Prime Minister Jacinda Ardern has poured cold water on National's proposal to give councils a $50,000 grant for every new house they consent above their five-year average.
The idea is proposed in a Member's Bill put forward by National leader Judith Collins, designed as an alternative way for the Government to spend its $3.8 billion Housing Acceleration Fund announced last month.
The fund, intended to help councils pay for roads, pipes and other infrastructure, was announced among a raft of tax changes and deposit assistance eligibility tweaks, to try and help bring down ballooning house prices.
Housing Minister Megan Woods said after talks with local councils, it was clear investment in "critical but costly infrastructure" - such as roads and pipes - was seriously lacking, and no one had been prepared to step in and fill the expensive gap.
That's why the multibillion-dollar fund is being introduced, she said, to boost infrastructure on Government-owned land and in areas where councils can demonstrate both housing need and willingness for momentum to increase new-builds.
But details are scarce. The Ministry of Housing and Urban Development website has an A4 PDF document available to read. Dr Woods had to issue a correction in Parliament after saying there was a "substantial body of work" about it available online.
Dr Woods says she will be taking a paper to Cabinet by the end of June and further announcements will follow. In-principle decisions have been made and work is "well underway" to understand what projects could be funded.
Collins says New Zealanders can't keep waiting, especially after new Real Estate Institute data shows house prices increased by $96,000 in the past two months alone.
National's proposal also includes a requirement for councils to zone enough land for at least 30 years of housing development, effectively putting in place emergency housing powers similar to those used in Canterbury following the 2010 and 2011 earthquakes.
But the Prime Minister has no interest in adopting the proposals.
On the $55,000 grants, Ardern said in Parliament: "What is being suggested is that it would be paid out to councils after the house is delivered on. The barrier for many councils is right up front, and so we based our proposal on the issues councils have raised with us."
Ardern added: "I again, unfortunately, believe that the proposal the member has made won't solve the problem."
Ardern said she didn't want to repeat the failings of the previous National Government's Housing Infrastructure Fund, which was set up in 2016 as loans rather than grants.
"I fear what the member opposite has put up is akin to their first attempt in the Housing Infrastructure Fund, where they put up loans when councils already had hit their debt ceilings."
The Government is trying to fix the housing crisis by replacing the Resource Management Act (RMA), the complex planning law blamed for holding back new developments. But with over 800 pages to be replaced, it won't be passed until 2022.
The National Policy Statement on Urban Development will also require councils to reduce planning constraints and plan for growth, allowing for greater intensification in cities. But councils would have until 2024 to complete implementation.
Collins says National's proposal to put in place emergency housing powers similar to those used in Canterbury following the 2010 and 2011 earthquakes would speed up the process of freeing up land.
"National's plan would immediately short circuit the Resource Management Act and free up enough land for 30 years' worth of housing development to get houses built quickly."
But Environment Minister David Parker has confirmed plans to bring forward implementation of the National Policy Statement on Urban Development, and says he'll have more to say in the coming months.
