New Infrastructure Bill Targets Bottlenecks to Accelerate Housing Development

The introduction of the Infrastructure Funding and Financing Amendment Bill represents a major milestone in the Government’s housing reform agenda.

 

The Government has taken another significant step toward speeding up housing delivery, infrastructure construction, and urban development with the introduction of the Infrastructure Funding and Financing (IFF) Amendment Bill to Parliament. Housing Minister Chris Bishop and Infrastructure Under-Secretary Simon Court say the changes will modernise how critical infrastructure is funded and help unlock housing projects currently stalled by local government bottlenecks.

Modernising a Key Tool for Housing Growth

Minister Bishop says the original Infrastructure Funding and Financing Act was designed to replicate the success of the Milldale development, where developers overcame council funding constraints by independently financing essential infrastructure. This model allowed homes to be built far more quickly than traditional local government financing structures permitted.

“The Act enables the financing of growth infrastructure upfront, then levies the properties benefiting from that development,” Bishop explained. “It allows development to move ahead without being constrained by council balance sheets.”

However, despite its potential, the Act has been severely under-used. Only two IFF levies have been authorised since its introduction — far below expectations.

Removing Barriers and Strengthening the System

The Amendment Bill directly targets the obstacles that have hindered the Act’s uptake.

“We’re making it more viable and flexible so councils and developers can get on with building the infrastructure our growing communities need,” Bishop said.

Key improvements include:

• Removing unnecessary bureaucratic barriers that have slowed applications

• Broadening the scope of eligible projects

• Strengthening certainty for developers by requiring agencies to endorse proposals when legal criteria are met

• Allowing levy deferrals to ease affordability concerns for homebuyers

• Multiple technical refinements to make the Act more accessible and easier to use

These changes form a critical part of Pillar 2 of the Government’s Going for Housing Growth Programme, which focuses on fundamentally improving how infrastructure is funded and financed in New Zealand.

Ending the Ability for Councils to Stall Projects

A standout reform is the removal of what the Government describes as “veto points” within the existing system.

Under-Secretary Simon Court says some councils and agencies have previously been able to stall developer-led proposals simply by refusing to sign off on elements required for approval — even when proposals met all legislative requirements.

“Developers using this tool cannot be held hostage by councils or infrastructure agencies,” Court said. “If the legal requirements are met, endorsement must follow. That means faster decisions, fewer vetoes, and more developer-led infrastructure projects being built.”

The change is expected to make IFF a far more effective option for unlocking growth.

Expanding Eligibility to Major National Infrastructure Providers

Currently, IFF projects must be led by councils or developers. The Amendment Bill expands eligibility to include:

• New Zealand Transport Agency (NZTA)

• KiwiRail

• New water service organisations being created under national water reforms

This will allow the IFF model to be applied to large transport corridors, rail links, and water infrastructure — all essential components of housing and community development.

Court says the change will help accelerate “key growth projects already in the infrastructure pipeline, while ensuring that those who benefit from the infrastructure pay for it.”

A More Flexible, Future-Focused Funding Toolkit

The amendments complement the Government’s newly released development levy proposals, which are currently open for public consultation. Together, the two reform packages are designed to reshape how New Zealand funds both planned and unplanned infrastructure required for new housing.

“These changes play a key part in delivering Going for Housing Growth,” Bishop said, “by contributing to a stack of infrastructure tools that ensure growth pays for growth.”

Supporting Housing Supply Across New Zealand

The Government argues that slow, inconsistent, or underfunded infrastructure delivery has been one of the major drivers behind the housing shortage. Developers often face long delays while waiting for councils to fund or build essential infrastructure such as roads, pipes, and public services.

By modernising the IFF system and ensuring agencies cannot delay compliant proposals, the Government aims to:

• Unblock major housing developments

• Encourage more private-sector leadership in infrastructure

• Deliver infrastructure sooner

• Provide more certainty for developers

• Reduce long-term pressure on council finances

A Key Step Toward Breaking the Housing Logjam

The introduction of the Infrastructure Funding and Financing Amendment Bill represents a major milestone in the Government’s housing reform agenda. As communities grow, the demand for infrastructure is intensifying — and the Government says the status quo is no longer viable.

By broadening access, enhancing flexibility, and removing roadblocks, the new Bill seeks to give developers and infrastructure providers the ability to progress projects at pace, ultimately helping to increase housing supply nationwide.