The reforms aim to expand the act's scope and increase certainty for investors and developers
Parliamentary Under-Secretary for Infrastructure Simon Court has announced a series of reforms to the Infrastructure Funding and Financing Act (IFFA) aimed at making it more responsive to demand and supporting infrastructure development.
The IFFA was introduced to facilitate infrastructure projects for housing by using a "special purpose vehicle" (SPV) to finance developments. The costs are repaid through levies on benefiting properties, keeping the expenses off council balance sheets and reducing the financial burden on ratepayers.
The act was initially modelled after the Milldale development, which used a similar financing approach to fund infrastructure without relying on council funding. However, Court noted that the act has faced challenges in achieving its intended objectives.
"We’re aware of limitations and unnecessary bureaucratic hurdles that add cost and inhibit its potential to deliver, which is why we’ve committed to a range of changes," Court said in a press release.
The reforms seek to expand the scope of the act, simplify processes, and provide greater certainty for investors and developers. The changes will extend access to the IFFA to additional entities, including water service providers under the Local Water Done Well programme and the New Zealand Transport Agency (NZTA) for transport infrastructure projects that contribute to development capacity.
Developer-led proposals will receive additional support, with councils required to provide endorsements where statutory requirements are met. Levy deferrals will also be introduced, allowing property owners to postpone payments under certain conditions.
The eligibility criteria for projects will be adjusted to explicitly include infrastructure projects commissioned up to two years before a levy proposal is submitted. Additionally, the act will be revised to allow IFFA levies to finance development levies without requiring a direct connection to a specific infrastructure project.
To streamline the approval process, the government will remove redundant steps and ensure that decision-makers receive relevant information efficiently. Ministerial affordability assessments will be eliminated in cases where the developer has led the proposal or where all affected parties have agreed.
Other changes aim to improve the administration of the IFFA framework. SPVs will have the ability to directly recover unpaid levies, and councils will be able to request reimbursement for costs incurred in administering levies. The government will also clarify Māori land protections and ensure that IFFA and development levies are not used to fund the same expense twice.
Court stated that these amendments, along with broader infrastructure initiatives and the Going for Housing Growth programme, are intended to create a more adaptable system for supporting development.
"These changes will deliver a more usable pathway that can be accessed by developers and others to deliver infrastructure that may not have been planned for by councils," Court said.
