Hamilton Mayor Paula Southgate says a new funding approach offers high-growth cities like Hamilton another option to enable more housing, faster.
Urban Development Minister Phil Twyford today announced legislation enabling a new infrastructure funding tool will be introduced into Parliament. It will allow councils to access private capital to get infrastructure built sooner.
Mayor Southgate has welcomed the tool, noting Hamilton has worked hard behind the scenes to help officials develop an innovative solution to a complex funding issue.
“Hamilton’s already partnering with Government to deliver a 10-year, $2 billion programme to support the growth in our city.
“But being unable to move beyond traditional funding methods either puts huge pressure on our ratepayers, or stymies growth completely. And for Hamilton and other high-growth areas, standing still is simply not an option; we have to respond to the huge demand for housing,” she said.
“We’re opening Peacocke, a whole new neighbourhood in the south that will be home for 20,000 new Hamiltonians. But Peacocke took 30 years to get off the ground because the city simply couldn’t afford to fund the necessary infrastructure without the government loan.”
“Today’s announcement means we may have another funding option and we welcome that. It’s one which could allow councils to bring forward infrastructure programmes which otherwise could be decades away.”
Minister Twyford said efforts by high-growth areas of Auckland, Hamilton, Tauranga and Queenstown to develop land for housing are restricted by a lack of supporting infrastructure. Funding constraints for councils within their debt strategies is one of the main bottlenecks to getting that infrastructure built.
The new tool means finance for the infrastructure project would be raised through a stand-alone entity (a Special Purpose Vehicle or SPV). Funding for the project would be through a levy paid by those who are expected to benefit from the infrastructure project. The tool means the debt costs associated with the projects are ring-fenced from the council’s balance sheet.
The levy is separate to the council’s general rate and reflects the cost of the infrastructure is funded by those who benefit from it.
Mayor Southgate said Hamilton would welcome the opportunity to discuss how the new approach could help the city and has asked Council officials to work closely with people in Wellington.
“Hamilton City Council hasn’t committed to anything. But with Peacocke and Rotokauri North, we have two housing development areas ready to go which could potentially benefit from a tool like this.”