Kāinga Ora is upgrading many of its older properties under its Retrofit Programme. Photo / 123rf
More than $410 million more is being budgeted to maintain state homes nationwide than was spent in 2020, yet thousands are sitting empty.
This year, the Government has budgeted $850m for maintenance, up on the 2020 spend of $440m, 2021 spend of $519m and 2022 spend of $652m.
However, in the past three years, spending has fallen under budget, with $451m budgeted in 2020, $558m in 2021 and $669m in 2022.
About 500 houses a week are being brought up to Healthy Homes standards, with 93 per cent of Kāinga Ora’s housing portfolio reaching the standard since its introduction.
Kāinga Ora data shows at the end of February, 3155 state homes were vacant nationally, including 55 in Rotorua and 35 in Tauranga.
Kāinga Ora maintenance contracting and asset services director Andrew Booker said its homes in Rotorua and Tauranga were at 93 per cent and 92 per cent occupancy respectively.
He said homes were vacant for several reasons, including the end of one tenancy and the start of another, major repair or upgrade work and redevelopment.
On average, a house was vacant for 24 days for general maintenance between tenancies, and longer for the implementation of Kāinga Ora’s Retrofit Programme, which aims to add another 50 years of life to the home.
“A significant amount of work goes into ensuring properties are vacant for as short a time as possible.”
High demand for tradies and materials could also impact timelines, but it managed to eliminate fluctuating costs with contracts and set rates.
“We review these annually to take into account market changes and other inflationary increases. Inflation and rising costs have not adversely affected maintenance and upgrades to our homes,” Booker said.
Kāinga Ora also took methamphetamine contamination “very seriously”.
Data showed 775 houses had been decontaminated or tested for meth nationwide since 2020.
“We also realise that meth is first and foremost a health and addiction issue and that it can impact all members of a household, including children. For that reason, we have adopted a health-based approach to managing meth,” Booker said.
Booker said healthy home improvements, planned maintenance programmes and responsive repairs were the reason for the increased budget.
Repairs could range from a broken window to exterior painting, or converting homes to a modern and open-plan living layout.
Nationally, 93 per cent of tenanted Kāinga Ora homes met the Healthy Homes standards or had work in progress as of February 28.
In Rotorua, 470 homes met the standards, and a further 160 homes were in progress, with 777 awaiting work. In Tauranga, 196 homes met the standards, and a further 80 were in progress, awaiting work.
“It is our largest planned maintenance programme to date in terms of breadth, complexity and volume, and we are completing Healthy Homes upgrades to around 500 homes per week. That is a huge task, but it’s also a hugely positive impact on people’s lives - that is 500 whānau every week benefiting from a warmer, drier and healthier home.”
From July 1, 2019 through to February 28 this year, it spent $385m on Healthy Homes. This year, $220m of its budget was for Healthy Homes, he said.
Kāinga Ora told NZME “inflation and rising costs have not adversely affected maintenance and upgrades to our homes”, due in part to fixed rates through national supply agreements.
Accessible Properties has 1208 community housing rentals in the Bay of Plenty and 1852 nationally. Its 2021/22 repair budget was $7.1m, and the 2022/23 forecast was $8.3m.
Chief executive Greg Orchard said increased labour, material costs and severe weather events in January and February had an impact.
About 80 per cent of homes in the Bay of Plenty met the Healthy Homes standards, and since January 2021, it had completed 20 meth decontaminations at a cost of $176,000.
Tauranga Property Investors Association spokeswoman Juli Tolley said maintenance costs had stretched budgets and landlords were doing jobs themselves.
“Some non-urgent jobs just don’t get done or are scheduled for later to stretch cashflow. You can’t spend what you don’t have. The other side is having to lift rents that little bit more to cover the costs.”
All trades had increased their rates, and a leak repair job, for example, was costing more than $200, up from about $130 last year.
Tolley said under Section 40, the tenant was obligated to advise the owner of needed repairs and maintenance.
“Failure to do so can lead to bigger, more expensive problems, and can also lead to the tenant being responsible. So, it is in their best interests to advise the landlord right away of any issues.”
Rotorua Property Investors Association president Sally Copeland said rising costs and interest rates meant many property owners had to top up their rentals with their own money.
She said to be profitable expenses needed to be paid out of the rent.
“Many property owners are having to use personal funds to top up their rental property business.”
In Copeland’s view, the Healthy Homes initiative had successfully raised the standard of rental properties in the market.
“Most property owners want their tenants to live in a warm, dry home. This initiative has meant that all property owners must comply with a basic standard, which is important.”
A Ministry for Business, Innovation and Employment spokeswoman said recent information from Stats NZ revealed the cost of residential property maintenance increased by 7.2 per cent in the year to December, compared to an 8.4 per cent increase in the year to September.
The Labour Cost Index for construction trades wage and salary workers increased by 4.2 per cent to December, compared to 4.1 per cent growth for all occupations combined.
Construction materials that contributed to the increase in the cost of residential property maintenance included panels, boards, veneer sheets and plywood up by 25.6 per cent; paints and varnishes by 8.3 per cent; electrical installation services by 7.8 per cent; and heating, ventilation and air conditioning installation services by 6.5 per cent.
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