It raises valid concerns about Kāinga Ora, but there’s little to suggest the new direction for state housing charted in Sir Bill English’s report will address Aotearoa’s chronic shortage of affordable rental housing, argues Alan Johnson.

Given previous National governments’ indifference or even hostility toward the idea of state housing, Sir Bill English’s recently released review of Kāinga Ora is not the hatchet job we might expect. Rather, the Independent Review of Kāinga Ora – Homes and Communities is a subtle, considered piece of work which, while still ideologically driven, raises valid criticisms of Kāinga Ora’s performance and what it became under the stewardship of the last Labour government. 

There are, however, at least three reasons to fear that the new direction being charted for state housing in the review will not address the chronic shortage of affordable rental housing that we have in Aotearoa. These fears are around the nebulous use of the idea of community as an organising basis, the clear reluctance to spend money and the absence of any housing targets.

While is it not entirely clear, English’s proposal seems to be to eventually dismember Kāinga Ora into a series of regionally based community housing associations that are expected to “manage the government’s local social housing and pursue agreed local housing strategies and priorities”.

The idea of community is pervasive in the review, but apparently Kāinga Ora doesn’t do community well. For example, the review claims that “community concerns about Kāinga Ora’s developments and tenancy issues are eroding their social licence”. 

A proposed response is “that government housing support should be assessed based on making evidence-based decisions at a local, community level” and that “where possible, decision-making should be devolved to local organisations that have a genuine community mandate for the task”.

Most local opposition to Kāinga Ora developments has arisen in middle-class neighbourhoods that resent that state tenants might soon be living close to them. This isn’t opposition to the type of development Kāinga Ora is proposing but the fact of it. Is it really plausible that local organisations with a genuine community mandate will emerge from such class-based hostility? 

A repeated slogan in the review is that Kāinga Ora is not financially sustainable – whatever this means. New Zealand Superannuation is not financial sustainable unless the government slips in an extra $1 billion each year to prop it up. The financial sustainability of a public service or asset is, within reason, a matter of political choice. The political choices offered in the review are clear even if they are not clearly stated.

English and his fellow reviewers are critical of Kāinga Ora’s projection that its debt will rise from $12 billion in 2023 to $23 billion in 2028. This is to be expected if Kāinga Ora is to build and acquire more houses and if government won’t invest more equity capital into the state-owned company for this. But the alternatives and their implications are not spelled out in the review. Ideally, they should have been as it would have allowed for the more accurate assessment of the implications of the review panel’s recommendations.

There are only two alternatives to not using government-backed debt to build more state and social houses – either we build far fewer or we rely on private capital to own and build the additional houses needed. In a Radio NZ interview, housing minister Chris Bishop made a commitment to build more social housing although he didn’t say how many and by when. On this question, all the review panel offered by way of a recommendation was the development of a nationwide social housing investment strategy within three years.

While the review acknowledges there are more than 25,500 households on the social housing waiting list, it doesn’t consider how the supply of state and social housing can be increased to address this level of unmet need. Instead, it indirectly reframes the question as one of moderating demand, where tenants in social housing are incentivised to “move to more cost-effective tenures”. Cost-effective in this sense is only from a government perspective and such tenures are private rental housing supported by the Accommodation Supplement (AS).

Tenants in state and other social housing are very unlikely to be sufficiently incentivised to leave secure and affordable social housing for more expensive and sometimes precarious private rental housing. Why would they? 

While there has been no mention of reviewable tenancies in either the review or by the minister, this is the only way of moving people out of state housing once they have established themselves in better-paying jobs. Reviewable tenancies may soon reappear on the political landscape. With this we may see greater attention being paid to the tenure of the 46% of state tenants whom the review panel suggests have a housing need “broadly comparable to individuals in the private sector”. 

The review accurately identifies Kāinga Ora’s weaknesses and failings and usefully offers the beginnings of a community-based alternative to providing social housing outside of a hegemonic state agency. It dodges completely the questions of funding and expansion of the social housing stock. Whatever progress has been made in addressing homelessness and housing poverty over the past six years will soon ebb away if the National-led government dithers around these questions.