“This can be either by referring requests to sell ‘build-ready’ land to a suitable Government land acquisition programme or by the Government agreeing to pre-purchase or underwrite homes off the plans, which provides support to unlock third party finance and keep the development moving,” says Mr Fraser.
This second round represents $159 million of funding and all developments must include affordable housing.
The pathway helps delivery of affordable housing supply through supporting developments that, due to the changing market conditions, are unable to progress.
Mr Fraser says developers applying for underwrite or pre-purchase commitments need to have resource consent, own the land, be ready to start the build within six to 12 months and have a valid reason the development has stalled.
“We’re looking for truly ‘build-ready’ developments in regional Aotearoa and will work with developers that can provide full financial feasibility studies and evidence of discussions with banks or lenders to put through our fast-track investment process. This means we can help deliver public and affordable housing in these challenging times, where we need it the most.
“The Build Ready Development pathway supports these economic times, where we try to take the boom-bust out of it and smooth it out to get developments moving forwards.
“We’ve got high unmet housing need, we’ve got softening sales which is impacting on the pre-sales levels that are required to get funding for these developments and we’ve got situations where developers are all but ready to go but they’re reliant on some level of pre-sales to get access to funding.
“We want to support those developments that will provide affordable homes, to keep them going forward so that the developers can get on and do what they do best. In the meantime we can provide them with some certainty and get them access to funding by providing either underwriting or pre-purchase at the levels that the bank can then provide the finance,” Mr Fraser says.
“We will then find a place for those houses once complete, whether it be progressive home ownership or community housing provision or available to first-home buyers through KiwiBuild, as an example.”
In terms of Build Ready development, round two is focused on Cyclone Gabrielle and weather-affected regions.
Round one last year included six projects in Manurewa in South Auckland, Ngāruawāhia, Hastings, Waikanae, Levin and Waiwhetū in Lower Hutt. These have been contracted for a $59.4 million investment to deliver 107 homes, with expected completion of some of the homes starting from later this year.
Applications for round two opened on Monday May 29 and close on Friday June 16.
