While KiwiBuild falters, state house build rockets ahead with ninefold increase
Source: https://www.stuff.co.nz/news/113402379/-

2019-06-11 07:56:31

KiwiBuild may be faltering, but the Government seems able to deliver on one house-building plan: State homes.

The number of state homes being built by Housing NZ has increased ninefold over the last three years, figures prepared for Housing Minister Phil Twyford's estimates hearing on Wednesday morning and provided to Stuff show.

There are 2700 state homes under construction, with 1389 due for completion before July 2020. In June 2016 just 282 homes were under construction.

Figures from a Housing NZ document provided to Stuff under the Official Information Act detail the revamp of Housing NZ that has allowed this to happen, including a massive increase in the amount of land in the pipeline for state homes: From land that could hold 1500 homes to land with the capacity for 46,000.

Other internal changes have cut labour costs by 15 per cent, increased employee numbers, and halved the amount of days a vacant property is kept vacant before being re-tenanted, from 38 days in June 2016 to 19 days in June 2018.

Housing NZ expects to deliver a net figure of about 1100 homes every year over the next three years after building 1043 in 2017/18 and an expected 1300 by July 2019.

Despite the massive increase, the waitlist for public housing has steadily risen to near-record highs with 11,067 eligible families on the waitlist at the end of March.

Housing Minister Phil Twyford says the increased programme will need to run for a long while yet before the un-met demand is met.

"It's the biggest build programme we've seen in decades, Twyford said. "We don't intend to slow down."

Despite this he did not seek new money for Housing NZ or permission for it to borrow any more in the Budget, as the agency had enough capital to use from its controversial $5.6b financing secured in the last Budget.

Twyford was clear about the fact that the increase in building capacity began before he became minister.

"In the last year-and-a-bit of the National government, they seemed to panic a bit about the housing crisis. They reversed the order they had given to sell off large numbers of houses and started to build, and they started to look at how they could look at how to use their land more efficiently," Twyford said.

"They increased their output, we put it on steroids."

"Housing NZ is doing something different and quite unique. It has a land asset in basically every region of the country. It's got a balance sheet worth $26b. And it now has a Government that has given it mandate to ramp up its build programme to build as many houses as it properly can."

Twyford said the $5.6b Housing New Zealand borrowed off its own books against Treasury advice was key.

The state home build figures do not include a further 600 or so new community housing places not operated by Housing New Zealand.

Auckland Action Against Poverty coordinator Ricardo Menendez March said getting the wait list down would require pouring far more money into Housing NZ directly, not through borrowing.

"The current Government targets for state housing don't scratch the surface when it comes to the need.

"It really does show that the Government needs to consider a reset for their state home targets alongside their KiwiBuild targets."

National Party housing spokeswoman Judith Collins has repeatedly said the wait list has ballooned because of rent rises brought on by Government changes.

"More people are leaving the rental market as landlords and just saying 'I can't be bothered it's too hard'," Collins said earlier this year.

"[Landlords] are being attacked by the threat of capital gains, the bright line test being increased to five years, all sorts of attacks on them especially by the minister - when so many of those landlords are just mum and dad buyers who are coming up to retirement or are saying it is too hard and are exiting the market."

Rents have risen under this Government, particularly in Wellington, but also rose steadily under National as the housing shortage ramped up.

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