- Kāinga Ora has cancelled 60% of its planned social housing projects for the 2025 financial year.
- The projects would have provided 1019 units, impacting the housing crisis response.
- Community Housing Providers may fill the gap, with $140 million allocated for 1500 new units.
More than half of the Kāinga Ora social housing developments to be delivered in 2025 will not proceed next year.
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Kāinga Ora has revealed that 60% (172 of 284) of the consented but uncontracted projects planned for before June 30, 2025, will no longer be going ahead next year after a full assessment showed they did not meet the Government’s tightened criteria.
The social housing projects put on ice would have provided an additional 1019 units and had been touted by the previous Labour Government as being part of the answer to the country’s housing crisis. Now only 546 of the total 1565 units (35%) consented but uncontracted homes due to be built in the first half of 2025 will happen.
These social houses were among 2168 houses put on hold in May after a damning review into Kāinga Ora that found the country’s biggest landlord was underperforming, not financially viable and the governance from the board lacking. New board chair Simon Moutter has been appointed to address this and has recently presented a turnaround plan to ministers.
Housing Minister Chris Bishop wants to assist community housing providers to build more affordable housing. Photo / Mark Mitchell
Housing Minister Chris Bishop announced earlier this year that Kāinga Ora would not be given any more operating funds to grow its social housing portfolio which has been allocated $140 million towards funding an extra 1500 new social housing places to be delivered from June next year by Community Housing Providers (CHPs) so they could provide more affordable homes. And last month he revealed plans to make it cheaper and easier for CHPs to secure the finance required to do more themselves.
Bishop, in a statement to OneRoof, said Kāinga Ora made up around 3% of New Zealand’s houses and was working to deliver about 2600 social homes in the next two years. Many of these were already under contract or under development before the review.
But what specific projects Kāinga Ora went ahead with was an operational matter for the agency, he said. “At any point in time, there will be a range of projects being re-phased or paused or not proceeding because of a range of factors.”
Of the 172 housing projects that have been put on ice, the largest was a 42-housing development on Hargest and Alamein Terraces in Ōwairaka, Auckland, that was due to be delivered by September 2025. A 24-unit development in Raurenga Ave in Auckland and two 20 housing units on Rongomai Road in Auckland and Rimutaka Street in Upper Hutt also failed to make the cut.
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Now the biggest projects to be built next year are a 19-unit development on Mathew Place in Rotorua, and two 17-unit projects on Balneavis Place, in Ōpōtiki and Healy Road, in Manurewa.
Kāinga Ora general manager of strategy, finance and policy, Gareth Stiven, said the projects did not meet its assessment criteria, which included being financially viable or in a priority location.
Some of the housing projects that may have been identified as not making the cut next year could be reinstated in future years, while others might have to have the plans reworked or the sites be sold, he said.
A further 326 social housing projects – which included 20 large-scale developments of 30-plus houses in Auckland, Wellington, Palmerston North, Hamilton and Napier – were still under review as of the end of October because they were not scheduled to be built in the 2025 financial year. Decisions on whether they would go ahead were expected to be made by mid-next year.
The future of Kāinga Ora’s biggest projects such as the 301-house development in the former Arlington Apartments site in Mt Cook, Wellington, which promised to solve the capital city’s housing crisis by providing new homes for about 900 people at a cost of $296m, remained uncertain.
Meanwhile, neighbours of some of the more controversial developments including the 60-house development site on Endeavour Ave, in Hamilton, which had received backlash from the community, will also be waiting to hear whether they will be going ahead.
NZ Certified Builders Association chief executive Malcolm Fleming says even a few new build housing contracts would be a boost for members. Photo / Supplied
NZ Certified Builders Association chief executive Malcolm Fleming said the building industry had been severely impacted in 2024 by Kāinga Ora putting so many housing projects on hold.
“It has a significant ripple effect through the industry. Not just builders like I represent, but for designers and architects as well.”
Some builders in the new build sector had been forced to look for work elsewhere and fill their work programme with other projects, he said.
“The builders who have been doing better are those who have been able to defer to different types of work outside new builds like alterations and additions, like doing commercial work, like doing remediation work after cyclones and flood.”
Fleming said while it was good news they had completed the review and some projects would be going ahead and now be looking to contracted, the fact that it was dramatically reduced from what it was meant to be was a “disappointment to the industry”.
However, he said even having an extra one or two new builds to do over a year would make a big difference for his 2300-plus members who were mainly smaller residential builders.
Victoria University of Wellington professor of public policy Jonathan Boston said the delays around making decisions on these projects had a significant impact on both the building industry and on providing houses for some of the most disadvantaged people in the country.
“If they are only planning to build a third of what was originally anticipated then of course that will mean in the absence of very significant increased construction of affordable units by community housing providers there will be a net reduction in the number of new builds and that will again impact negatively on some of the most disadvantaged people in the country.”
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