More than 300 new Kāinga Ora homes will still be built in Rotorua over the next 13 months despite a Government shake-up of its housing arm following a highly critical report showing what an MP described as “whopping” debt.
There are at least 330 new homes budgeted for Rotorua by June next year and the Government says they will still go ahead.
The report on Kāinga Ora, released on Monday, found the housing agency was staring down the barrel of annual deficits of $700 million.
Led by former Prime Minister Sir Bill English, the report found Kāinga Ora exploited its easy access to Government credit, bingeing on borrowing without giving sufficient heed to the fiscal discipline taking on such immense debts would require.
Housing Minister Chris Bishop said the report found Kāinga Ora was “not financially viable without significant savings as well as funding and financing changes”.
Bishop said there “significant concerns” about the governance of Kāinga Ora. He indicated a total refresh of the agency’s board, but ruled out a mass sell-off of state houses.
At the completion of Kāinga Ora’s latest project – 20 apartments on Lake Rd – this month, Kāinga Ora Bay of Plenty regional director Darren Toy told the Rotorua Daily Post there were about 330 homes forecast to be delivered by the agency by the end of June 2025. Its website said this number was expected to reach 500 by the end of 2025.
The Rotorua Daily Post asked Bishop how the report would impact Kāinga Ora’s building programme in Rotorua, which according to its website would see 500 homes built by the end of next year.
Associate Housing Minister Tama Potaka responded, saying the previous Government funded 6000 new social homes through Budget 2023 to be delivered by June 2025.
“Our Government is committed to delivering those 6000 social homes, and to ensuring those homes are targeted to people in most need – and that includes in Rotorua. We are committed to growing social housing.”
He said the latest Rotorua Temporary Housing Dashboard for April showed 891 people on the Housing Register in Rotorua, waiting for public housing. Not all would be in motels used for emergency housing. The dashboard showed 255 households are still in all forms of emergency housing motels.
Potaka defined homelessness as people with no other safe and secure housing options who were living without shelter, in temporary accommodation, sharing accommodation with a household or in uninhabitable housing.
Rotorua MP Todd McClay said, in his view, the review’s findings would see Kāinga Ora stop “frivolous spending” and see it deliver efficient services for locals.
He said Kāinga Ora’s debt was set to reach a “whopping” $28.9 billion.
He said the Government was committed to ending the use of motels within two years and had instructed the Ministry of Housing and Urban Development not to send people to Rotorua for emergency housing.
“They [Kāinga Ora] have also been instructed to prioritise Rotorua people, including those currently in motels, so they can be placed in Rotorua houses when they are available.
“We do need houses, but they should be for local people first.”
Rotorua Mayor Tania Tapsell said the report’s recommendations were the changes “Rotorua had been crying out for”.
Tapsell said the recommendation to increase the local decision-making in the management and ownership of social housing was a big win and a confidence-booster for Rotorua.
“The lack of transparency and accountability in the past has been hugely frustrating.”
The mayor said the review acknowledged previous decision-making excluded the community and that a better approach moving forward should be locally led.
“This is something we’ve consistently advocated for and I remain strong in the call for only local people to be placed in social housing in Rotorua.”
Tapsell said she also welcomed ensuring Kāinga Ora delivered value for money.
“I’d like to see Government confirm support for local builders, suppliers and contractors to be used as much as possible.
She said she was working with Potaka and McClay on a new plan for Rotorua that would give the community certainty that using motels for emergency housing would end as soon as possible and that suitable public housing was available to locals.
Restore Rotorua chairman Trevor Newbrook said he agreed with the report that community housing providers should be used more.
“You hear so many stories of [Kāinga Ora] tenants making life hell for neighbours and nothing seems to happen.”
Newbrook said he believed the emergency housing situation would not change much, no matter what went on with Kāinga Ora’s local build programme.
“There is no guarantee someone in emergency housing in Rotorua will get a Rotorua Kāinga Ora house. We don’t even know if people living in emergency housing are on the housing register.”
Rotorua resident Tracey McLeod said the 500 more houses in the pipeline seemed excessive for the 255 households in emergency motels as at the end of April.
In response, McClay said there were 891 applicants on the register, meaning the number of local people who needed houses was greater than those in motels.
Rotorua developer Tony Bradley, who had just completed building 20 apartment-style homes for Kāinga Ora, said it was his opinion the report echoed that Kāinga Ora should not be doing the developments itself.
In his experience: “The timing, the price and everything takes longer when they’re building their own. It’s the old saying, ‘stick to your knitting’.”
He said the projects he did with Kāinga Ora worked well as they were finished quickly and on-sold after completion.
He said his second project under way on Fairy Springs Rd for Kāinga Ora would not be impacted by the review findings as Kāinga Ora was contractually obliged to finish the 15 apartments.
Kāinga Ora was approached for comment.
Kelly Makiha is a senior journalist who has reported for the Rotorua Daily Post for more than 25 years, covering mainly police, court, human interest and social issues.
Lifewise wants Rotorua triage facility for homeless with addictions, mental health issues.