Housing Minister Nick Smith looks at private urban development

Housing minister Nick Smith is looking at how to enable private developers to take care of infrastructure that usually falls to councils. Photo / File

Housing Minister Nick Smith is considering how to enable private companies to take on the development of particular areas, including infrastructure.

Prime Minister John Key today further outlined his thinking about the potential in allowing such development in high-growth areas, which would be overseen by a powerful new urban development authority.

He said Dr Smith had been considering such a move, which had not been ruled out.

"Quite a number" of development companies had approached him to ask about the potential development of particular areas, Mr Key said.

"That would include all the horizontal infrastructure and above-ground buildings that are built there.

"The argument goes along the lines that some of the councils feel cash-strapped for the horizontal infrastructure that they need to put in, and that is slowing down some of the developments."

Horizontal infrastructure includes roads, fresh water, wastewater and storm water systems, and is so-called because it runs horizontally along the ground.

Mr Key said one way to allow such private-company developments of a certain area was through an urban development authority.

The idea of an urban development authority was proposed by the Productivity Commission last year. It said the authority could assemble sites, master-plan large residential developments and partner with private sector groups to deliver them.

"The housing minister [Dr Nick Smith] has been giving some thought to whether that is a credible model. We are not there yet, in so much that there needs to be more thinking done, but we are not ruling out that as a potential model.

"If we want Auckland and other parts of New Zealand to grow at a faster rate ... we are going to have to build infrastructure at a faster rate. And the question is how do we do that and finance that."

During a speech over the weekend at a lunch hosted by the Chinese Chamber of Commerce, Mr Key was asked if Chinese construction firms could build horizontal infrastructure.

He said local bodies had turned down that option in the past.

"We are turning our mind to those issues. It might require some sort of changes. But built to the right standard with the right conditions I can't see why that wouldn't be possible."