State houses for 'most needy'

Photo / Paul Estcourt

The Government will increasingly look to charity to fund low-cost housing as it moves towards restricting state housing to families with the highest needs, says Housing Minister Phil Heatley.

The independent Housing Shareholders Advisory Group yesterday released a report recommending increased participation by non-government organisations, including iwi and the private sector, to combat a growing shortage of affordable housing.

The report said Housing NZ was under increasing financial strain

Crown spending on social housing was projected to keep rising, largely due to the increasing pressure of maintaining Housing NZ's existing houses and the low rental returns.

Meanwhile, rising house prices had seen home affordability decline, increasing demand for social and state housing.

While the advisory group said there was no "magic bullet" to deal with the issues, a key component missing in this country was "a substantial level of third-party provision of social housing". It recommended that Housing NZ focus on the "high needs" sector while moving to become an "orchestrator" of third-party participation over the next five years.

Responding to the report, Mr Heatley said that while the "capital-constrained" Government remained committed to state housing for high-needs households, "we need community housing organisations to step up to the plate and we need a lot of philanthropic giving. Community housing organisations have contacts in the philanthropic sector that we don't have."

Labour's housing spokeswoman, Moana Mackey, said Mr Heatley was being "completely unrealistic".

"Where do they think these philanthropic organisations with hundreds of millions of dollars to invest in social housing are, and why don't they do it now?" she asked.

While it was a good idea to foster a bigger community housing sector, "it has to be as well as - rather than instead of - the Government".

Fletcher Building director Alan Jackson, the former management consultant who chaired the group, said one of the potential avenues for growing the involvement of community housing groups was to transfer some of the existing state house stock to them.

Community groups could then "leverage" or borrow against those homes to fund the development of yet more social housing.

David McCartney of Community Housing Aotearoa said that model had worked well overseas. "I'm sure they'll look at that here."

Housing New Zealand:

* Currently provides 67,700 dwellings.

* Owns about $14 billion worth of the country's $15 billion stock of social housing.

* Crown spent $2 billion on social housing in 2008-09.

* That is forecast to rise to $3.6 billion a year by 2016.

* That is "unsustainable", says the Housing Shareholders Advisory Group.