Prime Minister John Key has announced a new $1 billion fund to fast-track infrastructure development by councils with high new housing demands.

The councils eligible to access the fund for such things as water and roading development are Auckland, Hamilton, Tauranga, Christchurch and Queenstown.

They are the cities that are expected to have more than 10 per cent population growth in the next 10 years.

The Government has not yet decided how the fund will be structured but it will require an extra $1 billion in borrowing.


The fund will own or finance the infrastructure until the councils receive rates revenue from the new houses.

Mr Key said a number of options were being considered for the management of the fund including a similar model to Crown Fibre Holding which was created to manage the rollout of ultra-fast broadband.

He signalled the Government was considering another big measure - to establish Urban Development Authorities for areas of high housing need.

They would have the power to override barriers to large-scale development which could include responsibility for planning and consenting.

UDAs had been widely used overseas, including in Australia, to help unblock development pipelines in high-growth areas.

"We will not allow unresponsive planning and slow infrastructure development to lock New Zealanders out of much-needed housing."

The new measures would sit alongside other parts of the housing plan: social housing build, emergency housing, special housing areas, an expanded Homestart scheme for first-home buyers, freeing up surplus Crown land, Resource Management Act reform and tax measures announced last year for foreign-based buyers.

Mr Key made his announcement in a speech to the National Party conference in Christchurch. He said the Housing Infrastructure Fund would accelerate the short and medium term supply of new housing.


"It will do that by investing upfront in infrastructure to ensure more housing can be built in a timely fashion," he said.

"To access the fund, local councils must outline how many new houses will be built, where they will be built and when they will be available."