New Zealand Streamlines Infrastructure Funding to Support Housing Growth

New Zealand has passed new legislation designed to make it easier to finance the infrastructure needed for housing developments, with the Government saying the reforms will help accelerate home building and support economic growth.

The Infrastructure Funding and Financing Amendment Bill, approved by Parliament, introduces changes that give councils, developers and infrastructure providers more flexible ways to fund major projects without placing additional pressure on council borrowing.

Housing Minister Chris Bishop said the reforms are part of the Government's Going for Housing Growth programme, which focuses on removing barriers that have slowed residential development and limited the supply of new homes.

Private investment to help fund growth

A major challenge facing many councils is that while developers are ready to build new housing, local authorities often lack the borrowing capacity to provide the roads, water networks and other essential infrastructure needed to support new communities.

Under the Infrastructure Funding and Financing Act, private investors can finance infrastructure projects upfront and recover their investment over time through levies paid by the properties that directly benefit from those services.

The model was inspired by the successful Milldale development north of Auckland, where private infrastructure financing helped unlock thousands of new homes. Despite that success, only three levies have been approved under the legislation because the existing process was considered too complex and difficult to use.

The amendments are intended to simplify the system by reducing administrative hurdles, speeding up approvals and making the financing model more attractive for future developments.

Wider range of projects now eligible

The updated legislation expands the types of projects that can be funded through the scheme. In addition to local infrastructure, it will now support transport projects delivered by the New Zealand Transport Agency (NZTA) and KiwiRail, as well as water infrastructure managed by the country's new water service organisations.

Parliamentary Under-Secretary Simon Court said the reforms also allow operational and maintenance costs to be funded through levy revenue, encouraging infrastructure providers to consider the long-term performance and value of projects rather than focusing only on construction costs.

The changes are expected to improve the financial sustainability of infrastructure projects while making the funding model more attractive to investors.

Faster approvals to support new housing

The legislation also limits the ability of councils and other infrastructure authorities to unnecessarily delay qualifying proposals, providing developers with greater certainty and reducing project timeframes.

The Government believes the streamlined approach will encourage wider use of the Infrastructure Funding and Financing Act, helping deliver more roads, transport links and water services needed for growing communities.

Officials say the reforms will make it easier for growth to fund the infrastructure it requires, allowing more homes to be built while supporting jobs, economic activity and better long-term planning for New Zealand's expanding cities and towns.