State houses' $100,000 renovation bills 'excessive'

The Government has spent an average of more than $100,000 a house to convert three-bedroom state houses into four-bedroom units.

Responding to written parliamentary questions, Housing Minister Chris Carter revealed that 39 three-bedroom houses nationwide had been upgraded at an average cost of $104,852 in the past three years. The figure includes extra work on each house and refers to work since the 2003 Budget, which injected an additional $97 million into state housing.

It has drawn criticism from National Party housing spokesman Phil Heatley, who said he was surprised at the figure.

"It's understandable that some of these houses do need work, but at an average price of $105,000 a room, the cost to the taxpayer does seem excessive.

"Housing New Zealand appears to be suffering from the sort of construction cost blow-outs that are plaguing the Corrections Department.

"Labour simply hasn't measured up as a fit guardian of the public purse."

But Housing NZ communications director Tom Bridgman said the money spent reflected the amount of work done on each property.

"Most of the houses upgraded were built in the 1950s, so when we add another room, we take the opportunity to upgrade and modernise the whole house at the same time and make it useable for the years ahead."

He said by adding an extra bedroom, they had to ensure the house could cater for more tenants by maybe adding another toilet or modernising the bathroom and kitchen.

He rejected Mr Heatley's comments that the price tag was well above market rates, saying Housing NZ tendered out all its work to ensure the best value.

"There is a competitive process in one form or another for any work that Housing New Zealand does."

His logic was echoed by Master Builders Federation chief executive Pieter Burghout.

"Undoubtedly Housing NZ has a very rigorous policy of tendering out work, so the market sets the rate.

"I don't imagine this is a money-for-jam job where builders are getting fat off Housing NZ.

"I can't see how there would be fat in the system that should be worrying anybody."

Mr Burghout said $105,000 a house seemed a reasonable amount if it included miscellaneous work on the rest of the house. But he could not say if it was value for money without seeing the breakdown of the work.

The state housing work was part of the Government's programme as outlined in the 2003 Budget.

It included buying 318 more houses on top of those already planned, with some money going towards adding one or more bedrooms to 80 three-bedroom state houses.

Mr Bridgman said that by adding bedrooms to existing houses, they could accommodate more people without the Government having to buy new land.