Why has KiwiBuild Not Been a Success
One of the challenges faced by the KiwiBuild program was the lack of interest from developers in delivering the types of housing that the program was aiming to deliver. The program was designed to deliver affordable homes for first-home buyers, but it faced several challenges that made it difficult to achieve this goal.
One of the main challenges was the cost of construction. The KiwiBuild program aimed to deliver affordable homes, but the cost of construction in New Zealand is relatively high, due in part to the cost of materials and labor. This meant that developers were often unable to deliver affordable homes at the price points required by the KiwiBuild program.
Another challenge was the lack of interest from developers in delivering the types of housing that the program was aiming to deliver. The program focused on delivering standalone homes and apartments in urban areas, but many developers were more interested in delivering higher-value, higher-density developments that were more profitable.
Finally, the KiwiBuild program faced challenges around the availability of land and infrastructure. Many of the areas where the program was seeking to deliver housing were already under pressure from a lack of infrastructure and a shortage of available land. This made it difficult to deliver new housing developments in these areas. Developers know this as they work with different town plans and councils on a day-to-day basis where we know these options are not viable.
While the KiwiBuild program had the potential to deliver much-needed affordable housing, it faced several challenges that made it difficult to achieve this goal. Addressing these challenges will require a multi-faceted approach that considers the cost of construction, the types of housing that are commercially viable, and the availability of land and infrastructure.
There are potential benefits of working with private developers who have a strong track record in delivering successful housing developments. In many cases, these developers have a deep understanding of the commercial and logistical aspects of developing housing projects, which can help to ensure that projects are delivered on time, within budget, and to a high standard of quality.
Working with private developers can also help to address some of the challenges faced by the KiwiBuild program. For example, private developers may have access to lower-cost financing or be able to leverage economies of scale to reduce the cost of construction. They may also be able to deliver a wider range of housing typologies that are more commercially viable, such as townhouses or terraced houses.
In addition, working with private developers can help to address the issue of capacity constraints within the public sector. By partnering with private developers, the government can leverage their expertise and resources to deliver housing projects more efficiently and effectively.
While there are certainly challenges associated with working with private developers, there are also potential benefits to be gained from doing so. By carefully selecting and partnering with proven developers who have a track record of success, the government can help to accelerate the delivery of affordable housing and address some of the challenges facing the New Zealand housing market.