People who apply for a state house may be directed instead to a charitable housing provider under a bill introduced in the wake of this week's Budget.
The bill gives the Ministry of Social Development or another agency powers not just to assess people's housing needs but also to refer them to either Housing NZ or approved charitable providers.
The ministry will operate a common waiting list of applicants and will allocate people to providers based on each provider's criteria. For instance, the biggest charitable provider, IHC's subsidiary Accessible Properties, has 1,100 of the charitable sector's total of 5,000 homes and specialises in tenants with disabilities.
Community Housing Aotearoa co-chairman Warren Jack, the Auckland director of Habitat for Humanity, said charitable providers had some concerns about the bill but broadly welcomed it.
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"There would be some thought that the sector might be becoming an arm of government," he said.
"I think the sector would still prefer to have an ability to select the families that it houses. For us (Habitat), that would be the case. We go through an extremely rigorous selection procedure."
The bill, the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill, provides for community providers to receive subsidies covering the difference between market rents and income-related rents actually paid by tenants.
No details are provided on how the subsidies would be limited to the available funding, which has been capped at $2.9 million in the coming year, rising to $9.1 million a year by 2016-17. Based on current average subsidies to Housing NZ, that would cover only 812 of the sector's 5,000 homes by 2016-17.