New infrastructure funding model unlocks Auckland’s housing crisis
A pilot scheme to accelerate infrastructure for housing was announced by the New Zealand Government on Tuesday, with MinterEllisonRuddWatts advising ACC as the debt provider on the new model developed by Crown Infrastructure Partners.
The scheme will see third party debt raised by a Crown Infrastructure Partners ‘special purpose vehicle’ which will be used to finance the roads and water infrastructure needed to unlock land for development in Milldale, north of Auckland. The development will be done by Fulton Hogan Land Development Limited.
“The project is an important milestone in funding and delivering much needed infrastructure across New Zealand,” says Tom Fail, finance and infrastructure partner at MinterEllisonRuddWatts.
“With the use of third party financing, bulk infrastructure development can be accelerated, providing much needed houses and an answer to New Zealand’s supply and demand challenge created by strong growth.”
The new finance model will see home owners in the new subdivision ultimately funding the cost of the infrastructure via an annual infrastructure payment.
“If councils and developers can access third party finance, backed by long term and certain funding streams, infrastructure investment can be brought forward at scale and pace, which is critical to delivering enough homes to meet growth,” says Tom Fail.
“The financing model – or variants of it – could also be applied more widely to address New Zealand’s broader infrastructure needs.”
Janine Brennan-Lynch, Marketing Communications Manager
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