4. KiwiBuild—Buying off the PlansHon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban DevelopmentKiwiBuild—Buying off the Plans4. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Does he stand by all his statements in the House yesterday?Hon PHIL TWYFORD (Minister of Housing and Urban Development): Yes in the context they were made.Hon Judith Collins: When he advised the House that The types and amount of risk the Crown may take through the Buying off the Plans initiative were assessed as part of a business case I took to Cabinet." what was the specific amount and types of risk?Hon PHIL TWYFORD: Could the member repeat the question—the latter part of the question?Hon Judith Collins: When he advised the House that "The types and amount of risk the Crown may take through the Buying off the Plans initiative were assessed as part of a business case I took to Cabinet." what was the specific amount and types of risk?Hon PHIL TWYFORD: As I said yesterday to the member the specific amount will vary from development to development but there is an in depth risk assessment process in place for each development and I'm happy to share the elements of it with the member. The KiwiBuild unit advise me that risk is managed through an initial assessment of each project a short-listing process a second review of the proposal and a workshop with the developers. The KiwiBuild unit then evaluate the amended proposal. There is then an opportunity to clarify any issues raised. The project then goes before an evaluation panel. The evaluation report chair prepares a final evaluation report and then the contract itself is negotiated.Hon Judith Collins: When he told the House yesterday that "residential developments across New Zealand stall because developers struggle to find finance" what makes him think that he is a better judge of the solvency of a building company than those banks that are currently refusing to provide the finance?Hon PHIL TWYFORD: I reject the member's assertion in that question but I want to make it very clear in relation to this question and questions that the member raised yesterday in the case of developer insolvency the Crown though KiwiBuild carries no risk whatsoever. When we buy off the plans and underwrite the Crown simply makes a commitment for houses that have been completed and are ready for sale. So if the developer becomes insolvent there is no risk whatsoever to KiwiBuild and in relation to rising construction costs—Hon David Bennett: Have you ever done that in business?Hon PHIL TWYFORD: —which is one of the other risks that member has raised again there is no risk whatsoever to the Crown through KiwiBuild. Those risks remain with the developer.SPEAKER: Order! Before a member calls—David Bennett will stand withdraw and apologise. I've just warned his leader for something and he's repeated it.Hon David Bennett: I withdraw and apologise.Hon Judith Collins: When he told the House yesterday that new houses are to be built in a Mangēre development did he know that part of that land in stage 1G is still privately owned and his premature announcement has likely increased the price that the Crown is going to have to pay for it?Hon PHIL TWYFORD: I'm happy to look into that matter that the member raises.Marja Lubeck: Why is the Government working with the private sector to build more affordable homes?Hon PHIL TWYFORD: Because many residential developments across New Zealand have stalled because the developers are struggling to find finance on acceptable terms. That's exacerbating the shortage of homes that has built up over the last decade. This is why KiwiBuild steps in to (a) enable developments that otherwise would not be undertaken to be completed; (b) to speed up developments to increase supply faster; and (c) to enable the construction of affordable homes rather than the McMansions that young Kiwi families cannot afford.Hon Judith Collins: How robust is this assessment process that he's referred to today for KiwiBuild when part of the stage 1G of the Māngere development that he announced the other day is actually still owned by a private owner who has—although approached by Housing New Zealand—decided that the price has just gone up?Hon PHIL TWYFORD: Well I think rather than take the member's assertion at face value I'll get the facts and get advice on exactly what's going on in relation to that development.Marja Lubeck: What advice has he had on how the KiwiBuild unit manages any potential risk?Hon PHIL TWYFORD: The KiwiBuild unit advises me that there is a robust process to manage any potential risk. There's an initial assessment of each proposal and the KiwiBuild unit selects potential developers to enter the process. Next the unit holds workshops for responses—SPEAKER: Order! Order! I think the member has read that before.Marja Lubeck: What are the risks of not undertaking the Buying off the Plans KiwiBuild programme?Hon PHIL TWYFORD: Well the main risk is that we'll continue to see residential developments across New Zealand stall because developers cannot get finance on acceptable terms. These homes will not be built; they will take longer or they will be too expensive for the families who need them and this would mean that we would not be able to increase supply of modern starter homes for young families. This Government is committed to building affordable homes for young Kiwi families."