Auckland’s 34,000 new-builds trigger infrastructure questions

A Government announcement that a Crown land and building programme will see tens of thousands of new houses built in Auckland over the next decade has triggered questions over funding of overdue infrastructure upgrades.

Social Housing Minister Amy Adams announced on Tuesday that the Government’s Crown Building Project will replace 8300 old, rundown houses in Auckland with 34,000 brand new purpose-built houses over 10 years. 24,300 of these will be built by Housing New Zealand through their Auckland Housing Programme.

Over the next ten years, the Crown Building Project will deliver around:

  • 13,500 newly built social houses
  • 20,600 new affordable and market homes.

Phase one of the Auckland Housing Programme, which covers the next four years, will cost $2.23 billion and will be funded through Housing NZ’s balance sheet and new borrowing of $1.1 billion that the Government has approved as part of the business case.

However, the announcement has prompted questions about how the requisite infrastructure to support the new housing will be funded. Stephen Selwood, Chief Executive of Infrastructure New Zealand, noted: “Auckland’s transport networks are bursting at the seams and all projections are that congestion will get much worse… Infrastructure is urgently needed to address the backlog and accommodate new growth.”

He warned that the Government’s announcement adds a NZ$1 billion bill to a council which is “already at the limit of what it can borrow”.

“If new development triggers the need for regional scale infrastructure like light rail or a new busway, the cost to the Auckland Council will easily be two, three or four times this figure”, said Mr Selway.

“The Government earlier this month signalled it was going to come to the party with an $11 billion commitment to infrastructure through Budget 2017, but it is still not clear how the Auckland Council will meet its growth obligations,” he added.

To address the burgeoning infrastructure challenge, Infrastructure NZ advises the following interim measures be taken:

  • Prioritise housing development next to train and busway stations
  • Invest in traffic light optimisation and intelligent traffic management systems
  • Rapidly develop park and ride facilities
  • Streamline planning consents for power, water, telecommunications and social infrastructure that support the developments
  • Recycle capital tied up in existing assets into new infrastructure
  • Enable urban development agencies to rezone, acquire and aggregate land and use the increased value to fund infrastructure
  • Expand private investment in infrastructure through PPPs and large scale development opportunities
  • Introduce road pricing sooner rather than later to both manage demand and generate revenue to pay for transport infrastructure