All clear for state house sales

Tauranga

The Social Housing Reform (Transactions Mandate) legislation is part of the Government’s controversial social housing reform programme.

The legislation allows Housing New Zealand to sell up to 8000 state houses over the coming years.

However, the properties can only be sold to registered Community Housing Providers (CHPs).

Social Housing Minister Paula Bennett said the Government is committed to transferring between 1000-2000 properties to CHPs this year.

Around 1124 state houses in Tauranga and 348 state houses in Invercargill have already been offered up for sale to CHPs.

Bennett said the legislation ensures the government can be clear and transparent in transferring Housing New Zealand properties to the community sector.

“Combined with the guaranteed income stream through the Income Related Rent Subsidy, transferring properties gives them [CHPs] capital and an asset that they can use to further grow.”

It would be difficult for the government to direct Housing New Zealand to sell specific properties, she said.

“Ministerial authority can only be used to transfer properties to meet the objectives of the Social Housing Reform Programme, which are clearly set out in the legislation.”

Bennett also said the legislation does not remove the first right of refusal rights that iwi have over some Housing New Zealand properties.

“We have been engaging with iwi in Invercargill and Tauranga since last year, to ensure that rights of first refusal are appropriately recognised.”

However, the legislation, which passed by 63 votes to 56, has some vocal opponents.

Labour’s housing spokesperson Phil Twyford said the new law was a charter for corruption.

“It will exempt ministers from normal legal requirements and leave the sale process wide open to dishonesty.”

In his view, ministers will be able to personally conduct negotiations and sell state houses on any terms they choose.

The Green Party and New Zealand First are also opposed to the legislation, while advocacy groups, like the Tāmaki Housing Group, believe it is all about privatisation.

Further, some major CHPs have announced they will not be participating in the sales and transfer process.

The Salvation Army and Habitat for Humanity have both said they don’t have the necessary resources to take on such a big job.

However, while sales can only be made to CHPs, there is scope for private investors to get involved in social housing.

It would be possible if a private investor was to become a registered CHP themselves or if they partnered with a registered CHP.

A number of existing CHPs have previously indicated they would consider partnering with commercial entities to achieve better social housing results.