Labour leader David Shearer is promising the biggest house building programme in 50 years to put 100,000 families into new affordable homes within 10 years.
Shearer announced the flagship policy in his keynote address to the Labour conference in Auckland today, where he was introduced by his wife Anushka.
"This will also boost our stagnating economy and create the decent well-paid jobs we need. It's time for action," Shearer said about the housing plan.
He said the policy was not about big government but a smart, active government using the levers available to it.
"We will also deal with poor quality rental housing by requiring landlords to bring their properties up to minimum standards in terms of insulation and efficient heating. I won't stand by watch families and particularly children live in cold damp and mouldy homes where their heal and future suffers."
The building programme, labelled Kiwibuild, would aim at building 10,000 houses a year by the end of Labour's first term in office.
Labour estimates it will generate $2b in economic growth and provide apprenticeships for 2000 workers.
Shearer said the government would use its low cost of borrowing and economies of scale from building in bulk to drive down the cost of building the houses.
He also planned to put a $1.5b kick start into the programme.
"This represents a fraction of the $41b National has borrowed over four years and is substantially less than the $12b National has committed to the roads of national significance."
Because it was funded from capital expenditure it would not affect the path back to surplus, Shearer said.
Housing Affordability Bonds would be offered to investors to help fund the plan.
The building programme would be overseen by Housing NZ (HNZC) but be undertaken by private builders. Much of the land would come from HNZC buying new land or building on existing developments.
The houses would be set at a price to cover the Government's costs and would not be sold at a loss.
They would be restricted to first home buyers and buyers would have to live in them for a set time yet to be determined. A penalty would apply if they were sold early.
Shearer is moving to put his leadership to a caucus vote as early as next week in an attempt to end speculation about his position and draw out challenger David Cunliffe.
Shearer's lieutenants were today meeting to consider ways a vote could be taken early under caucus rules.
That would likely not replace the scheduled vote in February at which only 40 per cent of the caucus could trigger a run-off according to new uses approved by the Labour conference yesterday.
But if the caucus gave him a strong endorsement, possibly in a vote that was made public, that could make the February vote more of a formality. No caucus meeting has been scheduled for Tuesday, but an urgent one may be called.
There are also rules that require at last a week's notice of a leadership ballot, but that may not be needed to simply endorse Shearer.
It is understood if Shearer wins the backing of caucus he will move quickly to demote Cunliffe.
One of his allies said Shearer had had "a guts full" of being undermined and he was planning to challenge Cunliffe to "either put up or shut up".