Housing Minister Nick Smith is warning a group of developers in Special Housing Areas to start building homes or risk losing their privileges.

Since 2013, 84 Special Housing Areas (SHAs) have been set up in Auckland to speed up the supply of new houses.

Mr Key told reporters at his post-Cabinet press conference this afternoon that most of the SHAs had indicated that they were starting work, but 14 of them had reported that they were not making progress.

"We haven't had any advice that they've started doing the preliminary work they need to," he said.

Advertisement

"They will probably find that in the next few days they will be getting a letter from Nick Smith saying that if they don't progress and bring those Special Housing Areas onto the market then the Special Housing Area designation will be taken off them."

Mr Key added: "We [made] it clear right from day one that if you want to have a Special Housing Area we want to you speed up supply to the Auckland market."

Asked whether the owners had been "land-banking", or sitting on the land while it gained value, Mr Key said: "No, but I think they'll have to come back to us and explain why."

Dr Smith said he made an agreement with Auckland Mayor Len Brown to send the warning letters after they were advised that the 14 SHAs had not applied for structural plans or resource consents.

He said the owners of the SHAs would be invited to provide evidence of progress towards a housing development.

If no progress was being made, "the minister may revoke the Special Housing Area status".

The SHAs were created by legislation in late 2013, and allowed developers to fast-track consents if they fulfilled certain criteria, including a requirement to build affordable homes.

The Government signed an accord with Auckland Council to build 39,000 new houses in three years within the SHAs.

But progress has been slow -- the New Zealand Herald reported in January that just 350 houses had been built in the specially designated areas. Of those, only 20 were a direct result of the housing accord.