Government has announced a new $1 billion housing infrastructure fund to help councils like Tauranga accelerate the supply of new housing says Finance Minister Bill English.

The contestable fund will be open to applications from councils in the highest growth areas – currently Tauranga, Christchurch, Queenstown, Hamilton and Auckland.

Bill says in a media release today, the fund will help bring forward the new roads and water infrastructure needed for new housing where financing is a constraint.

'To access the fund, local councils must outline how many new houses will be built, where they will be built and when they will be available. Ideally, they will have agreements with developers on these issues.

'Funding may also have other conditions attached, such as faster processing of resource consents. All of this will require close collaboration between central and local government.”

He says infrastructure and its financing in particular, is one of the three key constraints to building more houses – alongside land supply and consenting requirements.

'Councils have strict debt limits which means some lack the headroom to invest in infrastructure now and then wait for future development contributions to recover costs.”

Bill says the fund will help provide more infrastructure sooner by aligning the cost to councils with the timing of revenue from development contributions.

Depending on the number and timing of applications, it will require the Government to temporarily borrow up to $1 billion, which will increase net debt until it is repaid.

Housing Minister Dr Nick Smith says the Government is also considering establishing Urban Development Authorities to help further speed up the supply of new housing.

The Authority will have streamlined powers to over-ride barriers to large-scale development, including potentially taking responsibility for planning and consenting and other powers.

'These changes are just the latest steps in the Government's ongoing, comprehensive programme to increase the supply and affordability of housing.”

'They will complement the work of the Housing Accords and Special Housing Areas, our social housing build, our emergency housing programme, the expanded HomeStart Scheme for first home buyers, the development of surplus Crown land, the National Policy Statement, RMA reform and the extra tax measures we took last year.”

Nick says the Government is making good progress in facilitating increased investment in housing with a record $11.4 billion of residential building work underway this year.

'This initiative to support councils with infrastructure provision is the next logical step in this programme.”

The $1 billion infrastructure spend-up to get more new houses built quicker was announced by Prime Minister John Key at the National Party's annual conference in Christchurch today.

Bay of Plenty MP Todd Muller says he welcomes the fund to build housing and infrastructure.

'This is a huge announcement for us in the Bay, with the Government willing to partner with cities like Tauranga to fund upfront our local underground infrastructure. This will facilitate faster house and commercial building.

'Our city and region is one of the greatest in the country, with strong migration, employment and economic activity. But we need to ensure our growth is sustained and above all housed,” says Todd.

'This fund will assist our local councils to keep building the necessary infrastructure to support our people and businesses.”

Tauranga MP Simon Bridges says Tauranga will be the big winner with the funding announcement.

'It's going to help bring forward local roads and water infrastructure necessary for the new houses required for our growing city.

'Talking to Tauranga Council helped inform the policy because we learned first-hand that council debt limits are getting in the way of building what is needed.

"This fund will allow us to get on with the infrastructure and then local councils can pay us back when they have revenue from the developments that will come from this accelerated investmen.”

New Zealand First leader Winston Peters says the positive from the Government's announcement is the admission there was a housing crisis in New Zealand.

'The negatives are that this $1 billion loan won't even remotely cope with the number of houses needed for immigrants coming into New Zealand annually, let alone our natural population increase.

'After eight years of doing nothing, this monetary sum won't make up the huge deficit in infrastructure that National has allowed to build up.”

Winston says the second negative is the government refuses to take responsibility to provide a house building policy for which central government should be responsible.

'Here after, this government will seek to blame local government for the housing crisis on the pretence that they, and not central government, is responsible for the massive demand that now exists.

'Remember it was Mr Key who was screaming at the government when in opposition about a housing crisis and what were they doing about it.

'It is a far bigger crisis now and he's done nothing but added to the demand with mass immigration, with numbers even bigger than Labour's.”

Labour leader Andrew Little says the fund does nothing to help those missing out in the current housing crisis, the first home buyer.

'This is a rushed piecemeal policy that hasn't been thought through… Councils can already borrow this money for themselves so it's really just more smoke and mirrors by a Government that has no real answers.

Andrew says instead of on-lending a billion dollars to councils, the Government should reform the way infrastructure is funded.

'What this Government must do is come up with a comprehensive housing policy that tackles the crisis across the board. Instead of half-measures and piecemeal policies the priority should be to build affordable houses for people to live in.”