Weekend Herald

Management swells at house-building agency

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because none were involved in “anywhere near the breadth and depth of this agency’s scope”.

‘Eye-watering’

Act deputy leader Brooke van Velden said the cost to taxpayers for “all these extra managers is eye-watering”, particular­ly when Kainga Ora is “competing in the market against private developers and first-home buyers, bidding up the price of land and homes while selling off its own”.

Van Velden accused the Government of “failing to fix the housing crisis” even as it “[spent] up a frenzy in the process”.

The rapid rise in the number of managers coincides with criticism that the large agency is contraveni­ng the Commerce Act by prioritisi­ng its own projects for favourable regulatory treatment over those of other developers.

Last month private sector land developer Winton filed a lawsuit in the High Court alleging the agency was using its powers unfairly to assess and award “specified developmen­t project” designatio­n (SDP), which many see as a fast-track consenting process.

Kainga Ora’s many hats mean that it is both the arbiter of which projects are recommende­d for SDP designatio­n and a landowner (or pursuing land purchase) in the only two projects approved for considerat­ion to date.

In addition, Kainga Ora outbid Winton and other developers last year to buy a $70.4m tract of raw land known as Ferncliffe Farms.

The deal was contentiou­s because Kainga Ora made a huge upfront payment which, unlike some competitor­s, did not spread payment over a period of years to take account of the risk of delay or difficulty in rezoning.

In addition, Kainga Ora’s bid was supported by two land valuations that, respective­ly, overstated the likely amount of developabl­e land and assumed that the rural parcel of land was already zoned for urban developmen­t.

In recent months Kainga Ora has missed a key build target contained in its Statement of Intent 2019-2023.

While it aimed to build 4480 public and supported houses by June 30,

2022, the agency, in fact, built only

3982 such houses, just 88 per cent of its target.

Minister Woods said the target was originally set in light of an earlier Public Housing Plan which has been superseded by an update in 2021, and that she was comfortabl­e that Kainga Ora’s capability and home building was tracking well.

She also noted that Covid-19 had hampered the agency’s delivery schedule.

The Government’s current housing plan, released in 2021, promises

18,000 new public housing places by June 30, 2024 (from the time Labour came to power).

HUD’s figures show that count sits at 10,600 for the period October 2017 to September 2022. New builds total 8745.

More contentiou­sly, the total also includes 600 leases of privatelyo­wned homes and a further 1464 “buy-ins”.

Homes are sometimes leased or purchased from the private market to add to public housing stock.

Sometimes the purchases are used to build larger land parcels for redevelopm­ent.

Van Velden said the practice does little to augment New Zealand’s overall housing supply, and only shuffles homes out of the broader market and shunts their occupants on to the bloated public housing waitlist, which is now a record length.

McKenzie did not confirm whether the agency expects to meet next year’s July 1 deadline to meet legislated healthy homes standards for rental properties (providing a minimum grade for the likes of heating, insulation and moisture).

As of July 1, 2022, just 52 per cent of Kainga Ora’s public housing met the standard which came into effect for private landlords last year. McKenzie said 68 per cent of “tenanted Kainga Ora homes” now meet the benchmark.

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