Emergency houses probed
‘‘Transparency is important and I welcome the Office of the Auditor General’s inquiry.’’
Carmel Sepuloni
Minister of Social Development
The auditor-general will investigate a scheme where private landlords were paid thousands of dollars a week so their properties could be used as emergency accommodation.
National Party MPs called for the auditor-general to investigate the scheme after an investigation last year revealed the housing quality was not being checked, some houses were being rented out without the permission of landlords, and uncovered other initiatives to extract more money out of the scheme.
Landlords were paid well above market rate for allegedly ‘‘uninhabitable’’ houses in Auckland – $3000 or more per week for a house in some cases – between November 2017 and June 2020.
National Party MP Nicola Willis questioned how the scheme had been allowed to go ahead.
‘‘We have to ask ourselves, how was the Ministry [of Social Development] able to have the wool pulled over its eyes to this extent?’’
Auditor-General John Ryan said more than $38 million was paid out to landlords through this scheme.
It led to property owners in areas with high housing need, like South Auckland, pulling their houses off the private rental market to rent them out for thousands more to the Government instead.
The Office of the AuditorGeneral will examine the way the Ministry of Social Development (MSD) picked landlords and property managers, and how it assessed quality and price, but it won’t explore the policy decision to use private rentals.
The scheme was originally envisioned as an extension of existing emergency housing at motels and hotels.
Hotel owners are paid a room rate of $100-150 per night; extending that to private landlords meant a four-bedroom house could net up to $3000 per week. But there were significant issues, including a lack of quality checks by MSD.
A whistleblower, Vanessa Parker, a former property manager for Harcourts O¯ ta¯ huhu (a firm alleged to have links to the incidents reported) complained to MSD about what was happening.
Willis said it was concerning the scheme only came to an end because a whistleblower complained.
Social Development Minister Carmel Sepuloni said she would not be commenting further until the auditor-general finished his inquiry. ‘‘Transparency is important and I welcome the Office of the Auditor General’s inquiry,’’ Sepuloni said.
The Government eventually cancelled the scheme after the country’s borders closed last year and extra motel space became available.
This created more problems as families had to relocate at little notice on June 30, with chaos in South Auckland when families had to move out en masse as the country shifted to level 1.
While the abrupt cancellation of the scheme does not appear to be within the scope of the auditorgeneral’s investigation, Willis said this part of the saga was also concerning. ‘‘I am concerned that MSD has lost touch with what we actually are trying to achieve with people when we help them with social housing.
‘‘Because it does not appear that they were treated with the dignity you would expect.’’