The Ministry of Education (MOE) sold land in Whangarei to Housing New Zealand for hundreds of thousands of dollars under what it was deemed to be worth by Land Information NZ.
But Whangarei Mayor Sheryl Mai said she is not really worried about how much was paid for the land and was happy to see more social housing coming in the area.
Almost 33,000sq m of land on Puriri Park Rd, adjacent to Puriri Park in Whangarei, will likely be used by HNZ for social housing.
Correspondence between HNZ, Land Information New Zealand (Linz) and an independent property valuer, released under the Official Information Act (OIA) show the property was sold for $1.35 million (plus GST).
This is despite previous emails, also released under the OIA, revealing the property was worth more than that.
"Linz hold a CMV [current market value] for $1.6 million and HNZC [Housing New Zealand Corporation] hold a CMV for $1.45 million."
But both MOE and Linz said the sale was fair and the valuation of the land fluctuates.
Mai said when the land was owned by MOE, it had been earmarked for a future school site, but it was never built.
The emails show the land would be likely used for additional social housing and would likely be high density.
"Given this is a Crown to Crown transaction and the new Government has stated their desire to build more social/state housing, Linz are mindful of seeking an acceptable solution for all parties."
National Whangarei MP Shane Reti said the message this sends from the Government is "housing trumps education".
"The Government's negotiations with teachers haven't gone well thus far, with teachers in Whangarei beginning rolling strikes today, so to blatantly put housing ahead of education is unlikely to help future negotiations."
Education Minister Chris Hipkins said he rejected Reti's suggestion that the sale shows housing trumps education.
Housing Minister Phil Twyford called on Reti to "show some leadership and support to the proposed housing development".
"With 206 families and individuals on the waiting list for public housing in Whangarei, it will provide desperately-needed additional housing."
Reti said many in the Whangarei community were upset they were not consulted before the land was sold to make way for more social housing.
But Mai said she was comfortable with the land being used for social housing, as long as it fits the council's district plan.
"There is definitely a shortage of housing across the spectrum of need. We're in a deficit situation – so building new homes here in Whangarei, I welcome that."
In terms of the sale, she said its public money buying public land at a discounted rate – "do I think that's a good thing? Probably."
In a statement to the Herald, MOE Head of Infrastructure Service Kim Shannon said there was a range of valuations for the land, ranging from $1.1m to $1.65m.
After a period of negotiation, she said Linz offered the site to Housing New Zealand at $1.35m.
"We accepted this as a fair value offer considering we had been looking to sell for several years and were preparing to proceed to open market with this property, which would have incurred costs in the vicinity of $60,000-$80,000."
She said the transfer of this property through this process has allowed for the freeing up of education resources to reinvest in the school estate and reduce other costs.
"It also enabled another agency to secure a property that will support its work to meet community needs."
Linz deputy chief executive of Crown property Jerome Sheppard said valuations on the land price fluctuated from $775,000 to $1.6m.
He said it is also important to keep in mind that this is a transfer between two Government agencies for the use of land in an area of "high priority".