Up to 15,000 houses could be built in Whenuapai with the help of the Government's new infrastructure fund, Housing Minister Nick Smith says.

Dr Smith said a 1400-hectare site in the West Auckland suburb was a prime candidate for the $1 billion contestable fund, which is being offered to fast-growing councils to help pay for water, roads and other core infrastructure needed to increase housing supply.

The Auckland Council has earmarked the Whenuapai site for residential housing, but does not plan to develop it for more than 10 years.

Dr Smith said that if Government covered some of the transport and water infrastructure costs, houses could be built on the land within two to five years.


"There is potential for 15,000-plus homes," he said. "The major constraint to that land which is ripe for residential development is the issue of infrastructure.

"The council has said that they wouldn't be able to bring forward that development unless they could resolve that infrastructure."

Auckland Mayor Len Brown said through a spokeswoman yesterday that it was too early to say which sites would be proposed for Government support.

It is not yet known how many new houses the $1 billion fund will provide in total.

Dr Smith said it would only cover part of the costs of new infrastructure - the remainder would be paid for by councils and developers.

The zero-interest loans will be offered to councils which can build the greatest number of houses in the shortest amount of time, he said.

The infrastructure fund is limited to regions which will grow by 10 per cent or more in the next 10 years. That list currently includes Auckland, Tauranga, Hamilton, Christchurch and Queenstown.

The list of eligible regions could grow or shrink depending on their projected population growth. Statistics New Zealand data shows that Nelson and New Plymouth fall just below the threshold, meaning they could become eligible for funding in future.

To streamline housing supply, the Government plans to create Urban Development Authorities (UDAs) with special powers to develop specific sites.

That has raised concerns about whether the UDAs could seize property off landowners who resist development, in particular those who are land-banking.

Prime Minister John Key downplayed the prospect of land seizures yesterday.

"I don't think we're looking to go and march over the top of people's property rights," he said.

New Zealand Council for Infrastructure Development chief executive Stephen Selwood said the new infrastructure fund was "a good start" but he added that $1 billion "doesn't go very far". He said the best candidates were sites in South Auckland which were close to motorways and public transport but needed funding for water infrastructure.