Government says its proposal to lease some state houses instead of selling them does not mean one of its biggest policies has failed.
Social Housing Paula Bennett said today that leasing some of the state houses was always a part of Government's plan, and it was not a response to a lack of interest from community housing providers.
"We're looking at everything at the moment," she told reporters. "This is part of a discovery process as we look at community housing providers - what works best for the tenants and how we can increase their involvement in social housing.
"For some, I'm sure there will be elements of leasing, and others I can see buying outright."
While some large non-government providers have expressed an interest in buying state houses, others such as the Salvation Army have said they did not have the capacity to get involved unless part of a consortium.
Government revealed on the weekend it was also open to selling the houses to overseas organisations.
Brisbane-based not-for-profit charity Horizon Housing has expressed an interest in purchasing 400 properties.
Mrs Bennett said that was nothing new. Local branches of foreign organisations were already involved in social services in New Zealand.
The proposal to sell some of New Zealand's state housing stock to overseas owners later came under heightened scrutiny in the debating chamber.
Labour leader Andrew Little questioned how a Gold Coast-based provider would be responsive to the needs of New Zealand families in social housing.
Prime Minister John Key said any overseas provider would be required to be registered in New Zealand, to regularly engage with tenants, and to carry out routine inspections, maintenance and repairs.
He added: "If the head office of a company or organisation rules somebody out from doing anything then I suggest the member never go and have another Big Mac because .... the head office is in America."
Speaking to reporters, Mr Little said Housing New Zealand had managed social housing for 80 years.
"What has changed that has meant they have to hand this over to an outfit on the Gold Coast?"
He said that an increasingly run-down housing stock did not mean that the properties should be sold off.
"Let's go off the ideology and flogging off state assets to overseas owners and let's focus on the real issue which is getting Housing New Zealand back doing the job it's meant to be doing."
Government has identified Tauranga and Invercargill as the first two places where state houses would be sold.