Entering its third term, the Government announced its aim to have 20% of the country’s social housing provided by non-government organisations by 2017 (we covered this here). Yet as this week’s developments have highlighted, this plan faces a number of practical difficulties.
The Government confirmed its plans to sell state houses to registered community housing providers and iwi in January. However, on Monday the Salvation Army said that it would not be buying any of the 1000-2000 homes to be sold this year. It simply lacked the ‘expertise, infrastructure and resources to successfully manage any social housing transfer of size’, yet was open to a consortium approach. With a charity of this size declining to partake, it may create concern whether the Government’s plan will be able to get off the ground.
Although these organisations would benefit by obtaining assets and an income stream, additional financial incentives will be a central consideration going forward. This is especially so considering that on Tuesday the Housing New Zealand Minister Bill English acknowledged that state houses required some $1.5 billion worth of deferred maintenance. Consultation with community housing providers and iwi is set to start in April, with commercial negotiations beginning in June.
Meanwhile, voices from the private sector have weighed in also. Auckland developer David Whitburn has commented that developers could assist Housing New Zealand in utilising space in current landholdings, or the Government could allow for-profit groups to run social housing. However, as Fletcher Building has commented, privately managed social housing would also need time to develop. Bill English has expressly not ruled out selling to private developers, but has said that they will still need to register as community housing providers.
This plan will undoubtedly be tweaked going forward; we watch with interest.