Labour wants $950m increase of Crown guarantee for community housing

Wednesday, 24 June 2026

Labour has committed to increasing a Crown underwrite for an agency focused on funding more community homes.

Housing spokesman Kieran McAnulty made the announcement this morning, suggesting the fund had been “neglected” by the current Government.

Typically Labour seeks to highlight state housing built through Kāinga Ora, rather than other social housing built by not-for-profits in the community sector.

McAnulty is pledging in Budget 2027 to create a $950 million Crown guarantee for the Community Housing Funding Agency (CHFA), which itself lends money to community providers to build homes. A Crown guarantee would essentially allow the fund to borrow money at far more attractive interest rates.

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McAnulty said this would cut the interest rates for the agency by about half a percentage point.

“By enabling AAA-rated borrowing, interest rates for housing providers are cut, and those savings are invested in building more homes. The maths is straightforward, the CHFA estimate for every 11 homes built, the financing efficiency could pay for a 12th, at no additional cost to the taxpayer.

“That means more homes can be built with the same investment. Every dollar saved on interest is a dollar that can go into building homes and supporting tenants.”

He said it would only have to actually be spent in the “unlikely event” of a default in the community housing sector.

McAnulty was critical of the Government for not providing the guarantee, but Housing Minister Chris Bishop has moved to lower interest costs for the sector.

The CHFA was created by the Government in 2024 in an attempt to level the playing field between Kāinga Ora and community housing, as Kāinga Ora could typically borrow with very low rates using its huge asset base as a guarantee.

Bishop announced a $150m Crown lending facility for the CHFA and a Bank Loan Guarantee scheme which backs up to 80% of new lending, up to a total of $900m.

He said this had enabled the CHFA to already get funding at very competitive rates.

In September of last year CHFA obtained an A+ rating from S&P Global, compared to AAA for the New Zealand Government’s general borrowing in local currency.

Higher ratings for the CHFA would meaningfully lower its borrowing costs. On a $10m bond, even half a percentage point is worth about $50,000 a year.

Bishop said in a speech on Wednesday he was proud of the work done so far on community housing.

“CHFA is already helping CHPs access finance. They have advanced $530m of funds nationwide and financed 34 community and affordable housing providers. This frees up resources to deliver more homes, faster, and for less,” Bishop said.

“With the banks, CHPs were paying about 8.5% interest rates, and now CHFA is enabling refinancing at a fixed rate of 4% for three to five years.“

He told The Post any claim that the sector had been neglected were wrong and Treasury had advised against the measure Labour was pursuing.

'Treasury advised against a Crown guarantee for CHFA bonds because of the significant fiscal costs and precedent risks involved. The Government chose instead to back the sector through targeted measures that are already lowering financing costs and supporting the delivery of more social and affordable housing.“