A $300 million scheme to fast-track 6200 new houses in Auckland's northwest should boost the case for better public transport in the area, say Auckland councillors.

The financial challenges facing the scheme were largely put to one side when the council's governing body today voted to submit a detailed business case to proceed with unlocking two areas for housing at Redhills and Whenuapai.

A report by officers said rising infrastructure costs and developers not being able to fund their portion could see the scheme canned. At the meeting, officers said the risk of higher costs was 5 per cent.

"This is a no brainer," said Waitakere councillor Linda Cooper.

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"This is $300m we don't have or couldn't borrow and provides the opportunity to do some good development and hopefully give some more urgency to decent public transport in the northwest." she said.

Last year, Auckland Council received $300 million from the Government's $1 billion Housing Infrastructure Fund to build new roads and water infrastructure for 6200 houses at Whenuapai and Redhills.

The $1b fund was spread across five of New Zealand's fastest-growing councils and is expected to speed up work on new houses by up to eight years.

The interest-free loan is expected to save Auckland Council $50m to $60m in interest costs over 10 years.

Councillor Richard Hills said the lack of public transport was a huge issue in the northwest with no busway built at the time of the northwestern motorway upgrade. He did not want to see the new residents left on the outskirts of the city and forced to drive everywhere.

Another councillor, Mike Lee, said the scheme boosted the case for extending trains to Huapai.

Councillor Chris Darby, who chairs the planning committee, said the scheme showed the real cost of developing greenfield land that had been subsidised for years by ratepayers and provided big profits to developers.

He was referring to the $48,000 infrastructure cost per house in a high density area at Whenuapai and Redhills outlined in a report by officers and what he estimated was a $130,000 cost per house for a further 6800 less dense houses in the wider area.

"This is the beginning of unhinging the true cost back to those who benefit," said Darby, who said charging the true cost of greenfield development would see more brownfields development in established areas.

Officers said reaching an agreement to access $300m form the fund does not require the council to proceed with the proposal.

REINZ chief executive Bindi Norwell welcomed the council moving ahead with a detailed business case to progress the development of 6200 houses following reports that the development was at risk of not being built.

"While we recognise that rising infrastructure costs have made it more difficult for developers in recent times, the reality is that Auckland has a housing shortage of more than 60,000 properties.

"Until we're able to start to back-fill some of that shortage houses are only going to continue to remain unaffordable for first-time buyers and those on lower incomes," she said.

This is the second Government scheme to help Auckland's housing crisis that is facing challenges.

Last month, the Herald reported that a $600m scheme to bring forward 23,300 new houses in the north and south of the city is making little progress.

It involves private investors paying the upfront cost of new transport and water infrastructure which is recouped by charging new residents higher rates and water bills over a 20- to 30-year period.