Kāinga Ora boss Andrew McKenzie is defending his agency's controversial policy banning the eviction of antisocial tenants, saying making marginalised people homeless doesn't work.
And he's fired a broadside at private homeowners who think disruptive Kāinga Ora tenants should be held to higher standards than other residents, simply because they live in state homes.
"They haven't actually broken the law.
"We're not downplaying the impact on people but it is tough to get that balance between housing people in need and preventing homelessness."
Meanwhile, a lawyer dealing with victims whose lives have been turned into "living hell" by their state housing neighbours is calling for the Government to offer a redress package to compensate people and ensure they are safe.
Litigation expert Adina Thorn says she's been inundated with victims' horror stories and says the Government has a duty to act.
A Herald investigation has revealed dozens of cases where tenants or private homeowners say they've suffered prolonged harassment and abuse from Kāinga Ora clients.
The victims claim to have fielded death threats and obscenities, been exposed to street brawls, property damage, loud music, dumped rubbish, foul language and intimidatory behaviour, often involving gang members.
Thorn says a Kāinga Ora's policy that has seen just three state housing tenants evicted since March 2018 is "arbitrary" and likely unlawful.
She is considering a class action on behalf of victims but says litigation is a last resort and she wants the Government to offer compensation and redress.
Thorn said the number of victims coming forward highlighted the scale of what was a nationwide problem.
"The state of this is so serious. We're dealing with unsafe environments."
McKenzie confirmed there was "absolutely" a policy not to evict antisocial or disruptive clients. But he denied this was a Government directive.
Kāinga Ora's role was to house people who qualified for state properties. Many clients had complex needs such as addiction or mental health issues, and "really tough back stories".
Most of its clients were great tenants who respected their homes and neighbourhoods. But a small minority were "hard to live beside" and caused unacceptable disruption.
While Kāinga Ora worked with affected neighbours to try to resolve problematic cases, its job was give people stable homes and he made no apology for the no evictions policy.
"This is not our problem, it's the community's problem.
"If they've broken the law the justice system has a threshold where they will be removed from the community
"We can move people but we haven't solved the issue. It's just shifting the problem somewhere else.
"We're set up to house people, not to make people homeless."
McKenzie said often Kāinga Ora tenants were not the ones causing problems, but people associated with them who visited the property.
He sympathised with cases highlighted by the Herald in recent weeks, which would be reviewed to see what improvements could be made, but McKenzie had no plans to review the evictions policy.
Sustaining tenancies meant Kāinga Ora staff could work with tenants to provide necessary support and prevented clients and their children from becoming transient at further social and economic cost.
"We want people to be good neighbours.
"There are some people who are really tough. The challenge for us is to work out how we stop that behaviour as opposed to pretending it no longer exists."
The agency has previously told the Herald evictions were only used rarely and in "extreme" cases.
McKenzie said Kāinga Ora could still use the eviction process, for example where a tenant refused to move and there were no other options available, or the home had been abandoned.
His legal team was assessing whether Kāinga Ora could be open to a class action.
"We're obviously looking at that situation and we will respond to documents as they're served."
National housing spokeswoman Nicola Willis has called for the eviction ban to be reversed, saying there must be consequences for people who use state tenancies "as a platform for victimising others in such a revolting way".