A housing provider that snapped up 1138 former Tauranga state homes in 2017 says it has spent millions of dollars on maintenance and the homes "were not of the standard we expected at purchase".
But Treasury, which managed the transfer process on behalf of the Crown, says it commissioned independent due-diligence reports on the condition of the properties, which attracted interest from experienced public housing providers who took that into account when proposing a price during the tender process.
Accessible Properties won the tender and the assessments focused on current condition only, a spokesman said.
"Providers were expected to use their experience to formulate costs and plans for maintaining and upgrading the properties over time."
The controversial sale happened under National and party leader Simon Bridges said the "money in dispute is small beer in comparison with the overall value of the houses, which must be in the many hundreds of millions and probably more".
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But Accessible Properties Tenancy Services Tauranga general manager Vicki McLaren said it had spent more than $11.3 million on maintenance and had budgeted another $12.7m "to tackle the deferred maintenance" in the next 30 months.
After taking over the portfolio Accessible Properties assessed the work required to bring the homes up to an acceptable living standard, intending the condition of every home to be "better than moderate".
The estimate of costs for this work was about $7.6m.
McLaren said Accessible understood that once the decision had been made to sell the houses, "work in a number of areas ceased, contributing to the level of deferred maintenance".
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"Since acquiring the properties, we have undertaken robust inspections of the homes and talked with tenants about the work that needs completing on their homes."
She said Accessible found the properties acquired in 2017 "were not of the standard we expected at purchase, with the interior condition of many homes not meeting the standard we would expect".
The average age of the houses was 38 years.
McLaren said the maintenance included painting, interior decorating, carpeting and curtaining, replacement of worn out or broken fittings and fixtures, fencing, roofing, and grounds maintenance.
"People deserve a home that was warm, dry and that doesn't contribute to health concerns of the people who live in them."
The houses also needed to meet healthy homes requirements plus Accessible had rolled out a carpet and curtain programme across the portfolio.
Associate Housing Minister Kris Faafoi said Labour opposed selling the Tauranga state houses in the first place and its stance had not changed.
An ownership change would not help "desperate Tauranga families living in garages and campgrounds" to find an affordable rental.
At the time of the sale, Housing spokesperson Phil Twyford also said it was "immoral" and "untenable for National to persist with their state house sell-off when the country is in the grip of a housing crisis".
But Bridges said the disagreement over the sale was for ideological reasons and Labour had done nothing to transform the old homes that are past their use-by dates into new, smaller, modern homes that could solve most of Tauranga's social housing problems.
This was always the plan, he said.
"Renovation has happened in one location opposite the hospital where two or three old houses have become many more new townhouses for many more people.
"But this work must happen faster and for all of these houses around Tauranga. If it did, taxpayers' money wouldn't have to be wasted on maintenance and, as I say, we would be well on our way to solving Tauranga's social housing problems."
Last year Accessible announced ambitious plans to replace 140 former state homes in Gate Pa with more than 400 new townhouses and apartments.
Chief executive Greg Orchard said the move was spurred by Tauranga's housing crisis, increasing property prices and the city's population explosion.
But the project, which was expected to cost "hundreds of millions of dollars", needed to work in partnership with — and required investment from — the Government, developers, iwi and other stakeholders.
Meanwhile, to December 31, 2019, an additional 21 homes had been added to Accessible's portfolio and six more were being built.
Another 12 projects were at contracting, design or consenting stage and planned for completion in the 20/21 financial year. A further 21 projects are being investigated to provide more housing.
Kainga Ora, formerly known as Housing New Zealand, also hoped to deliver 50 to 150 additional state houses in Tauranga by 2022.