The Government has lodged the documents to establish a new company, Crown Infrastructure Partners Ltd, to support development without breaching local council debt constraints.
Auckland Council has been tiptoeing just below its debt:revenue ratio limit of 265%, and put the concept to the Government of a special purpose vehicle to fund infrastructure in a way that recognises those debt constraints.
Instead of the council funding infrastructure for new development, it will come from the Crown company. Auckland mayor Phil Goff said yesterday this would enable construction of 23,300 homes in the north & south of the region to be brought forward.
Mr Goff said the announcement was made at Drury, in South Auckland, because that was likely to be the first place the new funding would be used, for 700 homes.
Mr Goff said: “The initial investment of $387 million in transport & water infrastructure in Drury South & West, Paerata & Pukekohe will enable the construction of 17,800 dwellings much earlier than would otherwise be the case.
“A further major development will be around Wainui in north Auckland, with $201 million in infrastructure funding required for an additional 5500 dwellings.
“The new investment vehicle will provide capital from the Government & the private sector which will not be debt on the council’s books. It will be funded through development contributions & targeted rates within the new housing developments.
“Auckland is growing by 45,000 new residents/year and requires unprecedented levels of infrastructure growth to keep up with demand. Increasing the supply of housing is a critical part of overcoming our housing shortage and slowing price rises caused by demand exceeding supply of housing.
“The new unitary plan ensures there is adequate land – greenfield & brownfield – to meet demand, but infrastructure servicing that land is necessary for homes actually to be built.
“Special purpose vehicles are another tool in our toolbox to enable us to lift the scale & pace of new housing development.”
Attribution: Mayoral release.