Housing Minister Paula Bennett has revealed more detail on how the Government’s transfer of state housing to social housing providers might work.

She has outlined a series of Government subsidies which community housing providers can obtain to enable them to purchase and run houses for people who would otherwise be Housing New Zealand tenants.

Speaking at the Habitat for Humanity conference over the weekend she said the Government was no offering community housing providers a guaranteed rental for 25 years to enable them to purchase additional houses.

“If we look at the negotiable contracts for building new social housing, a CHP can get a 25 year Government backed income stream – based on the Income Related Rent subsidy – effectively the going market rate of rent,” she said.

“Under the flexible tailored contracts MSD will continue to pay even if the house is empty between tenancies.”
And she said that the Ministry of Social Development was open to paying a higher rent than the income related rent subsidy allowed.

“They are also open to paying an upfront development payment – in most cases around 10 to 20 per cent of the total cost of building. 

“Say the house costs $400,000 that could be an $80,000 upfront payment that does not have to be paid back.”

Some contracts had already been signed providing for higher fees to the CHP for managing difficult tenants.

“But MSD will also negotiate over other factors that CHPs might have concerns about, by considering paying bonuses for providers who achieve agreed outcomes.”

 Ms Bennett said she could see a “two speed” housing market with small to medium sized CHPs specialising in what they did best and what they’ve always done…”growing sustainably at a pace that suits them.

“And larger-scale CHPs created from partnerships with developers, iwi and financiers and growing rapidly.”

She said that over the next year she expected that:

  • Community providers and HNZ will have purchased hundreds more social housing places in Auckland.
  • More than 800 HNZ social and affordable houses will have been built or nearing completion in Auckland
  • The intended transfer of more than 1400 HNZ houses in Tauranga and Invercargill to CHP’s will be finalised.
  • Further opportunities for CHP’s and consortiums to grow by obtaining state houses in other parts of New Zealand will have been identified.

 

Ms Bennett said that within the next few days she would be announcing details of responses to her request for request for community providers to supply an extra 300 social housing households in Auckland.

 

At the same time Mr English, waiting for proposals from providers interested in the 348 Housing New Zealand properties in Invercargill and the 1124 properties in Tauranga that it proposes to transfer to community housing providers.

Expressions of interest close on February 9, 2016.