Pensioners, disabled people and low-income families will benefit from a surprise Government decision to fund 508 social housing units in Auckland.

Social Housing Minister Paula Bennett says five community agencies will get income-related rental subsidies to provide the 508 new homes, up from 300 planned when a tender was unveiled in May.

The Government will also chip in $10 million in upfront non-repayable grants, which the Social Development Ministry said could be used "as a contribution to development costs for new builds, or as finders' fees for new leasehold properties".

"This is not an advance to be paid back," the ministry said.

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IHC subsidiary Accessible Properties gets subsidies for 58 new homes for 25 years, and for 300 homes to be leased from private owners for five to 10 years, including the bulk of the $10 million upfront grants plus extra for managing the leasehold tenancies.

General manager Andrew Wilson said the company was looking for sites for new builds and leases in South and West Auckland, including one- and two-bedroom units and five-bedroom homes. The new units will be accessible for disabled people, but the leased homes will be for anyone on the social housing waiting list.

The Salvation Army gets subsidies for 20 years for 50 new pensioner flats in a planned $25 million multi-storey development behind its regional office in Royal Oak, plus 37 subsidies for existing pensioner flats elsewhere in Auckland.

Spokesman Major Campbell Roberts said the ministry would pay about $1 million upfront and would fund a fulltime tenancy manager.

The Chinese New Settler Support Trust gets subsidies for 16 years for a $10 million, four-floor block of 36 pensioner units on the site of its former office at 15 Clifton Court, Panmure.

A further 27 subsidies will go to two other unnamed providers who are due to sign contracts shortly.

The subsidies pay the difference between social housing rentals, which are fixed by law at 25 per cent of tenants' incomes, and market rents.

The Auckland social housing waiting list stood at 2172 households at the end of September.

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The ministry has also opened a tender for a further 1000 city places.

New social housing

• 358 units for Accessible Properties for disabled people and low-income families.
• 87 pensioner units for Salvation Army.
• 36 pensioner units for Chinese New Settlers Support Trust.
• 27 units for two other unnamed providers.