Ambitious plans to boost non-government social housing appear to have been deferred in the drive to achieve a "zero Budget".
Grants to non-government housing bodies have been cut from $37.4 million last year to $34 million in the coming year and an average of $35 million a year over the following two years.
An extra $37.6 million has been allocated for increased rental subsidies for state house tenants, reflecting a widening gap between market rents and Housing NZ rents, fixed at 25 per cent of tenants' income.
But there is no sign of any rental subsidies for non-government agencies, despite an expectation that they will pick up a growing share of social housing for low-income tenants.
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An advisory group led by current Housing NZ chairman Alan Jackson recommended two years ago that the Government should transfer state houses or capital to non-government agencies to help them provide 20 per cent of all social housing within five years, supporting them with rental subsidies for high-need tenants.
Housing Minister Phil Heatley said last year that he wanted a "radical increase in housing stock" with "a diversity of housing providers".
Yesterday's Budget suggests that goal has become more tentative, describing the Social Housing Unit's task for 2012-13 as: "Process developed for allocating the social housing fund and possible stock transfers that meet Government and probity requirements."
Funding for the Welcome Home loan scheme, which underwrites loans up to $350,000 to borrowers on household incomes below $85,000 a year, drops from $7.8 million to $4.3 million as rising house prices and incomes reduce the number of potential borrowers.
New capital for Housing NZ to buy, build and modernise state houses drops from $12.6 million to $10 million.
But administrative costs for leaky home claims go up from $18.7 million to $35.7 million, and subsidies for first-home buyers putting their KiwiSaver funds into a house go up from $10.6 million to $13 million.