More measures to build more affordable homes
First home buyers and renters are set to benefit from measures getting underway to support more new affordable homes for people and their whānau, says Housing Minister, Dr Megan Woods.
“Since we came into Government, we have been hitting the housing crisis we inherited with initiatives to get new housing underway, and it’s starting to work. We’re seeing the green shoots of change with a busy construction sector and record numbers of residential building consents – a 66% increase since 2017*.
“Our massive investment in infrastructure like pipes and roads to enable new housing is starting to roll out, and urban development changes we’ve made to allow more homes to be built is seeing a big increase in new developments.
“The initiatives I’m announcing today will continue the strong pipeline of building activity and support thousands of jobs, resulting in more affordable homes for first home buyers, as well as for renters on low to moderate incomes.
“Not-for-profit groups looking to develop new rental homes for households on lower incomes that stay affordable over the long-term, can start the application process for the first tranche of funding available from the $350 million Affordable Housing Fund announced in Budget 2022.
“The first $50 million of this fund is targeted to rental developments for lower income people who cannot afford a market rent but can’t access public housing. This will make projects to develop and sustain new affordable rental housing financially viable.
“We’re making it available in areas with high need for affordable rentals including:
- Tauranga-Western Bay
- Wellington metro (including Wellington, Porirua, Lower Hutt, Upper Hutt and Kapiti), and
“Our Progressive Home Ownership Fund is giving people who would not otherwise be able to own their own homes, the chance to do so with support like budgeting training and getting a deposit together.
“We have approved more contracts with not-for-profit providers to develop another 183 new affordable homes across the country, including:
- 145 homes across Mangere, Papatoetoe, and Ōmokoroa, by NZ Housing Foundation
- 15 homes in Waipā, by Bridge Housing Trust
- 11 homes in Tauranga, by Doing Good Foundation
- 4 homes in Palmerston North, by Homes for People Trust
- 8 homes in Queenstown, by Queenstown Lakes Community Housing Trust.
“We’re also keeping up the momentum of KiwiBuild developments by ensuring the rising costs facing the construction sector are addressed through price cap changes, along with changes to income caps to keep pace with the market,” Megan Woods said.
“Another important change is allowing exemptions for price caps for larger family groups and for those with accessibility needs.
“These changes will allow developers and Kāinga Ora to deliver more KiwiBuild homes, as well as other market homes that we’ll expect to see on the ground in 2023/24,” Megan Woods said.
Notes to Editor
* Building consents have been at record highs, with 51,015 residential building consents in the year to May 2022. This compares to 30,645 consents in the year to May 2017 – a 66% increase under this Government.
Affordable Housing Fund
The $350 million Affordable Housing Fund will support the development of affordable homes for low-to-moderate income people and whānau, to rent or to buy.
The first round of the Affordable Housing Fund is targeted at rental developments for those people who struggle to meet the cost of a market rental but can’t access public housing. Registrations are open until 24 August 2022. For more information go to hud.govt.nz/affordable-housing-fund
Progressive Home Ownership Fund
The Progressive Home Ownership Fund helps individuals and whānau who would otherwise be priced out of home ownership. Providers often develop new homes themselves and work with applicants to improve their financial literacy and budgeting to sustain a mortgage on an affordable house
So far, five PHO providers have been contracted to build 227 homes across the country. 78 are completed with families and whānau moved in, and a further 38 are under construction. Other homes are in the planning and consenting process.
Under Kāinga Ora’s First Home Partner pathway, launched in October 2021, 405 applicants are now eligible to go through the next steps in the process, and 41 individuals and whānau have bought their first home.
For more information about the PHO Fund, visit https://www.hud.govt.nz/residential-housing/progressive-home-ownership/progressive-home-ownership-fund/
KiwiBuild involves the Government underwriting a portion of homes in new residential developments, to unlock development funding and bring forward construction dates. In return, participating developers agree to sell the underwritten homes at or below the KiwiBuild price caps.
So far 1,380 KiwiBuild homes have been built, with 1,223 under construction.
The key changes to KiwiBuild settings include:
- Increasing KiwiBuild price caps to reflect the current market and encourage the delivery of more KiwiBuild homes for purchase.
- Introducing a new income cap category for individual applicants with dependents, with an income cap of $150,000. This is consistent with recent changes to First Home Products and recognises that individual applicants with dependents may need to purchase a larger KiwiBuild home, which requires a higher income to afford.
- Lifting the income cap for multiple buyers from $180,000 to $200,000 to reflect the higher cost of KiwiBuild homes – particularly those with three bedrooms or more.
- Allowing exemptions to the price caps for homes with four or more bedrooms or those which meet accessibility / universal design standards to encourage the delivery of more of these homes to better cater to larger, potentially intergenerational families which are common in Māori and Pacific communities and for those with accessibility needs.
The KiwiBuild changes will also support the Government to deliver KiwiBuild homes within Kāinga Ora developments (including its Large-Scale Projects in Auckland and Porirua) and through the Land for Housing Programme. Please visit the KiwiBuild website for more information: https://www.kiwibuild.govt.nz/kiwibuild-eligibility/
|1 Bed/studio||2 Bed||3 Bed|
|Region||Previous Cap ($)||New Cap ($)||Previous Cap ($)||New Cap ($)||Previous Cap ($)||New Cap ($)|
|Major Urban Centres*|
|Hamilton Urban Area||500,000||550,000||500,000||640,000||500,000||715,000|
|Tauranga Urban Area||500,000||550,000||500,000||740,000||500,000||780,000|
|Wellington Urban Area||500,000||580,000||500,000||760,000||550,000||850,000|
|Christchurch Urban Area||500,000||550,000||500,000||640,000||500,000||715,000|
|Rest of NZ|
|All remaining territorial authorities||500,000||550,000||500,000||640,000||500,000||715,000|
- These price caps are designed to incentivise KiwiBuild developments in key regional urban centres where they are needed across New Zealand. The Minister of Finance and Housing will approve all KiwiBuild development underwrite proposals, mitigating the risk of KiwiBuild developments proceeding in locations that are not a priority for KiwiBuild delivery.
- All locations are based on local authority boundaries with the following exceptions:
- Hamilton Urban Area: Hamilton City, Waipā District, Waikato District
- Tauranga Urban Area: Tauranga, Western Bay of Plenty District
- Wellington Urban Area: Kāpiti Coast District, Upper Hutt City, Porirua City, Lower Hutt City, Wellington City
- Christchurch Urban Area: Waimakariri District, Christchurch City, Selwyn District