kāinga Ora is not
able to apply directly to the competitive component of the Fund.
102
To ensure that the advice from the Kainga Ora Board reflects the intent of the
Fund and broader government priorities the Minister of Housing will set out
her expectations for the advice in a letter to the Chair of the Board.
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103
Additionally, we propose that the committee will be required in its advice to
identify how input from the cross-agency reference group proposed in
paragraph 106.5 has informed its advice, including with respect aligning with
other infrastructure funding process such as Three Waters Reform incentives,
land transport funding and processes under the Infrastructure Funding
Finance Act.
104
We further propose that, where the committee recommends Ministers
consider proposals in which Kāinga Ora has a material interest, then Ministers
also be provided with independent second-opinion advice from HUD, and any
other entity as directed by Ministers, in order to manage any conflict of
interest risks.
Aligning with other infrastructure funding processes
105
Across government, we are investing heavily in different forms of
infrastructure (e.g. three waters and transport), and it is important to ensure
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general alignment across infrastructure processes as far as possible. It is my
expectation that a number of practical measures will be put in place at a policy
and operational level to align the Fund with other key infrastructure
processes.
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106
We propose that these steps include:
106.1 requiring proposals to identify where central government funding has
previously been sought or received in relation to the project and
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dependencies between the proposal and other processes;
under
106.2 inviting applicants to identify how non-financial powers of local
government and central government (e.g. Ministerial RMA powers,
RMA fast-track, Urban Development Act powers) could complement
funding to maximise the impact. Where these are identified, Kainga
Ora will work with relevant agencies and portfolio Ministers to progress;
106.3 using existing cross-agency groups, particularly for the programme
path proposals, including the Urban Growth Partnership and place-
based partnership structures;
106.4 triaging all proposals for where review by another agency is required;
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and
106.5 establishing an interagency infrastructure officials reference group to
inform the decisions and advice from the Kainga committee (at both the
first stage and full proposals) with the following entities represented:
106.5.1 Treasury
106.5.2 Ministry of Housing and Urban Development
106.5.3 Department of Internal Affairs
106.5.4 Ministry of Transport
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106.5.5 Waka Kotahi
106.5.6 Infrastructure Commission
106.5.7 Crown Infrastructure Partners.
107
Given this Fund can be used to fund transport infrastructure, it will have a
critical interface with the central government land transport funding system.
More detailed consideration needs to be given to a number of issues,
including:
107.1 how to align with land transport planning and funding processes (noting
that the 2021-2024 National Land Transport Programme is soon to be
finalised) as well as Government transport objectives;
107.2 financial treatment when funding flows to Waka Kotahi and whether
this is more appropriately structured as grants or loans; and
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107.3 management of conflicts of interests.
108
We propose that decisions on the alignment with the land transport funding
system are delegated to the Minister of Finance, the Minister of Housing and
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the Minister of Transport with advice provided in June 2021.
109
Negotiations relating to the Three Waters Reform incentive packages for
Councils are expected to occur in June 2021, well before proposals for the
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Fund will be evaluated. Including the competitive fund in the scope of these
negotiations would essentially require pre-determining envelopes for various
local authorities in advance of assessing specific proposals. This would
under
significantly reduce our ability to drive the highest value for money housing
outcomes.
Outstanding matters
110
There are two further outstanding matters relating to the competitive fund on
which we are seeking delegations from Cabinet to the Minister of Finance and
me, because there has been insufficient time to resolve them:
110.1 Whether it is necessary to provide operational funding for Kāinga Ora
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to administer the competitive fund and, if so, at what level. Ensuring
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this does not duplicate any funding provided through the Kāinga Ora
Sustainable Funding Budget 2021 Initiative agreed by Cabinet will form
part of this assessment [CAB-21-MIN-0116.15];
110.2 The monitoring, reporting and evaluation requirements for the
competitive fund.
111
We also seek a delegation for any further minor design decisions and
technical adjustments to the settings proposed in this paper relating to the
competitive fund, and for any further implementation decisions.
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Infrastructure Fund Component 3: Māori Infrastructure Fund
112
In line with the objectives of the Fund, it’s important that the Fund enable
Māori-led investments in infrastructure for Māori housing outcomes. Achieving
this will require that:
112.1 Māori have a direct path to receiving investment through the Fund
that’s consistent with the Te Maihi o te Whare Māori – Māori and Iwi
Housing Innovation Framework for Action;
112.2 settings enable smaller and often remote developments, with a wider
range of investment needs than will typically be the case elsewhere;
and
112.3 the process for considering these smaller Māori-led investments be
specifically designed to meet their needs and avoids unrealistic
competition with larger commercial developments.
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113
While the competitive Infrastructure Acceleration Fund described above is
well suited to supporting larger Māori-led commercially oriented investments,
it is not the right solution for smaller Māori-led investments, including
papakāinga developments or rural investment with onsite infrastructure.
the
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114
Cabinet has agreed to provide $380 million toward increasing Māori housing
supply through Whai Kāinga Whai Oranga (Māori Housing Budget 2021
initiative). However, this funding is only sufficient for provision of houses, and
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not infrastructure, which is also required in many cases. Additionally, there are
Māori housing opportunities where infrastructure is the primary constraint
under
[CAB- 21 MIN 0116.15 refers].
115
On 17 May 2021 Cabinet agreed that the most effective way to provide
infrastructure funding to Māori-led housing projects is to make a separate
pathway tailored to Māori. To achieve this $350 million has been made
available through the Fund for a Māori Infrastructure Fund [CAB-21-MIN 0173
refers].
High-level settings for Māori infrastructure investment.
116
In addition to the objectives of the Fund the Māori Infrastructure Fund will
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have two additional objectives of:
116.1 supporting new iwi led housing delivery models that sustainably
increase Māori housing delivery in the medium to long-term; and
116.2 enabling development on whenua Māori (but not be restricted to
whenua Māori).
117
To give effect to this we propose the Māori Infrastructure Fund operates a
‘two path model’ similar to the Infrastructure Acceleration Fund:
117.1 a ‘project path’ for small scale developments across Aotearoa; and
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117.2 an ‘iwi programme path’ for multi-year delivery programmes by
Regional/Tribal Development Entities.
118
The iwi programme path will create an infrastructure pipeline that supports
new delivery models being established under Whai Kāinga Whai Oranga. I
expect a significant portion of Māori infrastructure funding will support the iwi
programme pathway, but do not propose to specify a breakdown in funding
between the two paths.
119
We consider the investment criteria for the Infrastructure Acceleration Fund to
be relevant for the Māori Infrastructure Fund but before confirming these
criteria they will need to be aligned to investment criteria being developed for
Whai Kāinga Whai Oranga. We therefore request a delegation from Cabinet
to the Minister of Finance, Minister of Housing and Associate Minister of
Housing (Māori housing) to determine the final criteria.
Project Pathway – Expanding existing Māori housing programmes to address
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immediate housing need
120
For the project pathway, we propose Māori entities and/or housing providers
be the lead applicants (including developers and Regional/Tribal Development
the
Entities). Where projects include trunk infrastructure, Māori entities will be
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encouraged to work alongside territorial authorities where possible. These
projects will closely align with supply projects being progressed under Whai
Kāinga Whai Oranga.
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121
This pathway will be contestable using an on demand model similar to
existing Te Puni Kōkiri and Te Tūāpapa Kura Kāinga Māori housing funding
under
models. Proposals will be prioritised based on investment criteria with a
particular emphasis on readiness balanced by the place and need. There is
no pre-determined target spend for particular places in this model.
Iwi Programme pathway- Shifting the scale of impact and long-term sustainability of
Māori housing delivery
122
This pathway focuses on regional housing delivery co-ordinated by
Regional/Tribal Development Entities. The development entities will be made
up by one or more iwi and deliver multi-year programmes of housing delivery
covering a range of tenures and typologies. In many cases projects will
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involve multiple funding sources, landowners and other stakeholders.
123
Establishing Regional/Tribal Development Entities will be a new approach to
partnering with Māori for housing delivery. Iwi governance structures for
Regional/Tribal Development entities will be essential to ensure funding is
prudently managed. We expect our partnership with these new entities will
continue to evolve and shift the scale of impact and long-term sustainability of
Māori housing delivery.
124
Whai Kāinga Whai Oranga funding will support the establishment of these
regional entities through capability and supply funding. Further detail on this
approach is being developed as part of Whai Kāinga Whai Oranga.
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125
In the first instance we intend funding to be allocated to Regional/Tribal
Development Entities in the following areas:
125.1 Te Tai Tokerau
125.2 Tairāwhiti
125.3 Kahungunu
125.4 Taranaki
125.5 Bay of Plenty/Rotorua
126
These areas have a high Māori population, communities with high housing
needs and whānau in emergency accommodation (motels, campervans, etc),
and where there are concentrations of whenua Māori. In the longer term, we
expect further regional development entities will be established across
Aotearoa and request delegated authority to add regions based on housing
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need.
127
To focus on these priority regions, we intend to run a closed negotiation
model. Under this model the Government first determines maximum
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investment (envelopes) for each region and then, in partnership with the
regional development entity, agrees on a multi-year delivery programme and
the infrastructure needs to support that.
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128
Determining investment envelopes will require discussion with iwi and Māori
partners and further analysis on need and readiness. We therefore request
delegated authority to the Minister of Finance, Minister of Housing and
under
Associate Minister of Housing (Māori housing) to determine final investment
envelopes.
129
Some regions/tribal areas are establishing regional entities and intend to start
negotiations from 1 July 2021. We anticipate the iwi programme pathway to
be operational by next year. In the meantime we expect early projects to be
progressed under the project delivery pathway while the programme pathway
is being developed.
Eligible projects and expenditure
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130
We propose the same rules for eligible projects applied to the Infrastructure
Acceleration Fund be applied to the Māori infrastructure pathway with the
following changes to enable smaller and rural developments:
130.1 onsite infrastructure (i.e. non-enabling infrastructure), including site
remediation, onsite civils and foundations, onsite three waters including
septic tanks, is eligible for funding;
130.2 no minimum dwelling requirements for projects, to enable rural and
smaller developments; and
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130.3 transmission infrastructure and telecommunications infrastructure are
eligible for funding where the costs won’t be met by utility companies
for example rural sites where utility companies provide infrastructure
only within 100m of trunk infrastructure.
Co-funding requirements and developer commitments
131
The funding proposed in the Māori Infrastructure Fund differs from investment
through the Infrastructure Acceleration Fund in the following key ways:
131.1 Many developments will be on Whenua Māori under Te Ture Whenua
Māori Land Act 1993 which face funding and financing barriers specific
to their land status.
131.2 Based on existing proposals made to Te Tūāpapa Kura Kāinga, we
expect the majority of Māori infrastructure proposals will not be strictly
commercial in nature. The proposals create long-term assets that
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enhance social and economic wellbeing.
131.3 The Māori Infrastructure Fund will focus on regional locations,
particularly rural environments, most of which are unlikely to have
the
significant housing delivery without subsidies because house sale
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prices are below the cost to build.
131.4 The majority of projects will require onsite infrastructure rather than
trunk infrastructure so investment is less likely to displace local
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authority investment.
under
132
On this basis, we do not expect developers and landowners should be paying
a similar share of the costs of the infrastructure as would be the case if the
project was funded by traditional means through the local authority. Where
proposals have commercial elements, officials will seek to avoid subsiding the
commercial activity. We also expect that many larger, commercially-oriented
projects backed by Māori will often use the Infrastructure Acceleration Fund.
Decision-making processes for the Māori Infrastructure Fund
133
Cabinet agreed that before funds through Whai Kāinga Whai Oranga be
spent, key settings be approved by the Minister of Finance, the Minister of
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Housing, the Minister of Māori Development and the Associate Minister of
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Housing (Māori Housing) [CAB-21-MIN-0116].
134
Following initial approval by the above Ministers, we expect the following
Ministers to have ongoing oversight of Whai Kāinga Whai Oranga housing
programme (Whai Kāinga Whai Oranga Ministers):
134.1 Associate Minister of Housing (Māori housing);
134.2 Minister of Māori Development; and
134.3 Associate Minister of Housing (Homelessness).
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135
To ensure alignment between the Māori Infrastructure Fund, the Infrastructure
Acceleration Fund and Whai Kāinga Whai Oranga housing investment, we will
retain final decision making for the Māori Infrastructure Fund among the
Minister of Housing, the Minister of Finance and the Associate Minister of
Housing (Māori Housing).
136
We propose that Te Tūāpapa Kura Kāinga administers the Māori
Infrastructure Investment Fund. This role involves Te Tūāpapa Kura Kāinga
carrying out the primary analysis and assessment (supported by relevant
cross-agency officials), supporting the advisory group, developing detailed
agreements and undertaking ongoing contract management and monitoring.
137
We expect any Māori infrastructure investment proposals to go through a
Chief Executive led MAIHI governance group and for this group to provide
advice to decision-making Ministers on investment decisions.
138
Additionally, the Whai Kāinga Whai Oranga ministers will provide comment to
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decision-making Ministers on alignment of infrastructure projects to Whai
Kāinga Whai Oranga projects.
139
Following initial approval, we expect the Associate Minister of Housing (Māori
the
housing) to be responsible for the ongoing monitoring, reporting and
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evaluation requirements for the Māori Infrastructure Fund.
Outstanding matters
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140
Outlined above are high-level investment settings for the Māori Infrastructure
Fund and details on delegations we are seeking from Cabinet to the Minister
under
of Finance, Minister of Housing and Associate Minister of Housing (Māori
Housing). In particular:
140.1 Final investment criteria
140.2 Funding envelopes for the Iwi programme pathway
140.3 The monitoring, reporting and evaluation requirements for the Māori
Investment Fund.
141
We also seek a delegation to the Associate Minister of Housing (Māori
Information
Housing) for any further minor design decisions and technical adjustments to
Released
the settings proposed in this paper relating to the Māori infrastructure
pathway, and for any further implementation decisions.
Update on other funds
142
Updates are provided below on the Kāinga Ora Land Programme, Land for
Housing Programme, and refocused Residential Development Response
Fund (proposed to be called the Affordable Housing Fund). The emerging
Purpose-Built Rentals sector (also known as build to rent) will be supported to
some degree by each of these funds. A more comprehensive report back will
be provided in mid-2021 on this sector, focused on how the Government can
support purpose-built rentals in places experiencing acute rental stress, and
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where rental demand is high such as areas close to public transport, amenity,
and jobs.
143
Increasing rental supply is a key focus of these funds, however there will be
trade-offs between volume and affordability. Large scale developments with
limited subsidies can increase rental supply but are likely to deliver rental
housing at or above median rents. Delivering new rentals that are affordable
to low- to moderate-income households will require greater subsidies per
dwelling, and therefore reduce the volumes able to be supplied through the
funds. The mid-year report back on purpose-built rentals will set out these
trade-offs reflecting engagement with the sector and the parameters of the
funds.
Kāinga Ora Land Programme
144
Cabinet has agreed to establish a Kāinga Ora Land Programme for strategic
land purchases to increase the pace, scale and mix of housing developments,
Official
including more affordable housing (both for rental and home ownership). The
Programme will be financed through an additional $2 billion of Kāinga Ora
borrowing, and supported by $46 million of operating funding per annum
provided by Government.
the 1982
145
Kāinga Ora was established with an express mandate to be both a world
class public housing landlord and to partner with others to deliver a range of
urban development projects catering to diverse housing needs and
aspirations. The Programme will provide Kāinga Ora with the additional
Act
financial resources it needs to fulfil this dual mandate, including through taking
advantage of the unique land acquisition and development powers available
under
to it under the Urban Development Act where appropriate.8
146
The key measure of success will be the extent to which the Programme
facilitates housing provision that is genuinely additional to, and more
affordable than, what the market might otherwise have delivered. It will need
to pursue a mix of smaller, more straightforward developments that can be
progressed at pace; and larger, more complex projects that will have longer
lead times (e.g. because of more complex planning and infrastructure
requirements) but will make a greater difference over the medium- to long-
term.
Released
Information
147
Officials are currently preparing further advice on the detailed parameters of
the Programme, which will be provided to the Ministers of Finance and
Housing by mid-June. The scope of this advice includes:
147.1 Programme objectives and investment principles;
8 This includes the ability to acquire land by compulsion where necessary (e.g. to assemble fragmented land
parcels for comprehensive, integrated development close to jobs, amenities and transport); and a toolkit of
powers relating to land use planning, consenting, infrastructure provision and reserves, that Kāinga Ora and its
development partners can access when undertaking Specified Development Projects.
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147.2 The site assessment and prioritisation framework;
147.3 Governance and decision making9;
147.4 Monitoring, reporting and evaluation;
147.5 Mechanisms to protect Māori interests and support Māori aspirations in
relation to housing and urban development; and
147.6 How the fund could support purpose-built rental housing.
148
Kāinga Ora is already investing in a mix of brownfield and greenfield land
acquisition opportunities, which will be assessed against the detailed
Programme parameters once finalised. The Programme has been sized on
the assumption that, in most cases, Kāinga Ora will purchase and assemble
land, install key infrastructure (where necessary), and on-sell the land to
development partners on condition they complete the development in
accordance with the Government’s housing priorities Official
(pace, density, tenure
mix, etc). Other approaches may be considered on a case-by-case basis.
Land for Housing Programme
the 1982
149
An additional $50 million of funding from the Housing Acceleration Fund has
been added to Land for Housing Programme funding to expand the
opportunities for land able to be acquired by the Programme for housing, and
the range of public good outcomes able to be achieved on that land (such as
Act
by increasing the pace of development, or the extent of affordable housing or
purpose-built rentals able to be delivered).
under
150
Cabinet has delegated authority to Ministers to agree new programme level
targets and investment principles to broaden the range of non-market
outcomes that the Programme can deliver. The funding will complement these
new settings, as it will assist the Programme to better tailor its delivery to
regional housing demands, supporting both our urban growth partnerships
and place-based initiatives. As the Programme acquires land at market value,
land price inflation is making the outcomes the Government seeks from the
Programme progressively less achievable, particularly in places with more
challenging development economics. The funding addresses this difficulty in
two key ways, by assisting with the purchase of land that is suitable for
Released
Information
development but needs to be discounted for housing to be commercially
feasible, and by expanding the range, tenure and types of housing that can be
delivered on the land.
151
s 9(2)(j)
9 This will reflect the specific expectations set out in Cabinet Office Circular CO (19) 6
Investment Management
and Asset Performance in the State Services, along with any specific statutory functions and decision rights set
out in relevant legislation.
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151.1
s 9(2)(j)
151.2
151.3
Refocused Residential Development Response Fund – the Affordable Housing
Fund
152
The Residential Development Response Fund was established to support
residential construction activity during COVID-19, responding to concerns
about a potential decline in new house building and construction sector jobs.
Given that this risk has not materialised, with the pipeline of future work
remaining strong, it will now focus on supporting the sector to deliver
affordable housing for purchase and rent on private land. We propose that it
Official
now be called the Affordable Housing Fund.
153
The purpose of the Affordable Housing Fund is to encourage the development
of modest housing for both rental and home ownership for low- to moderate-
the
income households. It will achieve this by funding or otherwise supporting the
1982
construction of housing that:
153.1 is well located to transport infrastructure on both brownfields and
greenfields;
Act
153.2 delivers housing for low- to moderate-income households to rent or to
under
purchase, and is in addition to that which would have been developed
anyway;
153.3 ensures that the Crown’s investment in affordability is, to the extent
possible, retained within the community;
153.4 builds an asset base off which future affordable housing development
can be leveraged; and
153.5 aligns with government’s other objectives, such as supporting high-
quality denser urban form, and creating a net-zero carbon emissions
Information
economy.
Released
154
The funding for the Affordable Housing Fund was created through Budget
2020 with $250 million originally appropriated for KiwiBuild, and with $100
million of operational funding. The funding from the KiwiBuild appropriation
must be returned to the Crown within 10 years.
155
The Affordable Housing Fund will seek to stimulate affordable housing
development through partnerships with iwi and CHPs. Many CHPs and iwi
have traditionally operated in this part of the housing continuum. My officials
are engaging closely with not-for-profit organisations, CHPs, iwi and Māori
organisations and private developers to identify how we can work together to
build more affordable housing, both for rental and for homeownership, whilst
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ensuring that the government’s investment in improving housing affordability
is retained in the long-term.
156
The requirement to return the $250 million of funding from the KiwiBuild
appropriation introduces some challenges for delivering rental housing that is
below market rents. Officials are investigating options for how best to use this
recyclable funding and the $100 million non-recyclable funding to achieve the
purpose of the Affordable Housing Fund by engaging closely with CHPs that
are already providing affordable rental properties.
157
Proposals that deliver affordable market housing (typically for more moderate-
income earners), rather than rental dwellings affordable to low-income
households, may be easier to fund with the recyclable funding. Projects like
this are not likely to be affordable for low-income households though would
still deliver a needed increase to our housing stock.
158
Further detailed design work is required following engagement with CHPs and
Official
iwi. We propose that Cabinet delegate approval of the final details of the
design of the fund to the Minister of Finance and the Minister of Housing. We
also propose that final approval of the funding decisions for projects to be
supported by the Affordable Housing Fund should be delegated to the
the 1982
Minister of Finance and the Minister of Housing.
Implementation
159
The table below sets out the key indicative timeframes for the Infrastructure
Act
Fund.
under
Infrastructure Fund
Large scale projects
First tranche of
Individual
funding announced:
programme
June-Aug 2021
business cases
approved and
announced: From
Nov 2021
Competitive Fund
Fund launched
First fast-tracked
Remaining 1st
(Infrastructure
(Expression of interest decision announced:
r
ound funding
Acceleration Fund)
released
): Late June
Nov - Dec 2021
decisions
2021
announced:
Information
April - Oct
Released
2022
Māori Infrastructure
Initial project-path
Iwi programme
Fund
investments
pathway
announced: July –
operational: Jan
Sept 2021
2022
Other Funds and Programmes
Kāinga Ora Land
Detailed programme
First sites under
Programme
parameters agreed by
conditional contract:
Joint Minsters:
Mid-
Jul – Sep 2021
June 2021
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Affordable Housing
Fund launched
Engagement with
Announce
Fund
(invitation to partner):
partners where we
prioritised
Late July 2021
have existing
projects:
Nov -
relationships to
March 2022
identify projects to
prioritise:
July - Oct
2021
Financial Implications
160
There are no additional financial implications arising from this paper because
the funding for the $3.8 billion Housing Acceleration Fund has already been
agreed, the operational funding of $46 million per annum over the next four
years and outyears for the Kāinga Ora Land programme was secured through
Budget 21, and the funding for the Affordable Housing Fund (formerly the
Residential Development Response Fund) has already been appropriated.
Legislative Implications
Official
161
This paper does not have any direct legislative implications.
Impact Analysis
the 1982
Regulatory Impact Statement
162
The impact analysis requirements do not apply.
Act
Climate Implications of Policy Assessment
under
163
The Housing Acceleration Fund, Affordable Housing Fund and Kāinga Ora
Land Programme will support higher density housing and greater public and
active transport use, supporting our transition to a net carbon neutral
economy. Proposed investment in large scale projects in Auckland will
increase housing density and improve amenity in and around town centres
and public transport nodes. In addition to advancing our climate objectives,
these measures will also help to increase social connection and improve
access to employment and recreation.
Population Implications
Released
Information
164
By taking measures to increase the supply of affordable housing (whether for
home ownership or rental), these proposals are likely to positively impact
those groups that are currently renting and/or unable to buy a home, in
particular it should benefit:
164.1 Māori and Pacific people who are less likely to own their own home. In
2018, the proportion of Māori and Pacific people living in owner-
occupied homes were 47.2 per cent and 35.1 per cent respectively,
compared to the total population figure of 64.3 per cent. Government is
also taking other measures to improve housing for Māori and Pacific,
including through Progressive Home Ownership, MAIHI partnerships
and our public housing build programme.
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164.2 Younger people where declining home ownership rates have been
sharper.
164.3 Disabled people, particularly those with accessibility needs, who often
experience more difficulty finding a home. The actions should positively
impact on disabled people through increasing the supply of affordable
housing for ownership and rent.
165
More broadly, assessments about aligning with need will be considered in
decisions made through the Affordable Housing Fund, the Kāinga Ora Land
programme, and Land for Housing Programme.
Human Rights
166
There is no inconsistency with the Bill of Rights or Human Rights Act.
Consultation
Official
167
Consultation has occurred across the Treasury, Kāinga Ora, the Ministry of
Transport, the Department of Internal Affairs, and Waka Kotahi New Zealand
Transport Agency. The Department of the Prime Minister and Cabinet has
been informed.
the 1982
168
However the section relating to
Infrastructure Fund Component 3:
Infrastructure for Māori has not been consulted on due to time constraints.
Act
Treasury comment
169
The Treasury does not consider that Kāinga Ora’s board, or a committee
under
thereof, should lead the decision-making process for a competitive Crown
investment program in which their organisation has an interest. Kāinga Ora
will be responsible for administering the Infrastructure Fund, and could also
provide technical input to the advisory group, but recommendations for Crown
investment should come from an independently-chaired advisory board
appointed by Ministers. It is also important for the administrative and advisory
functions of the Fund to be adequately resourced for their respective roles.
Communications Information
170
We intend to announce further details about the Infrastructure Fund including
Released
for example, its three component parts, who is eligible to apply, and when it
will open, at a time agreed with the Prime Minister’s Office.
171
Key details will also be made available on the Kāinga Ora and HUD websites.
Proactive Release
172
The Minister of Housing intends to proactively release this paper at, or
around, the time that further public announcements are made. Sections that
would undermine the Government’s position in negotiations with local
government, iwi and development partners will be withheld. For example, we
would look to withhold the indicative share of the infrastructure fund that are
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being allocated to the large scale projects as discussions are still underway
around other potential sources of funding, as well information on the
additional funding provided to Land for Housing and particularly, where that
might be used.
Recommendations
The Minister for Housing and the Associate Minister of Housing (Māori Housing)
recommend that the Committee:
1
note in March 2021 Cabinet agreed to a suite of demand and supply-side
measures to address housing affordability, support first home buyers and
better incentivise investment in new homes [CAB-21-SUB-0045, CAB-21-
MIN-0070 and CAB-21-MIN-0061 refers];
2
note that the supply measures included establishing a Housing Acceleration
Fund, which would comprise the Infrastructure Fund, changes to Land for
Official
Housing], and the Kāinga Ora Land Programme [CAB-21-MIN-0061 refers];
3
note that Cabinet has agreed to commit $3.8 billion to the Housing
Acceleration Fund, with approximately $3.75 billion for the Infrastructure
the
Fund, and $50 million of additional funding for the Land for Housing
1982
Programme [CAB-21-MIN-0116-15 refers];
4
note that the operating costs associated with servicing the Kāinga Ora
borrowing required to implement the Kāinga Ora Land Programme of $46
Act
million per annum over the next four years and outyears was agreed as part
of Budget 21;
under
5
note that Cabinet sought a report back on the design parameters for the
Infrastructure Fund, including on alignment with existing infrastructure
processes (in particular three waters and transport) and ongoing collective
ministerial oversight across alignment with the Treasury, Ministry of Transport,
Waka Kotahi New Zealand Transport Agency, Department of Internal Affairs
and Kāinga Ora [CAB-21-MIN-0061 refers];
Infrastructure Fund
6
note that the Infrastructure Fund forms the key component of the Housing
Released
Information
Acceleration Fund;
7
agree that the objective for Infrastructure Fund is to invest in infrastructure
that unlocks housing development. This infrastructure investment will:
7.1
enable brownfield intensification and greenfield expansion in locations
with access to amenity and opportunity;
7.2
be limited to investments that would not otherwise be funded, or not
funded fast enough to meet demand for housing;
7.3
maximise value for money including through co-funding, contributions,
and commitments from local government and third parties;
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7.4
enable the building of homes that are affordable for low-to-moderate
income households;
7.5
incentivise councils to use non-funding levers that enable housing
development;
7.6
create a pipeline of investment including near-term and medium-term
activity that ramps up sustainably to allow the construction sector to
steadily increase its capacity and absorb the investment without price
escalation;
7.7
align with wider government objectives, such as ensuring good urban
form, partnerships with iwi and Māori, and the transition to a net-zero
emissions economy; and
7.8
be spread across multiple regions and include both large urban areas
and regional centres.
Official
8
agree to the following investment criteria and weightings for the Infrastructure
Fund (described in more detail in paragraph 33):
8.1
Housing benefits (40%);
the 1982
8.2
Impact of funding (20%);
8.3
Cost and co-funding (20%);
Act
8.4
Capability and readiness (20%);
under
9
note there are three components to the Infrastructure Fund, with the following
indicative funding:
9.1
Kainga Ora Large Scale Projects ($2.3 billion);
9.2
Contestable fund ($1.08 billion);
9.3
Infrastructure for Māori housing ($350 million);
Large scale projects
Released
Information
10
note the Kāinga Ora Large Scale projects align well with the objectives and
criteria for the Fund, in particular by enabling brownfield intensification and
redevelopment to occur at pace and scale in areas of high need with access
to amenity and opportunity;
11
note that decisions on tranche one funding have been delegated to myself
and the Minister of Finance and will be made in June 2021. Expectations are
that the first tranche of funding comprises up to $440 million and focuses on
key infrastructure projects and land development work needed to maintain
momentum, covering:
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11.1 funding for design, infrastructure and land remediation work incurred
since April 2021 and forecast to June 2022 (up to $375 million)
11.2 a broader funding commitment for Eastern Porirua to deliver key
precinct wide trunk water infrastructure currently subject to the fast-
track consenting application ($65 million).
12
note that council conversations are ongoing and that the level of their
contributions is still uncertain, the Minister of Housing will report back to
Cabinet with further information;
13
note that the proposed approach for the remainder of funding (beyond tranche
one) will be subject to individual programme business cases for each large
scale project, which will be completed within the first year;
14
note that report back on the business case process and approach for
drawdown, monitoring and reporting, is to be provided to Ministers for
Official
consideration in December 2021;
15
agree to $307 million being held for the Porirua large scale project, noting that
further detail decisions on funding beyond tranche one will be subject to the
the
programme business case;
1982
Infrastructure Fund Component 2: Infrastructure Acceleration Fund (competitive
fund)
Act
16
agree that for most other infrastructure investments a contestable process is
most appropriate given the wide range of potential projects and the need to
under
provide for maximum impact;
17
agree that the competitive fund may include multiple funding rounds;
18
agree that the scope of eligible projects in the competitive fund be limited to:
18.1 new or upgraded enabling infrastructure in the form of transport
(including local roading, state highways, public transport infrastructure,
footpaths and cycleways), three waters (water supply, wastewater and
stormwater) and flood-management infrastructure; and
Information
18.2 which are wholly or primarily for the purpose of enabling the building of
Released
new or additional dwellings in the short to medium term; and
18.3 which are expected to enable at least:
18.3.1
200 additional dwellings in tier one urban environments
(under the National Policy Statement on Urban Development)
18.3.2
100 additional dwellings in tier two urban environments
18.3.3
30 additional dwellings elsewhere;
19
agree that eligible costs include:
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19.1 costs of feasibility studies and other early-stage development work;
19.2 costs of designing, consenting, tendering and acquiring land (where it
is wholly required for eligible infrastructure projects and broader large
scale project activities);
19.3 constructing eligible infrastructure projects;
19.4 in limited situations, non-capital administrative costs where these are
necessary to establishing complementary financing;
20
agree the lead applicants on proposals may be territorial authorities,
developers or iwi, with developers encouraged to work through territorial
authorities where possible;
21
note that Kāinga Ora will not be able to apply directly to the competitive fund;
22
agree to a two-path structure for the Fund with the following paths:
Official
22.1 a ‘Programme path’ for main urban areas with where infrastructure
investment is more complex;
the 1982
22.2 a ‘Project path’ for all other parts of New Zealand with a lower expected
scale and complexity of housing infrastructure investment.
23
agree that the following groups of Territorial Authorities, should they wish to
Act
apply to the Fund, must apply through the programme path as a group:
23.1 Auckland Council; under
23.2 Smart Growth: Tauranga City Council and Western Bay of Plenty
District Council;
23.3 Future Proof: Waikato Regional Council, Waipa District Council,
Waikato District Council, and Hamilton City Council;
23.4 Wellington Regional Growth Framework: Wellington City Council, Hutt
City Council, Upper Hutt City Council, Porirua City Council, Kāpiti
Coast District Council, Horowhenua District Council, South Wairarapa
Information
District Council, Carterton District Council, and Masterton District
Released
Council;
23.5 Greater Christchurch Partnership: Christchurch City Council, Selwyn
District Council and Waimakariri District Council;
23.6 Queenstown Lakes District Council;
24
agree that all other Territorial Authorities (not listed in recommendation in
recommendation 23) are eligible to apply under the Project Path;
25
agree that both paths operate primarily as a two-stage process;
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26
agree that some projects may be fast-tracked through a one-stage process
subject to the satisfaction of the Kāinga Ora Board committee that:
26.1 the quality of the opportunity has already been well validated, in many
cases through a previous central Government process; and
26.2 the proposal aligns very well to the Fund’s criteria;
27
agree the following principles apply to co-funding requirements for developers
and relevant landowners to the greatest extent possible:
27.1 Developers and landowners should be paying a similar share of the
costs of the infrastructure as would be the case if the infrastructure
project was funded by traditional means through the local authority.
This is generally the reasonable ‘growth’ portion of the total
infrastructure cost;
Official
27.2 In some cases this contribution can be non-financial (e.g. land or
commitments to sub-market housing), but any such contribution should
be similar in value to the foregone financial contribution;
28
note there are practical challenges in some cases with securing co-funding
the 1982
due to the inability to levy development contributions on central government-
funded infrastructure. Officials are exploring legislative and non-legislation
options and I will work with the Minister of Local Government on this issue;
Act
29
agree that the competitive fund will provide for infrastructure traditionally paid
for by local authorities and ultimately funded by rates, without requiring that
under
this funding be recovered (although co-investment from Local Authorities will
be sought in many cases);
30
agree that Kāinga Ora will administer the competitive fund;
31
agree that final decisions on investments within the competitive fund be made
by the Minister of Finance and the Minster of Housing;
32
agree that Ministerial decisions be informed by advice from a committee of the
Kāinga Ora Board, subject to the Board establishing a committee with the
following expertise represented:
Released
Information
32.1.1
Housing development;
32.1.2
Māori housing
32.1.3
Infrastructure delivery
32.1.4
Local government
32.1.5
Finance and risk management;
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33
note that to ensure that the advice from the Kainga Ora Board reflects the
intent of the Fund and broader government priorities the Minister of Housing
will set out her expectations for the advice in a letter to the Chair of the Board.
34
agree that the committee be required in its advice to identify how input from
the interagency reference group has informed its advice;
35
agree that where the committee recommends Ministers consider proposals in
which Kāinga Ora has a material interest, then Ministers also be provided with
independent second-opinion advice from HUD, and any other entities as
directed by Ministers;
36
agree to the following steps we have identified to support alignment between
this Fund and other central government infrastructure funding processes:
36.1 requiring proposals to identify where central government funding has
previously been sought or received in relation to the project and
Official
dependencies between this proposals and other processes
36.2 inviting applicants to also identify how non-financial powers of central
government (e.g. Ministerial RMA powers, RMA fast-track, Urban
the
Development Act powers) or local government could complement
1982
funding to maximise the impact;
36.3 utilising cross-agency groups, particularly for the programme path
proposals, including the Urban Growth Partnership and place-based
Act
partnership structures;
under
36.4 triaging all proposals for where review by another agency is required;
36.5 establishing an interagency infrastructure officials reference group to
inform the recommendations of the advisory group with the following
entities represented (Treasury, Ministry of Housing and Urban
Development, Department of Internal Affairs, Ministry of Transport,
Waka Kotahi, Infrastructure Commission, and Crown Infrastructure
Partners);
37
note that further consideration is required for how to integrate the competitive
fund with land transport funding process and Waka Kotahi investments
Released
Information
including the role for grants versus loans and management of conflicts of
interest;
38
agree to delegate decisions on alignment between the land transport funding
and the competitive fund to the Minister of Finance, the Minister of Housing
and the Minister of Transport;
39
note including the competitive fund in negotiations relating to the Three
Waters Reform incentive packages for Councils are expected to occur in the
June 2021, would essentially require pre-determining envelopes for various
local authorities and significantly reduce the ability to drive the highest value
for money housing outcomes;
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40
agree to delegate monitoring, reporting and evaluation requirements and any
further implementation decisions for the competitive fund to the Minister of
Finance and the Minister of Housing;
41
agree to delegate decisions on administration funding for Kāinga Ora to
deliver the competitive component of the infrastructure fund and to the
Minister of Housing and the Minister of Finance, ensuring this does not
duplicate any funding provided through the Kāinga Ora Sustainable Funding
Budget Initiative;
42
agree to delegate further minor design decisions, technical adjustments to the
settings proposed in this paper and implementation decisions relating to the
competitive fund to the Minister of Housing;
Infrastructure Fund Component 3: Infrastructure for Māori Housing
43
note that while the competitive Infrastructure Acceleration Fund is well suited
to supporting larger Māori
Official
-led commercially oriented investments; it is not the
right solution for smaller Māori-led investments including papakāinga
developments or rural investment with onsite infrastructure;
the
44
note Cabinet has agreed to provide $380 million toward increasing Māori
1982
housing supply through Whai Kāinga Whai Oranga (Māori Housing Budget
2021 initiative). However, this funding is only sufficient for provision of houses,
and not infrastructure which is also required in many cases. Additionally, there
are Māori housing opportunities where infrastructure is the primary constraint;
Act
45
note on 17 May Cabinet agreed that $350 million be made available through
under
the Housing Acceleration Fund for a Māori Infrastructure Fund [CAB-21-MIN
0173 refers.];
46
agree that in addition to the objectives of the Infrastructure Fund the Māori
Infrastructure Fund will have two additional objectives of:
46.1 supporting new housing iwi led delivery models that sustainably
increase Māori housing delivery in the medium to long-term
46.2 enable development on whenua Māori (but not be restricted to whenua
Māori);
Released
Information
47
note investment criteria for the Infrastructure Fund are relevant for the Māori
Infrastructure Fund but before confirming these criteria they will need to be
aligned to investment criteria being developed for Whai Kāinga Whai Oranga;
48
agree to delegate authority to the Minister of Finance, Minister of Housing and
Associate Minister of Housing (Māori housing) to determine final investment
criteria for the Māori Infrastructure Fund;
49
agree that the same rules for eligible projects and costs applied to the
Infrastructure Acceleration Fund be applied to the Māori Infrastructure Fund
with the following changes to enable smaller and rural developments:
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49.1 onsite infrastructure (ie non-enabling infrastructure) including site
remediation, onsite civils and foundations, onsite three waters including
septic tanks is eligible for funding
49.2 no minimum dwelling requirements for projects to enable rural and
smaller developments
49.3 transmission infrastructure and telecommunications infrastructure are
eligible for funding where the costs won’t be met by utility companies
for example rural sites beyond the maximum distance from trunk
infrastructure serviced by utility companies;
50
agree the lead applicants on proposals be Māori entities and housing
providers (including developers and Regional/Tribal Development Entities);
51
agree to a two-path structure for the Māori Infrastructure Fund with the
following paths:
Official
51.1 a ‘project path’ for small scale developments across Aotearoa
51.2 a ‘Iwi programme path’ for multi-year delivery programmes by
Regional/Tribal Development Entities;
the 1982
52
agree that the project pathway will be contestable using an on demand model
opening on 1 July 2021, with proposals prioritised based on investment
criteria with a particular emphasis on readiness balance by place and need.
Act
There is no pre-determined target spend for particular places in this model;
53
note the programme pathway focuses on regional housing delivery co-
under
ordinated by Regional/Tribal Development Entities. The development entities
will be made up by one or more iwi and deliver multiyear programmes of
housing delivery covering a range of tenures and typologies. In many cases
projects will involve multiple funding sources, landowners and other
stakeholders;
54
note Whai Kāinga Whai Oranga funding will support the establishment of
these regional entities through capability and supply funding. We anticipate
the programme pathway to be operational next year;
Information
55
agree that the iwi programme pathway run a closed negotiation model with
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maximum investment (envelopes) allocated to Regional/Tribal Development
Entities in the following areas:
55.1 Te Tai Tokerau
55.2 Tairāwhiti
55.3 Kahungunu
55.4 Taranaki
55.5 Bay of Plenty/Rotorua;
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56
note determining investment envelopes will require discussion with iwi and
Māori partners and further analysis on need and readiness;
57
agree to delegate authority to determine final investment envelopes and the
ability to add further regions to the Minister of Finance, Minister of Housing
and Associate Minister of Housing (Māori housing);
58
agree that developers and landowners do not pay a similar share of the costs
of the infrastructure as would be the case if the project was funded by
traditional means through the local authority;
59
agree that the Ministry of Housing and Urban Development will administer the
Māori Infrastructure Fund;
60
agree that final decisions on investments within the Māori Infrastructure Fund
be made by the Minister of Finance, the Minster of Housing and the Associate
Minister of Housing (Māori Housing);
Official
61
agree that Ministerial decisions be informed by advice from a Chief Executive
lead MAIHI governance group;
62
note that Cabinet agreed that before funds through Whai Kāinga Whai Oranga
the 1982
be spent, key settings be approved by the Minister of Finance, the Minister of
Housing, the Minister of Māori Development and the Associate Minister of
Housing (Māori Housing) [CAB-21-MIN-0116]; Act
63
note that following initial decision making the following Ministers will oversee
Whai Kāinga Whai Oranga delivery:
under
63.1 Associate Minister of Housing (Māori housing)
63.2 Minister of Māori Development
63.3 Associate Minister of Housing (Homelessness);
64
note that the Chief Executive lead MAIHI governance group will enable Whai
Kāinga Whai Oranga Ministers to comment on alignment between Māori
Infrastructure Fund projects and Whai Kāinga Whai Oranga projects;
Information
65
agree to delegate monitoring, reporting and evaluation requirements and any
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further implementation decisions for the Māori Infrastructure Fund to the
Minister of Finance, the Minster of Housing and the Associate Minister of
Housing (Māori Housing);
66
agree to delegate further minor design decisions, technical adjustments to the
settings proposed in this paper, implementation decisions and ongoing
responsibility for monitoring and evaluation relating to the Māori Infrastructure
Fund to the Associate Minister of Housing (Māori Housing);
Kāinga Ora Land Programme
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67
note that the Kāinga Ora Land Programme will enable it to strategically
purchase land to increase the pace, scale and mix of housing developments,
including more affordable housing [CAB-21-MIN-0061 refers];
68
note that officials are currently preparing further advice on the detailed
parameters of the Kāinga Ora Land Programme for approval by the Ministers
of Finance and Housing in mid-June;
Land for Housing Programme
69
note the additional $50 million of funding for the Land for Housing Programme
will allow the Government to acquire land in more places, at prices that will
increase affordable supply, and a wider range of housing tenures;
70
note that Cabinet has authorised the Ministers of Finance and Housing to
agree new programme level targets and investment principles for the Land for
Housing Programme [CAB-21-MIN-0061 refers] that will further refine
Official
priorities for the funding;
Refocused Residential Development Response Fund – the Affordable Housing Fund
71
note that the Residential Development Response Fund was originally
the 1982
established to support residential construction activity during COVID-19, but
that the risk of a potential decline in new house building and construction
sector jobs has not materialised;
Act
72
note that the Residential Development Response Fund will now focus on
supporting the sector to deliver affordable housing for purchase or rent on
under
private land, and that it instead be called the Affordable Housing Fund to more
accurately reflect that purpose;
73
agree to delegate approval of the final details of the design of the Affordable
Housing Fund to the Ministers of Finance and Housing,
74
agree to delegate final approval of the funding decisions for projects to be
supported through the Affordable Housing Fund to the Ministers of Finance
and Housing;
Purpose-built rentals
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Information
75
note that Cabinet sought a report back on how government can further
support increased delivery of high-quality rentals at both market and
subsidised rent, including the impact of the Overseas Investment Act and tax
treatment [CAB-21-MIN-0061 refers], and I intend to provide that report back
in the middle of the year.
Authorised for lodgement
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Hon Dr Megan Woods
Minister of Housing
Hon Peeni Henare
Associate Minister of Housing (Māori Housing)
Official
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under
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Information
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Annex One: Assessment of Auckland-based Large Scale Projects against Infrastructure Fund Investment Criteria
High level criteria Factor for assessment
Analysis
Assessment
Housing benefits of
The number of additional
The large scale projects (LSPs) are expected to provide
Strong – Significant
the proposal (40%)
dwellings that the funding will
build-ready land that will enable the delivery of up to 14,000
increase in housing
– How will the
enable relative to demand in
new additional homes and 4,000 replacement homes on
relative to demand.
proposals, if
that area.
Kāinga Ora land over the next five to ten years.
Official
delivered, contribute
to the housing
The additional infrastructure capacity provided by the funding
outcomes that are
the purpose of the
investments potentially unlocks a further 11,000 homes to be
Fund?
built on privately owned land.
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Overall, the investment is anticipated to enable a net increase
of 25,000 dwellings. Even relative to the large demand for
additional housing Auckland, this would be extremely
significant.
Act
The proportion of lower-cost
Land will be sold for affordable housing, and conditions will
Strong –Typology
under
houses expected to be enabled
be placed on the land to make sure it meets affordable
and ability for KO to
by the infrastructure.
housing outcomes.
set conditions on
lands sales will
11,900 land parcels will be sold for private and affordable
support a relatively
housing, with the exact proportion between affordable and
high proportion of
market yet to be determined.
lower-cost houses.
The redevelopment intensifies neighbourhoods, providing a
range of typologies, including medium density apartments.
The extent to which the location
All LSPs are in central locations, close to the CBD. The LSPs
Strong – High
Information
where housing wil be enabled
are close to jobs, schools and services.
demand areas with
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has unmet demand and
good access to
several jobs and
city amenities.
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High level criteria Factor for assessment
Analysis
Assessment
provides access to amenity and
The LSPs provide for much needed housing supply and
opportunity.
tenure mix. There is high public housing demand, and high
house prices within all the LSPs.
The extent to which the
The proposal would represent one of the largest urban
Strong – Proposal
infrastructure supports
development programmes in New Zealand’s history. Just
is entirely based on
intensification, in particular that
within Kainga Ora-owned land, 4,000 dwellings would be
supporting
required to be enabled by
replaced by 18,000 (net 14,000 dwellings).
intensification.
Official
councils under the National
Policy Statement on Urban
The LSPs are close to rapid transit networks that will be
Development (i.e. typology and
subject to the NPS-UD. Auckland Council is working through
density).
the NPS-UD policies and the impact of the NPS-UD on the
LSPs is yet to be determined.
the 1982
Both Māngere and Mt Roskil have land along the proposed
Light Rail Corridor route. This provides opportunities to align
priorities, such as potentially further increase density and
align central government investment with other priorities.
Act
The extent to which the proposal Redevelopment is on Kāinga Ora owned land.
Fair
under
supports housing development
on land owned by Māori and to
However, through the development process, iwi will have
which mana whenua have been
opportunities to purchase the super lots at market rates,
involved in developing the
allowing iwi to develop capability and support the
proposed solution.
achievement of Māori aspirations more generally.
The extent to which the proposal Transportation is generally the highest source of emissions. A
Strong – Good
supports housing development
high proportion of these emissions are due to the use of
public and active
that is environmentally
private petrol and diesel vehicles. In the large scale project
transport links,
sustainable including through
areas:
minimal
Information
reduced private vehicle use,
environmental
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lower risks from climate change
-
the focus is on adding homes in areas that are well
impact and good
(such as coastal inundation),
serviced by public transport and where much of the
climate resilience.
day-to-day activities can take place locally (including
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Information
Official
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High level criteria Factor for assessment
Analysis
Assessment
Kāinga Ora continues to work with its build partners to deliver
the affordable and market housing on surplus Kāinga Ora
land.
All the LSPs are in desirable locations close to employment
and amenities, and developer interest is expected to be high.
Demonstrated alignment
Auckland Council has identified the LSPs as one of three
Strong – Developer
Official
between all parties including
priority areas for growth within the Long-Term Plan.
and Council well-
Territorial Authorities, Regional
aligned on projects.
Councils, mana whenua and
At an operational level, Kāinga Ora and Auckland Council has
developers needed to advance
spent the last two years identifying and costing 400+ projects
the
the housing development.
within the LSPs.
1982
Kāinga Ora work with mana whenua as build partners in the
sale of land of Kāinga Ora land for private development. This
is an opportunity for iwi in Tāmaki Makaurau to build capacity
and capability in housing development, as well as achieve iwi
Act
aspirations.
Confidence in the ability of all
Confidence that Kāinga Ora can deliver the programme.
Strong/Fair –
under
parties to deliver the
Kainga Ora
infrastructure and housing as
Infrastructure projects have been jointly identified and scoped readiness and
proposed.
with Auckland Council. Kāinga Ora is ready to deliver, with
capability well
many of the projects being shovel ready.
validated.
In May 2020, NZIER has assessed Kāinga Ora’s capacity to
undertake this work and determined there is a high degree of
confidence that Kāinga Ora can deliver.
Some of the network infrastructure projects require Auckland
Council to deliver, and further work needs to be undertaken to
Information
assess their capacity and capability to do so.
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under
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under
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Information
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Document Outline