Housing infrastructure fund receives $1.5b in applications from Auckland, Tauranga, Hamilton, and Queenstown

The fund is intended to help councils support growing populations with roads and other infrastructure.

None of it has been spent yet, but Building and Construction Minister Nick Smith says there is serious demand for the $1b Housing Infrastructure Fund.

The fund, announced last year, is set to loan councils interest free cash to build infrastructure to cope with rapidly rising populations.

There has been speculation that the contestable fund had not received many applications, especially as Auckland Council is so near to its debt limit that any more loans could bump down its credit rating.

But Smith told the Social Services Select Committee the fund was now oversubscribed, with $1.5b worth of applications.

"We've appointed a panel, they will be making recommendations to Ministers early in the new financial year," Smith said.

He said he was purposefully leaving the panel to make the decisions about where the money should go.

"My understanding is that the bids are from major cities such as Hamilton, Tauranga, Auckland, and Queenstown."

The panel will look at the amount of population growth compared to the amount of money requested, so smaller cities like Queenstown would not miss out to giants like Auckland.

The panel is due to make recommendations to him in July.

Labour housing spokesman Phil Twyford asked if Smith had realised when designing the policy that some councils would not be able to take the money due to high debt levels.

"We were aware of official's advice at [the time the policy was designed] some councils may be facing limits in respect to limits of debt," Smith said.

He floated the idea of special instruments that would give councils like Auckland's the funds without putting the loan on their balance sheets.

"We're also doing work about alternative approaches of supporting the finance of that infrastructure with something like a special purposes vehicle."

Twyford said documents showed the idea for the fund was made in a brainstorm from staff in the Finance Minister's office just three weeks before it was announced.

"You have had to spend 12 months trying to retrofit this policy," Twyford said.

He said Labour would design policies properly instead of "putting out a press release without doing the work."

Smith contended that the policy had resulted from months of discussion.

"I do find it ironic that you spend half your time criticising me for not moving fast enough on getting new houses built and the other half the time arguing I'm not following correct process, which probably means I've got it about right," Smith said.

"I can assure you that the first discussions ... were some two months prior."

From Stuff.co.nz