A community housing provider has told the Government that it won't buy state houses when they're put up for sale this year unless the price is zero.

Neil Binnie of the Bays Community Housing Trust on Auckland's North Shore told Cabinet ministers Bill English and Paula Bennett at their first consultation meeting on state-house sales that a price of zero was the only way to fund both buying houses and redeveloping them.

"We are not interested in buying a house just to put another person in, but we are interested in buying houses for redevelopment. That would mean it makes more housing available," he said. "However, when we buy and build, the rent that we get if we are lucky, depending on interest rates, will cover the cost of building the property. That leaves zero for buying the property."

Mr Binnie said the trust had in the past been able to build new social housing with capital grants from the government, but those were no longer available.


"Right now, when we have competitive tendering, my tender for your property will be zero, and I don't think it's likely to win.

"So will you either be giving capital grants or leasing properties so community housing providers can in fact redevelop your properties?"

Mr English did not directly dismiss either option, but hinted that the first 1000 or 2000 state house sales would be in areas that did not need redevelopment, rather than in Auckland. "You'll just have to wait and see in February and March whether that applies in Auckland or not," he said.

On likely prices, he said: "This is all a process to figure out what they are really worth."

The next consultation meeting is this Friday in Rotorua.

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www. socialhousing.govt.nz