Finance minister promises to ramp up construction to meet state house goal

The Government's goal of building 2000 new state houses in two years has been questioned after it was revealed that it had built only 68 homes in the past year.

Finance Minister Bill English said this week that the National-led Government was committed to rebuilding the social housing portfolio by ramping up the rate of construction in the next two financial years.

But the ambitious goal of 2000 new homes was called into question in a select committee by MPs who noted that Housing New Zealand had built only 68 state houses in the last financial year.

Green Party MP Holly Walker pointed to this sluggish rate of new construction, and a sharp decline in the state housing stock last year, as evidence of a "stealth sell-off" of state houses.


From 2008 to 2011, the National-led Government built up the state housing stock by around 1000 properties. This trend dramatically reversed last year, with a net loss of 310 homes.

Housing Minister Nick Smith said the building of state houses in the past two years had stalled because the Government had put its energy into other projects - upgrading state houses' insulation and repairing homes damaged in the Christchurch earthquakes.

He said HNZ had begun an ambitious new programme of mixed housing developments in Auckland and Christchurch.

HNZ chairman Alan Jackson told the committee of a new 1,800-property development, of which 600 homes would be state houses.

Asked whether the Government could accelerate from its current rate to build 2,000 homes in a short timeframe, Dr Smith was tentative: "I am not yet at the point where I can tick off and say they are going to meet all of those targets."

The Minister emphasised that the Government was expanding the role of social housing providers to meet the demand for state housing.

He announced $3 million in new grants yesterday for three social housing trusts, part of $104 million in funding over three years.

The Opposition highlighted that the new funding injection would create just 26 homes and would do little to shorten the long waiting list for state houses.


Dr Smith said the net loss in housing under National since its re-election was of "no concern". The Government was focused on supplying houses where the demand was greatest. This meant selling state houses in rural areas and increasing the number of properties in Auckland and Hamilton.

"I am determined to shift the quality of housing debate from the simplistic notion that the quality of housing policy is measured by the number of state houses," he said.

Ms Walker said this approach was reasonable, but was undermined by the fact that more than 1,000 usable state houses were sitting empty.

At present, more than 3,400 state houses were vacant, 1,750 of them in a condition good enough for tenants to move in.

New HNZ chief executive Glen Sowry said this week that the corporation needed to reduce the amount of time homes were vacant. This had jumped from 37 days five years ago to 68 days last year.

Missed target
Goal: Construction of 2,000 new state houses in two years

Rate of construction:
2011/12: 68 new builds
2010/11: 112 new builds