The new state house is a central-city Auckland apartment.
Housing New Zealand is leasing 115 one- and two-bedroom apartments in five central-city buildings to meet demand for housing in the area.
Work and Income New Zealand is also topping up rents for beneficiaries and low-income workers living in central-city apartments.
Apartment sizes for the Housing NZ tenants range from 40sq m to 74sq m, smaller than a suburban home but bigger than some 19sq m "shoebox" studio units.
A Housing NZ spokeswoman said the 10-year leases covered no more than 30 per cent of the apartments in each of the buildings.
She declined to name the buildings, citing privacy reasons.
The corporation had no intention to buy any of the properties and "at this stage" no plans to lease many more inner-city apartments over the next two years.
Central-city units accounted for 7 per cent of the 1723 leased properties across Auckland, she said.
The decision by the state housing corporation to enter the Auckland City apartment boom coincides with the debate about the quality of high-density development.
Many critics, including Mayor Dick Hubbard, say the council-led push has led to scores of ugly apartment towers which will become ghetto areas.
Auckland City missioner Diane Robertson yesterday said it was vital to provide a range of housing for people in the inner city but it did not have to be poor quality "or people squashed in like ants".
She said many of the apartments were not good quality and the city lacked social, medical and mental services to support low-income residents, who found it viable to live close to jobs.
Diane Robertson was concerned that many apartments towers were not owner-occupied and, over time, the quality of the buildings would deteriorate and lead to poor social outcomes and increased crime.
She said the City Mission bought the property next door in Hobson St to stop it being developed for an apartment tower "because we think there needs to be a place reserved in the inner city for health, social services and support of housing".
Sandy Biggs, a regional operational manager for Work and Income NZ, said the agency was paying the accommodation supplement to several people who lived in inner-city apartments.
From April, the Government's Working for Families package has boosted the accommodation supplement from $145 for a single person to $225 for a three-person household in the central city.
* High-density state housing is not new to the city centre. The corporation has run the multi-storey flats in Greys Ave since 1947.
Housing NZ moves tenants to central-city apartments
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