New social housing funding in Budget 2024 will ensure the Government can continue supporting more families into warm, dry homes from July 2025, Housing Ministers Chris Bishop and Tama Potaka say.

“Earlier this week I was proud to announce that Budget 2024 allocates $140 million to fund 1,500 new social housing places which will be provided by Community Housing Providers,” Chris says.

“This new investment underlines the Government’s commitment to housing New Zealanders in need in a fiscally sustainable way.”

“The social housing waitlist is over 25,000 applicants and too many Kiwi families are living in emergency housing motels or sleeping on relatives’ couches while they wait to move into warm, dry, stable housing,” Tama says.

“The government has made the tough but fair decision to reprioritise money currently spent on first home grants and redirect it to community housing providers to help address the lack of social houses.”

Chris and Tama made the announcement while visiting Dwell Housing Trust’s social housing development in Kilbirnie, which is a good example of a community housing provider and a development that will be eligible for funding with the new places.

“Today I am outlining how the 1500 new homes will be allocated by the Ministry of Housing and Urban Development from 1 July 2025 onwards. Because of the lag time involved in construction, these new homes will be contracted over the next 12-18 months, Chris says.

“Currently, social housing is procured from CHPs on a project-by-project basis.

“Around 500 new homes of the 1500 will be allocated quickly using the existing pipeline of CHP opportunities and with three objectives in mind: value for money from government investment, contributing towards the government’s target of getting people out of emergency housing motels, and a balanced approach between achievability and building capability in historically underserved regions.”

“In short, this means the government will be prioritising social housing places where it will make the biggest difference and get whānau out of motels,” Tama says.

The Ministry of Housing and Urban Development will communicate revised criteria for the 500 places to Community Housing Providers by 30 June 2024.

“The balance of the 1500 social housing places (around 1000) will likely be allocated using an “active purchaser” approach which officials will be developing for Ministerial approval throughout the rest of 2024,” Chris says.

“Active purchasing” is a concept developed in the Independent Review of Kainga Ora and refers to the government developing a much more sophisticated understanding of current and future housing needs at a national, regional and cohort level, taking a Social Investment approach to improving housing outcomes, and potential outcome-based contracts.

“Subject to Ministerial agreement, HUD will be looking at developing longer term strategic partnerships with some CHPs to achieve specific social and housing outcomes, rather than looking at single proposals one by one.

“Moving to active purchasing will be considered as part of the broader response to the Kainga Ora independent review as well as the government’s wider review of housing funding programmes.”