KiwiBuild has been tweaked to allow up to a quarter of unsold homes into the open market, and a $350 million fund has been set up to support the residential construction sector hit by COVID-19.
Housing Minister Megan Woods is making further refinements to the KiwiBuild programme, so that up to 25 percent - up from 15 percent - of KiwiBuild homes that don't sell to people who fit the criteria, can be sold on the open market.
Unsold KiwiBuild homes can now also be sold to progressive home ownership providers, community housing providers, and if the home is suitable, to Kāinga Ora for public housing.
"Following engagement with the sector on what's needed to ensure we continue to deliver affordable housing, we are making further refinements to the KiwiBuild settings," Dr Woods said in Auckland on Friday.
"We simply must not lose sight of the importance of opening up home ownership as we recover from COVID-19."
Dr Woods also announced a new $350 million Residential Development Response Fund to support the sector and to minimise the economic impact from COVID-19.
It comprises $100 million from the Government's $50 billion COVID-19 Response and Recovery Fund and $250 million of repurposed funding from KiwiBuild following the programme's reset in 2019.
Dr Woods said the majority of the funding will be recycled and returned to the Crown over time.
"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," she said.
The Government will share some of the increased risk associated with COVID-19 by backing developments through underwrites - either purchasing unsold houses from developers or topping up any shortfall, depending on the contract.
"We know from talking to the building sector there is a relatively solid pipeline of construction activity until the end of the year, but the outlook beyond that is unclear," Dr Woods said. "Providing assurance through the fund will ensure developers can keep building homes, and workers employed."
Dr Woods said the Government is trying to save New Zealanders from a slow economic recovery by helping the construction sector keep busy.
"The post-GFC economic recovery was slow and difficult, so we are determined to do things differently. The measures I'm announcing today will help avoid a repeat of the worst impacts that the GFC had on jobs and housing," she said.
"This new fund will sit alongside our KiwiBuild programme which is continuing to prioritise a pathway to home ownership for first home buyers."
So far, 452 KiwiBuild homes have been completed. A total of 589 KiwiBuild homes have been sold with a further 1051 under construction.
Between 1 November 2017 and 30 June 2020, the total number of public housing places increased by 5103, of which 3981 were new builds. The number of transitional housing places available for tenanting has increased by 1516 to 3234.
Labour's flagship KiwiBuild programme promised 100,000 houses in 10 years, but with just 258 houses built as of September 2019, the policy was 'reset' - the targets were dropped and it shifted towards progressive home ownership.
The Government's Progressive Home Ownership scheme was launched last month. It allows charities that assist lower income renting households become homeowners through shared ownership schemes to access a $400 million fund.
On top of progressive home ownership, the revamped KiwiBuild included changes to the requirements for a KiwiSaver HomeStart grant. The deposit requirement was reduced from 10 percent to 5 percent.
The National Party has promised to scrap KiwiBuild if it's elected in September.