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Government eyeing build-to-rent housing

Radio New Zealand logo Radio New Zealand 10/03/2019
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The government is looking to support property developers to build homes to lease or rent, rather than to sell.

Housing Minister Phil Twyford has asked officials to prepare more advice on building rentals on state-owned land, including whether the government should build public transport stations on it to spur build-to-rent developments.

"It is at an early stage but I think it is a particularly promising thing," Mr Twyford said.

An official briefing to the minister from the Ministry of Housing and Urban Development in October said build-to-rent housing developments, as seen in Australia, Europe and the United States, would solve a number of the government's housing goals, including improving rental affordability, quality and increasing rental supply.

However, property experts said the idea was opposite to the government's KiwiBuild policy, which built homes to sell.

Chief operating officer of build-to-rent property development firm New Ground Capital, Jonathan Holden, said the government was too focused on home ownership.

"There is still an infatuation with home ownership in New Zealand, and to some extent, KiwiBuild is only compelling that.

"Renting a house is a perfectly legitimate choice. Let's provide people with a good rental proposition."

Since its inception in 2014, New Ground Capital has built 49 rental homes in west Auckland, and has hundreds more in the pipeline in Auckland and Queenstown.

The Super Fund and iwi Ngāi Tahu financed its first development.

A researcher at CBRE, Tamba Carleton, said the government needed to look harder at the idea of building homes to rent long-term.

"We need to look at what has happened overseas and the potential that build-to-rent has to improve the lives of renters, while providing a return to investors."

Mr Twyford agreed KiwiBuild was different, but said that would not stop him from pursuing new housing policies.

"I do not necessarily think it is a contradiction to pursue both these policies at the same time. I think we should do both these things."

The general manager of housing policy at the Ministry, Rod Harris, said build-to-rent was new in New Zealand, but it could work here.

"The build-to-rent model has the potential to deliver new supply that supports people to be able to rent appropriate housing for their needs.

"[The ministry] is at an early stage of looking at build-to-rent options and is observing initial pilot projects in the private sector closely."

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