Kāinga Ora ‘turnaround plan’ announced following review

Tuesday, 4 February 2025

The Government has released a Kāinga Ora ‘turnaround plan’ which involves selling about 900 state houses a year, offset by building new homes and retrofits of existing homes.

Housing Minister Chris Bishop released the plan on Tuesday, following a critical review of the housing agency led by former PM Sir Bill English.

“This is a plan to get Kāinga Ora back on track. It’s a plan to return it to financial sustainability. And it’s a balanced plan that means we can continue to invest in provide new, warm dry homes for new Zealanders and very critically also look after the very aged stock that KO has,” Bishop said.

From 2026/7 onwards, Kāinga Ora will be either building or retrofitting 1900-2000 homes per year. That total will be 1500 new homes and 400 retrofits.

There will be demolitions associated with redevelopment and sales of 900 homes per year.

“This means the number of KO social houses will not reduce over time, and existing older or unsuitable housing stock is refreshed.”

A Cabinet document from December has ministers agreeing in principle to 1500 new homes “through renewals and market acquisitions”, 400 retrofits, 700 demolitions of existing properties for future redevelopments and 800 sales of properties for 2026/27.

That review, released in May, said Kāinga Ora’s performance was deteriorating and its ability to maintain and renew its assets was at risk. It made seven recommendations for Kāinga Ora, the Crown agency which manages public housing and provides tenancy services for those in need.

Bishop said the five main components of the plan were for Kāinga Ora to be refocused on “building, maintaining and managing quality social housing, and being a supportive, but firm landlord”, improved tenant and community management and an improved housing portfolio and build management.

He wanted an improved organisational focus and a sustainable approach to funding.

Bishop said the sales would focus on older houses in high value areas, “with the proceeds going to provide multiple other units in different areas”.

“The sales programme will also focus on houses which are not fit for purpose, where the typology is ill-suited to the particular area, or which are simply uneconomic to maintain or redevelop.”

Bishop said in the past five years, Kāinga Ora had sold, demolished or ended the lease “on more than five thousand properties as part of their normal stock renewal process”.

“The plan allows them to do more of this so the old, unfit housing stock can be renewed more quickly.”

The Green Party accused the Government of “deliberately stripping Kāinga Ora to the bare bones, playing straight into the hands of wealthy landlords looking to exploit housing insecurity for private profit”.

“We cannot rely on the private market to solve our problems, we have seen it entrench poverty and homelessness across generations,” housing spokesperson Tamatha Paul said.

Newstalk ZB reported in August last year Kāinga Ora had sold 167 houses from 2019 to the start of 2024, for more than $80 million overall.

In January 2020, before the Covid-19 pandemic reached New Zealand, the Government allowed Kāinga Ora to more than double its capacity to take on debt in order to build new state houses.​​​​​​

In 2022, the previous government agreed to increase Kāinga Ora’s borrowing capacity by $2.75 billion for the 2022/23 financial year.

Also that year, a briefing by the housing ministry into the finances of Kāinga Ora, formerly Housing NZ, revealed that rising construction costs and interest rates meant it would be unable to pay its billions in debt by 2081.

At the time, the agency’s debt was expected to peak at $28.9b in 2033. By 2081, there would still be $8.9b to pay off.

Labour's housing spokesperson Kieran McAnulty at the time accused the previous National government of leaving the social housing stock “decimated”.

“Labour delivered over 14,000 additional public homes since 2017, more homes than any government since the 1950s.”