By Pattrick Smellie
Sept. 4 (BusinessDesk) - Large-scale institutional investors and infrastructure developers will be eligible to propose 'build-to-rent' developments under one of the new elements of the revamped KiwiBuild scheme, announced by Housing Minister Megan Woods today.
Woods confirmed after her press conference announcing the long-awaited KiwiBuild 'reset' that such projects were likely to be high density, urban developments and that there could eventually be a rent-to-own option that could see a mixture of rented and owner-occupied dwellings.
The newly created Urban Development Authority/Kainga Ora, whose doors open on Oct. 1, will coordinate the "mix of public housing, market-priced homes and KiwiBuild homes" across New Zealand, with an emphasis on building "where there is a clearly identified demand and need."
Woods announced today that the government will take back from private developers some 461 KiwiBuild homes that have failed to sell in Wanaka (211), Te Kauwhata (175) and Canterbury (75), with a combined underwrite value of $207 million, or $114 million, $73 million and $20 million respectively.
Asked whether the government might make a loss on those houses, Woods said: "We haven't taken a haircut on any sales in KiwiBuild and we don't expect to here."
For example, homes in Wanaka of the same design, but not badged as KiwiBuild, had been selling profitably, she said.
Funds from the sale will be recycled back into the $2 billion KiwiBuild revolving fund.
Infrastructure provider Infratil, for example, has looked in the past at whether it could build affordable housing covered by government schemes but has, to date, decided against involvement.
Today's other key announcement was to earmark $400 million of the KiwiBuild fund to fulfil the government's 'progressive home ownership' pledge to the Green Party under its confidence and supply agreement that supports the Labour-led government's parliamentary majority.
Woods said the policy detail was still being worked through and would go to Cabinet before decisions by the end of this year for implementation next year.
Progressive home ownership could take various forms, she said, nominating "rent-to-buy" and "shared equity" as options.