The second round of applications for the Build Ready Development pathway are now open. Residential developers can check the criteria and priorities, and then apply through the Ministry of Housing and Urban Development (HUD) website https://www.hud.govt.nz/our-work/build-ready-development-pathway.

Matt Fraser, Head of Land Acquisition and Development says the Build Ready Development pathway will support developments that might not otherwise proceed, in regional areas of high unmet housing need. “This second round will prioritise applications from regional areas that have been impacted by recent weather events including Te Tai Tokerau, Hawke’s Bay, Tairāwahiti and Bay of Plenty.

“The Build Ready Development pathway provides developers who have eligible, build-ready developments in regional areas of high unmet housing need with two routes to Government support. This can be either by referring requests to sell ‘build-ready’ land to a suitable Government land acquisition programme or by the Government agreeing to prepurchase or underwrite homes off-the-plans, which provides support to unlock third party finance and keep the development moving,” says Matt Fraser.

This second round represents $159 million of funding and all developments must include affordable housing. Final decisions on prepurchase or underwrite commitments will be made jointly by the Minister of Housing and Minister of Finance.

The pathway helps delivery of affordable housing supply through supporting developments that, due to the changing market conditions, are unable to progress.

Matt Fraser says developers applying for underwrite or prepurchase commitments need to have resource consent, own the land, be ready to start the build within six to 12 months and have a valid reason why the development has stalled. “We’re looking for truly ‘build-ready’ developments in regional Aotearoa and to work with developers that can provide full financial feasibility studies and evidence of discussions with banks or lenders to put through our fast-track investment process. This means we can help deliver public and affordable housing in these challenging times, where we need it the most,” says Matt Fraser.

Applications will remain open until 4pm Friday 16 June.

Media contact including requests for interviews: Tony Wallace Mobile: 021 2289547 or email: media@hud.govt.nz

Note to Editors

Round One projects

• Six projects in Manurewa in South Auckland, Ngāruawāhia, Hastings, Waikanae, Levin and Waiwhetū in Lower Hutt have been contracted for a $59.4 million investment to deliver 107 homes, with expected completion of some of the homes starting from later this year.
  • 28 homes have been pre-purchased and are planned to be on-sold for public housing;
  • 10 will be sold as KiwiBuild homes and offered to eligible KiwiBuild buyers;
  • 60 homes are supported with a BRD underwrite and will be sold to the open market
  • 9 homes did not need to be underwritten but have been enabled by underwrites on other homes in the development.
• Two further projects have been approved but are not yet contracted: one in Tauranga (seven homes) and one in Napier (30 homes) taking the number of homes unlocked to 144 under the programme.

Criteria

Developers applying for prepurchase commitments or underwrite agreements must:

• already have resource consent for the development
• own the land or have an unconditional agreement to own the land for the development
• be ready to start construction with 6-12 months but not have commenced construction already
• have a valid reason that the development has stalled
• be building affordable homes in the development (telling us how many homes are either at, under or over the relevant KiwiBuild price caps for the region)
• be an experienced developer with a track record of success in building new housing in Aotearoa New Zealand
• provide transparent and detailed financial feasibility information
• provide evidence of third-party finance arrangements such as written indication from their bank or lender on the requirements to unlock development finance
• must be developing more than six homes (net).

Prioritising applications

When we are assessing applications for prepurchase or underwrite commitments, we will prioritise developments that align with Government priorities.

We will prioritise funding for developments that:

• are in areas with the highest need for public and affordable housing supply. This means:
  • we will prioritise assessment for developments in regional New Zealand that have been affected by recent severe weather events, with flexibility to consider developments from other regions. Some of these areas are already included as part of our place-based approach to housing. This approach recognises that every community has its own housing and urban development challenges and opportunities
  • currently we will not prioritise assessment for applications within the main urban centres
• significantly contribute to better housing outcomes for the people who need it most, including housing outcomes for whānau Māori
• contribute to saving, maintaining or creating jobs in the construction sector in that location, and
• deliver significant benefits to the public for the Crown investment.

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