"There are significant cost implications to new state/social housing supply."
The briefing paper (BIM), titled Housing and Urban Development, gave an overview of the state and social housing sector - including emergency and transitional housing.
It was put together by the five agencies with roles in the sector, including the Ministry of Social Development, Ministry of Business, Innovation and Employment, Housing New Zealand, Te Puni Kokiri and treasury.
A separate briefing paper on the overall housing programme compiled by MBIE, MSD, Treasury and HNZ showed the cost of building 1,000 social houses a year would be about $100 to $180m a year.
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Briefings to incoming ministers: The highlights
The agencies called for a meeting to discuss whether its existing target of 6400 by 2020 should be revised in light of "increasing demand and your priorities".
It also labelled the need to identify priorities for the 2018 budget as a high priority and initial advice on this needed to be made by November.
"Officials would like to discuss your views on an appropriate level of supply and whether you would like to seek a greater level of supply from HNZC than currently proposed, as well as other options for new supply, including partnerships with community housing providers, local government and iwi.
Current stock and demand
Twyford has pledged the Government would aim to build a minimum of 1000 state/social houses per year until demand is met.
Currently the report showed state and social housing funded by central government only accounted for around 4 per cent of the total residential housing market in New Zealand and around 11 per cent of the rental market and is very costly.
The report showed there was a total of 66,187 social houses across New Zealand, of which 61,313 were owned or leased by HNZ. The remaining were owned by registered community housing providers.
MSD also planned to buy more homes to increase the number of social houses to 72,000 by June 2020.
Meanwhile the social housing register grew 27 per cent in the year to September and 72 per cent in the last two years, with Auckland accounting for the majority of applicants.
At the end of September there were 5844 on the housing register, up from 4602 in 2016 and 3399 in September 2015.
What's driving demand
The briefing paper acknowledged demand was increasing rapidly, "driven significantly by declining housing affordability and a shortage of affordable housing for private rental or ownership.
"Other social factors also contribute to people's ability to access or sustain housing in the private market, such as addiction issues, mental health conditions and having a history of offending.
"Increasingly clients presenting in need of emergency and state/social housing have complex needs not met by other parts of the social and justice sectors."
Main reasons for applying for state housing were reported to the agencies as unsuitable housing and homelessness.
Single adults made up 47 per cent of those on the social housing register, followed by single adult with children, 35 per cent.
Future solutions
The BIM on housing suggested a solution to the increased pressures could be helped by addressing the shortfall of housing in the private market to ensure the housing supply responds effectively to demand.
It said growing need for housing assistance cannot be effectively addressed without policy changes to increase the supply of affordable housing for both ownership and private rental.
However, it acknowledged this would take time and in the meantime there was a greater need for government intervention - including "an increase in the level of state/social and emergency housing in the short to medium term".
The report also suggested changes to housing subsidies could offer an effective safety net for those on the lowest incomes and said the MSD could provide further advice on this.
A delicate balance
Meanwhile, in its own separate BIM, HNZ has painted a picture of how demand for social housing is putting pressure on its services.
It has identified a need for a long term sustainable financial strategy as it grapples with this increased need for homes.
In the state housing agency's briefing to the new housing minister Phil Twyford released today it said rents alone were not sufficient to cover its operating costs "let alone costs of land, and building".
The briefing paper (BIM) dated October 2017 gave an overview of its work to date and its targets for the future.
To date the agency said it had managed to keep the financial books balanced through a number of strategies including targeted sales in poorer performing areas and intensification of land use, particularly in Auckland.
However, it said as things change in particular with the increase of supply of state housing it was crucial it developed a long-term financial strategy.
Building capabilities
As part of the BIM the agency unveiled how over the next 20 years it planned to renovate or rebuild 45,500 homes, with a target to reducing the cost of building while maintaining quality.
Strategies to reduce cost included building at higher densities, developing standard designs, and pre-fab builds as well as negotiating better labour costs from builders.
Already it had a total of 9,351 properties that were "in the pipeline" at various stages of development - of these 66 per cent, 6168, would be HNZ owned homes.
As well as the physical builds, HNZ officials identified its desire to move beyond just providing a roof over its tenants heads to helping with the bigger social picture and providing inbuilt social support services to help them on the path to "housing independence".
"Our tenants are some of the most vulnerable people in the country and the proportion with high and complex needs is increasing."
One of its already implemented strategies included working on a trial to support 1,000 tenants in Auckland, Wellington and Christchurch stay in their tenancies.
It said further exploration was needed around the shape of the social housing sector, how to fund the growing costs of social housing tenants, whether renting to non-social housing tenants could be an option and greater social support services through HNZ and potential partner agencies.
