Build Ready Development Pathway

The Build Ready Development pathway provides targeted support for developments in regional areas with high unmet housing needs that have stalled due to the changing market conditions.

Challenging conditions for the residential housing market, including inflationary pressures, construction cost increases and the decline of house prices are continuing to stall consented developments.  At the same time, buyers are hesitant to purchase homes ‘off the plans’ due to challenging lending criteria and changing house prices, and prefer to offer on homes closer to completion.

This impacts the delivery of the types of homes we need the most: public and affordable housing in locations with high unmet housing needs.

The recent extreme weather events in areas that already had high unmet housing needs, such as Hawke’s Bay, Tairāwhiti and Te Tai Tokerau, have further increased housing pressures in these places. Suitable developments from these areas will therefore be prioritised in this funding round. Developments in other regional locations with unmet housing need are also welcomed.

Applying to sell land through the Build Ready Development pathway

Developers can apply to sell their land through this pathway.

Applications will be referred to the most suitable Government programme, such as the Land for Housing programme at Te Tūāpapa Kura Kāinga – Ministry of Housing and Urban Development, or the Kāinga Ora Land Acquisition programme. Developers applying to sell their land through the Build Ready Development pathway will need to provide:

• verification of ownership of the land or have an unconditional agreement to own the land
• confirmation that the land is zoned, or will be in the future, for residential development
• a description of the opportunity for development (minimum land size is 1000 square metres) and any site development plans
• willingness to provide due diligence reports, and
• an explanation of why they are seeking to sell the land and any Crown funding they may already have received.

Registering interest for prepurchase commitments or underwrites through the Build Ready Development pathway

Criteria

Full applications for prepurchase commitments or underwrite agreements must:

• already have resource consent for the development
• own the land or have an unconditional agreement to own the land for the development
• be ready to start construction with 6-12 months but not have commenced construction already
• have a valid reason that the development has stalled
• be building affordable homes in the development (telling us how many homes are either at, under or over the relevant KiwiBuild price caps for the region)
• be an experienced developer with a track record of success in building new housing in Aotearoa New Zealand
• provide transparent and detailed financial feasibility information
• provide evidence of third-party finance arrangements such as written indication from their bank or lender on the requirements to unlock development finance
• must be developing more than six homes (net).

Prioritising applications

When we are assessing applications for prepurchase or underwrite commitments, we will prioritise developments that align with Government priorities.

We will prioritise funding for developments that:

• are in areas with the highest need for public and affordable housing supply. This means:
  • we will prioritise assessment for developments in regional New Zealand that have been affected by recent severe weather events,
  • we will also assess developments from other regions with unmet housing need
  • some of these areas are already included as part of our place-based approach to housing. This approach recognises that every community has its own housing and urban development challenges and opportunities
• significantly contribute to better housing outcomes for the people who need it most, including housing outcomes for whānau Māori
• contribute to saving, maintaining or creating jobs in the construction sector in that location, and
• deliver significant benefits to the public for the Crown investment.

Full applications for prepurchase or underwrite commitments through the Build Ready Development pathway will need to include:

• evidence of resource consent and land ownership
• a description of the proposed development and why they plan to build in that location
• an overview of their organisation and development experience
• detailed site and building plans, including house typology
• detailed feasibility study (an example template is provided but developers can use existing) in excel which includes at least:
  • original land cost
  • detailed development and construction costs
  • contingencies and margins
  • finance and sales costs
  • cost per square metre and cost per unit
• a dwelling schedule (template provided) with details on each home in the development (size, market value) and an indication of how many homes are either at, under or close to the relevant KiwiBuild price caps
• any known natural hazard risks and their mitigations
• detail of presales' efforts
• detailed financial information including developer equity, other sources of funding and written indication from third-party finance institution on the requirements to release development finance for the specific development
• a description of the benefits of the development, whether it will create more local employment opportunities, and any initiatives that create better climate and environmental outcomes.  

If you have any questions about the Build Ready Development process, you can email the team at BRD@HUD.govt.nz.