The Government is establishing a $350 million Residential Development Response Fund to support the housing and construction sector.
The fund is aimed to try and minimise the economic impact from Covid-19.
“The Residential Development Response Fund will help to progress stalled or at-risk developments that support our broader housing objectives such as ensuring the supply of affordable housing and providing jobs,” Housing Minister Megan Woods said today.
The fund will be used by backing developments through Government underwrites.
“Providing assurance through the fund will ensure developers can keep building homes, and workers employed. It’s estimated the fund will maintain around 15,000 jobs and the building of around 4000 new homes that otherwise might not be built because of barriers to developers securing finance," Ms Woods says.
The Fund comprises $100 million from the Covid-19 Response and Recovery Fund and $250 million of redirected funding from the KiwiBuild appropriation following last year’s reset. The majority of the funding will be recycled and returned to the Crown over time.
The new fund will sit alongside the troubled KiwiBuild programme, which Ms Woods says is having "further refinements" made to it after a reset last year.
The new KiwiBuild settings will have more flexibility so that where an eligible buyer has not been found, the programme will allow:
• KiwiBuild homes to be sold to progressive home ownership providers, community housing providers, and if the home is suitable, to Kāinga Ora for public housing.
• Up to 25 per cent (from 15 per cent) of KiwiBuild homes in an underwritten development may be sold on the open market to further incentivise lenders and developers to keep delivering new housing.