The Government’s Infrastructure Acceleration Fund (IAF), a contestable fund aimed at accelerating key infrastructure for housing development, has received a strong response from councils, iwi and developers throughout Aotearoa.
The IAF, administered by Kāinga Ora – Homes and Communities, closed the initial expressions of interest period on 20 August, after giving applicants a brief extension due to Covid-19 Alert Level 4 restrictions.
Kāinga Ora General Manager Commercial Group, Caroline McDowall says the fund has been very popular.
“We have received over 200 proposals for the IAF, with a great regional spread,” she says.
“This excellent response highlights how badly the funding is needed to jump-start developments and increase the pace of housing supply.”
The IAF was announced as part of the Government’s $3.8bn Housing Acceleration Fund in March 2021. The fund of at least $1bn is designed to allocate funding to infrastructure projects that unlock housing development in the short to medium term, enabling a meaningful contribution to housing outcomes in areas of need.
“The applications that we have received for the IAF represent potential housing outcomes for New Zealand ranging from small, localised developments to large-scale developments with over 3,000 houses,” says Caroline McDowall.
“The applications currently total over $5 billion of funding requested from the IAF with the majority of proposals estimating delivery of housing within the next five years, if they receive funding. Although predominantly led by territorial authorities, it is good to see many applications representing the collaborative approach with iwi and developers that we would expect.
“While the response to the fund has been encouraging, there is a set amount available to invest in infrastructure projects, so not all proposals will proceed. There will now need to be careful evaluation to ensure the proposals that go through to the next round have the greatest potential to succeed in locations that need it the most.”
Led by Kāinga Ora and with input from other Government agencies, the robust evaluation process assesses applications against key criteria, taking into consideration cost-effectiveness and the contribution of applicants, as well as capability and readiness. The initial evaluation process is underway, with applicants to be informed of results in mid-October.
Successful applicants from the initial evaluation will be invited to submit a more detailed response to an RFP invitation to enable Kāinga Ora to undertake thorough due diligence. The two-phased approach is designed to ensure applicants focus time and resources on proposals with the best prospect of success in the competitive process.
“Although the majority of the final IAF funding decisions will be made in 2022, there may be some proposals that we can fast-track through the negotiation process to get underway in coming months,” says Caroline McDowall.
“We look forward to sharing news of the fast-tracked proposals before the end of the year and seeing the successful IAF applications starting to deliver great housing outcomes for New Zealanders over the next few years.”