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Housing Minister Chris Bishop has announced a plan to sell 900 Kāinga Ora homes each year as part of a “turnaround plan” for the public housing agency.
The plan will refocus the agency on its core mission of building and managing Government-owned social housing in a financially sustainable way, he says.
“Kāinga Ora is an important Crown entity, with assets of $47 billion and over $2.5b of expenditure each year.
“It currently owns around 75,000 homes and is the country’s biggest landlord.
“The previous Government poured billions of dollars into Kāinga Ora, with debt on its balance sheet rising from $2.3b in 2017/18 to $16.5b in 2023/24.
“Operating deficits grew from a surplus of $76 million in 2017/18 to a deficit of $568m in 2023/24.
“Kāinga Ora’s 2023 board-approved budget showed debt forecast to grow to $24.8b by 2026/27, outside of the previous Government’s debt limit for the organisation.
“Staff numbers grew from around 2000 in 2020 to around 3477 by the end of 2023, all this at a time when the social housing waitlist grew to over 20,000 applicants.”
Bishop says a review of Kāinga Ora led by former Prime Minister Sir Bill English last year found the agency was underperforming and not financially viable without significant savings as well as funding and financing changes, and the wider social housing system was not delivering the results New Zealand needs.
“The review made it clear that Kāinga Ora was in considerable financial strife.
“The Government appointed a refreshed board and asked them to deliver a turnaround plan by the end of 2024 to return the agency to financial sustainability.
“Cabinet has now considered and endorsed the plan, which is being released today.
“The plan will refocus Kāinga Ora on its core purpose of being a good social landlord and improve operating performance and reduce losses, with debt capped at an acceptable level.”
The five major components to the turnaround plan are:
- Kāinga Ora to be refocused on its core mission: building, maintaining and managing quality social housing, and being a supportive, but firm landlord.
- Improved tenant and community management.
- Improved housing portfolio and build management – better managing the existing Kāinga Ora assets and building or renewing homes as efficiently as the market, including simplifying social housing building specifications and using all available building delivery channels.
- Improved organisational performance: a focus on cost effectiveness – reducing high overheads and leveraging buying power more effectively.
- A more persistent and sustainable approach to funding and associated settings.
Bishop says Kāinga Ora is currently funded to deliver about 2650 additional houses around New Zealand through to 2026.
The Government has also funded 1500 further social houses to be delivered by Community Housing Providers from June, 2025, onwards.
“The Kāinga Ora turnaround plan means that from 2026/7 onwards, Kāinga Ora will be involved in around 1900-2000 construction events per year, made up of approximately 1500 new build homes and 400 retrofits of existing homes.
“This will be offset by demolitions associated with redevelopment activities, and sales of around 900 homes per year.
“This means the number of Kāinga Ora social houses will not reduce over time, and existing older or unsuitable housing stock is refreshed.
“Kāinga Ora sales will focus on older properties in high value areas, with the proceeds going to provide multiple other units in different areas.
“The sales programme will also focus on houses which are not fit for purpose, where the typology is ill-suited to the particular area, or which are simply uneconomic to maintain or redevelop.”
