Mayors celebrate government's 'eyewatering' infrastructure contribution

Seven mayors around the country are toasting securing government funding, which will take care of crucial infrastructure in their towns or districts, and allow them to build more houses.

But other mayors are wondering when it will be their turn.

On Thursday, the government announced $179m of funding for seven successful projects, which will see 8000 houses built over the next 20 years.

Rotorua Lakes mayor Steve Chadwick was one of the successful applicants to the government's Infrastructure Allocation Fund, and she was overjoyed.

$84.6m of new funding will enable over 3000 homes to be built in her town.

"Government coming in with this is eyewatering. It brings it forward, and we can get going. It's great news for Rotorua. We have to build our way out of this housing crisis," she said.

The money, though, isn't for the houses. It's for the infrastructure needed to get them built.

The government's billion-dollar Infrastructure Acceleration Fund puts money towards things like roads and pipes, to clear the development hold-ups.

Then, it's up to councils, iwi, and developers who applied to the fund to get the houses built.

In Rotorua's case, a 30-year programme will now take seven.

"It will be a combination of stormwater pipe network upgrades, detention ponds, wetlands, and a new pump station. So this is very, very big for us," Chadwick said.

Each project is unique to the needs of the applicant, such as Napier's funding for flood management work, or water supply and roading so affordable housing can be built in Ōtaki.

$38.4m will go towards upgrading the State Highway 2 intersection by the Western Bay of Plenty town of Ōmokoroa. It'll allow 2500 homes to be built in the fast-growing town.

Western Bay of Plenty mayor Garry Webber said the developers and land were all ready to go, they just needed the intersection green-light.

"After being promised by various governments over a 12-year period, to finally have it delivered, I wouldn't say it's miraculous but it's a word similar to that," he said.

As anyone who's ever driven along that stretch of road will tell you, an upgrade to that intersection has been needed for a long time.

"When you're trying to get 12,000 people going onto that road to get into Tauranga, to wherever they want to go, it's just been a nightmare," Webber said.

National's deputy leader Nicola Willis said it was strange the government needed a council to make a housing business case, in order to approve a critical and long-overdue piece of transport infrastructure.

"A ad hoc, project-by-project approach is not enough to fund the infrastructure for growth," she said.

It's been just over a year since the fund was announced, and interest exceeded capacity.

From 200 expressions of interest, 80 were asked to submit more detailed proposals. In May that was whittled down to 35.

Willis said it was a bitter pill to swallow for councils that missed out.

"I'm sure there will be people who feel they had just as good a case and missed out. That is the problem with this sort of approach, that there are winners and there are losers.

"It's a hard judgement to make, but I know there will be a lot of people irritated that they didn't succeed."

The 28 remaining applicants include Upper Hutt Council, which in co-operation with developers wants to put houses and commercial properties on land around Trentham Racecourse.

"There's to-ing and fro-ing of more information needed, but it's certainly a very comprehensive process. And one would expect that because this is a major project," said Upper Hutt mayor Wayne Guppy.

He was hopeful the project would be in the next batch.

"Well, you know, I'm a bit impatient so I hope the decision is tomorrow! But if it takes a few more weeks we'll see, we'll wait. But certainly we would hope we're next in line."

A spokesperson for Housing Minister Megan Woods said as other projects completed their due diligence and negotiations, they would be announced in tranches over the coming months.