Plans, land and demand in place as housing providers wait on Government nod

Saturday, 13 September 2025

The plans are ready, the land is available and the demand is there - all that’s needed for some Community Housing Providers is the go-ahead from the Government.

Dwell Housing Trust is one of 92 so-called CHPs vying for a slice of the $140 million budgeted to build 1500 social housing homes over the next two years.

So far, just two providers have been approved for the Wellington region - to build just under 50 homes in Wellington city, with 159 expected to be delivered across the wider Wellington region by June 2027, though these numbers could change.

“The need is so great, CHPs are ready to go with solutions but while there’s talk of them being empowered, it still doesn’t meet the need,” says Dwell Housing Trust chief executive Elizabeth Lester, who has a Newtown site that the trust is itching to build on.

The Government is rethinking social housing, directing funding away from Kāinga Ora’s state housing and towards CHPs after a review saw Kāinga Ora cancel plans to build nearly 3500 new homes around the country, including 100 in Wellington city and possibly a further 300 as a decision awaits the Arlington development.

Porirua, Auckland, Hamilton, Tauranga, and Nelson-Tasman, have been prioritised for CHP-delivered houses but despite a waiting list of more than 600 people for social housing - twice as many as in Porirua - Wellington City has not.

Meanwhile, the number of rough sleepers on Wellington’s streets has surged by a quarter, with 141 people rough sleeping in the capital from January to March.

'The need in Newtown is so great the amount of people the Government has confirmed homes for could be found on the streets in under half an hour,“ said Lester.

The new approved CHPs - there are just five so far in all of New Zealand - will receive funding through Income Related Rent Subsidies (IRRS), a scheme which sets rent at 25% of the market value for tenants, with government topping up the rest and enabling providers to recover costs on its rentals over time.

In Wellington, the two new approved CHPs are Ngāti Toa-owned Te Āhuru Mōwai Limited Partnership and The Salvation Army. The other three the Government’s selected are Accessible Properties New Zealand Limited, Community of Refuge Trust and Emerge Aotearoa Housing Trust.

Te Āhuru Mōwai Limited Partnership is already under way with two developments and 17 new homes in the Wellington region, with one development set to be completed by Christmas.

While Kāinga Ora didn’t receive IRRS funding, builds are still ongoing from previous budgets, with 2650 homes expected to be added to the social housing stock across the country by 2026.

26 homes ready to go in Newtown’s heart

Dwell Housing Trust applied for resource consent for 26 new homes on the old Wellington City Mission site in Newtown in June last year, but has not yet secured funding.

Lester said the site was located where there was “a real homelessness need,” with ministers recently urged to walk the streets as the suburb’s rough-sleeping crisis deepens.

Lester, who is talking to the Government about funding, wants to work with officials to find a solution, saying there were many providers missing out on funding when they knew their community best.

“We have no certainty, we have existing land we are servicing debt on that we don’t know the future of.”

“If there’s 130 people on the street and we are building less than 50 homes they’re not trying to put those people into long-term homes.”

Downtown Community Ministry (DCM) acting chief executive Natalia Cleland said what the amount of funding the Government was investing was not relative to the need.

“If someone's ready to go and has resource consent … then give them the IRRS and just let them get on with it because we don't need to keep clogging up the infrastructure for Wellington.”

Wellington needed the properties now, she said, and in five years’ time, there would be five years worth of people with severe housing need.

DCM’s role is to support people into housing, not provide it, so it hasn’t received any IRRS placements, but Cleland said 30% of the people they supported could not access housing and were in long-term chronic crisis.

Housing Minister Chris Bishop said homelessness was a complex problem that New Zealand has been grappling with for decades.

He said the part of the solution to clearing the wait list was improving rental affordability.

“Rents in Wellington are actually falling, new private sector rentals are falling, which is good because it's making renting a more affordable option for people and over time, that will help reduce the wait list.”

He said the now paused Kāinga Ora developments were a “pipe dream” that were never going to be built.

Wellington Central MP Tamatha Paul said while people “rightly” pointed out issues with Kāinga Ora when it came to their developments and inefficiencies, it was due to being routinely stripped back and taken apart every time the Government changed.

“We need cross party commitment to an ambitious public housing build programme that spans generations.”

Paul said anyone with eyes could see the housing crisis in Wellington had stooped to a new low, and by being told the city was not a priority area, had missed out on the very small amount of assistance that this Government was willing to dish out, while they gave billions over to landlords.

Te Toi Mahana, Wellington’s existing community housing provider established in February 2023 to take over the Wellington City Council’s housing portfolio, has IRRS placements.

The Government allocated 380 IRRS tenancies to be filled by Te Toi Mahana by June this year, but because it can assign them only to tenants housed since its establishment and not existing tenants just 240 have been taken up.

With a turnover of tenants of just 10% annually, it is taking time to allocate the places so the government had extended the deadline by a year.

Funded CHPs feeling ‘optimistic’

Paul Gilberd, chief executive of the umbrella group for CHPs, Community Housing Aotearoa, said he had heard frustration from members who wanted to do more.

Despite the challenges, Gilberd expressed optimism about the Government’s direction, especially its commitment to flexible funds, though it replaced previous housing programmes like the Affordable Housing Fund, the Progressive Home Ownership Fund, and remaining Whai Kāinga Whai Oranga funding.

The Flexible Fund consists of $250m capital over the next 10 years and $41m operating funding over four years and will enable up to 650 to 900 social homes and affordable rentals over the next 10 years.

The fund targets not only social housing but affordable rentals to focus on particular needs in particular regions. The funding includes funding for new IRRS social housing, Affordable Housing Fund and Whai Kāinga Whai Oranga - which funds Māori housing projects.

The intention is for providers to deliver different housing types, which Gilberd said was something to celebrate.

“In the glory days of New Zealand history from the 50s to the 80s, social housing was mixed in with market housing, it wasn't nobody's business whether or not you're getting help from the government to pay your rent.”

Gilberd said providers who did not receive funding should look to other tenures and offerings, such as making deals with local government and churches who could bring land to the table, which could halve the cost of the project.

Salvation Army social housing director Greg Foster said providers will see “significant growth” as a result of the commitment to easier borrowing.

Where Kāinga Ora borrows through the Crown, CHPs have until recently had to access debt from the private market at higher rates making it more expensive for them to deliver social homes.

Earlier this year the Government established Crown lending facilities of up to $150 million for the Community Housing Funding Agency (CHFA), which last week obtained an A+ credit rating from international ratings agency S&P Global.

Moving to new loan terms financed by CHFA could save up to $75,000 over the 20 to 25 year average term of existing contracts, which could be reinvested into social programmes and will less upfront and ongoing funding from the government.

For new CHP social housing, the Government is expected to save $115,000 to $120,000 per house over the life of a 25-year IRRS contract. “This means we can do more to help people in need with the same amount of funding,” said Bishop in a statement.

IRRS funding was critical, said Foster, but providers had to borrow a significant amount. “If there are mechanisms that the Government can put in place that make our borrowing less, then it's less of a risk.”

The Salvation Army had an resource consent application for 25 new homes in Newtown on a site it already owned with 23 units.

Foster believed funding CHPs was a better investment long term, as providers often delivered wraparound services for its tenants that Kāinga Ora could not.

Larger CHPs had stronger balance sheets and were able to borrow more, he said, meaning housing could be delivered at a faster rate.

Te Āhuru Mōwai has received IRRS placements for Wellington City, with 115 to 125 homes to be built from Paekākāriki and Whareroa down to Grenada and Tawa in Wellington City.

Chief executive officer James Te Puni believed any number of homes the government funded was a good number and without funding, homes could not get built.

“More than 100 [households] without housing get housing as a result of this work.”

‘Wellington needs the properties now’

In August, housing minister Chris Bishop revealed 45 homes had been built across the country so far since the 2024 Budget started allocating funding in July this year.

Labour acting housing spokesperson Arena Williams said it was “an absolute disgrace” only 45 homes had been built so far, while more than 600 people sat on the wait list for homes in Wellington.

“Christopher Luxon is destroying public housing in New Zealand, and is putting people on the street to balance his budget.“