Housing and Urban Development Minister Phil Twyford’s extolling the virtues of public-private partnerships in announcing the $91 million funding of infrastructure to support building of 9,000 new homes in Wainui, north of Auckland.
A feature of the project will be that it will include an “infrastructure payment” collected from section owners through Auckland Council rates bills. There’s no indication at this stage how much the payment will be.
“The Milldale project is an example of the innovative new approaches to financing infrastructure that the Government is developing through the Urban Growth Agenda,” Twyford says.
“This funding model can be used in other high growth areas affected by the housing crisis to help more houses to be built more quickly.
“This could include private investment in infrastructure funded by a charge on the properties that benefit from the infrastructure.
“This new infrastructure funding model will result in a large number of homes being built much sooner than otherwise would have been the case.
“One of the major road blocks to our towns and cities growing is the lack of ready access to finance for the infrastructure that allows for new urban growth, for green or brownfields developments,” Twyford says.
The infrastructure for the housing development’s being done through a Government Special Purpose Vehicle (SPV) created in partnership with Auckland Council, Crown Infrastructure Partners and Fulton Hogan Land Development.
Twyford says the Milldale project demonstrates an approach to funding that allows private investment in new infrastructure with the debt sitting on a balance sheet that is neither the Council’s or the Government’s.
Auckland’s Mayor Phil Goff says the project enables nearly 4,000 new dwellings in Milldale and the infrastructure can support another 5,000 dwellings in the surrounding areas. “It’s a big step towards meeting Auckland’s housing needs,” he says.
Fulton Hogan Land Development has already started work on the Milldale development at Wainui. The infrastructure being funded will support the Milldale development and will also enable another 5,000 homes to be built nearby, with $33.5 million funding for this being provided by Auckland Council.
Crown Infrastructure Partners has secured long-term fixed-rate debt from Accident Compensation Corporation. The SPV will be funding $48.9 million towards the infrastructure, with the Crown contributing less than $4 million.
The SPV funding will be repaid over time partly by Fulton Hogan Land Development and partly by section owners as an ‘infrastructure payment’ collected with Council rates bills.
Twyford says this new model of infrastructure financing means that long term debt can be raised through the SPV to enable the building of large scale infrastructure, which is needed to step up the rate houses being built, and to assist Councils who are nearing their debt limits.
He says the Milldale development will be a modern, contained urban development with green spaces and parks, a town centre, cycleways and walkways, and potentially education facilities, and will be connected to the Northern busway.
Fulton Hogan Land Development in conjunction with a joint venture partner has previously developed Millwater, on the eastern side of the northern motorway and sees Milldale “as the next evolution of this urban development”.