The Government says it will embrace the balancing act of building high-quality, energy-efficient KiwiBuild homes, while ensuring they remain "affordable" to buyers.
"KiwiBuild is all about building quality starter homes for families to buy. We want them to be warm, dry, and energy efficient," Housing and Urban Development Minister Phil Twyford said.
It comes as a Green Council commissioned report today found high quality KiwiBuild homes could save $680 million in reduced pollution and power bills.
To do this, they would need to be built to a higher standard than the minimum levels set out in the New Zealand Building Code, the report by economic consultants Sense Partners said.
The savings would be shared by KiwiBuild home owners benefiting from reduced electricity and water bills and the community gaining from reduced waste, water runoff and climate change pollution.
Report author Shamubeel Eaqub said it was an economic "no brainer" to build the homes to a higher standard, despite increased up front costs.
Twyford said KiwiBuild was an opportunity to build better quality homes with increased thermal efficiency that would help reduce carbon emissions.
"I've asked officials to look at how we use KiwiBuild to achieve those goals, even as we get on with the job of getting the programme off the ground and getting the first homes built," he said.
"I'm keen to see how ambitious we can be on energy efficiency, at the same time as keeping the homes affordable."
The report findings, due to be presented at industry forum The Housing Summit
on Wednesday, said local building code standards were recognised as being behind international standards.
The local building code had been criticised by the International Energy Agency and Organisation for Economic Cooperation and Development, it said.
Andrew Eagles, chief executive of the New Zealand Green Building Council, which oversees an independent quality standard called Homestar, said the Government must seize this opportunity to build higher quality KiwiBuild homes.
He said the Homestar standard measures the health, warmth and efficiency of New Zealand houses.
Homes that score a rating of six or higher "will be better quality - warmer, drier, healthier and cost less to run - than a typical new house built to [the] building code", he said.
The Green Council estimated it would cost an additional 1.7 per cent within Auckland and 2 per cent outside of Auckland in up front costs to build the KiwiBuild homes to a higher standard.
"When we say that to builders and developers, they basically say that is in the region of a rounding error and that materials or planning can hold things up more than that 1.7 per cent," he told Newstalk ZB.
Eagles said the council also hoped to see a push to improve the building code.
"Minister Twyford has stated on air that he would welcome a review of the building code. We think that is a long discussion with the sector about what's right," he said.
The other big player in improving home standards was local government, especially as every council chief executive in New Zealand had signed off on reducing and adapting to climate change, Eagles said.
"Now they have in their remit the chance to make better homes more incentivised," he said.
"They could do reduce really development contributions, like Wellington Council, has done for buildings or give more density, like Queenstown Council, is trying to do."