Sam Stubbs in front of a stylised map of Auckland (image: Archi Banal)
Sam Stubbs in front of a stylised map of Auckland (image: Archi Banal)

SocietyMarch 25, 2023

Inside the radical plan to build ‘the new state house’ and change renting forever

Sam Stubbs in front of a stylised map of Auckland (image: Archi Banal)
Sam Stubbs in front of a stylised map of Auckland (image: Archi Banal)

Not content with transforming KiwiSaver, Simplicity is now planning to out-build Kāinga Ora. Duncan Greive meets a pair of of unlikely revolutionaries trying to fix housing – a task which seems impossible, even for the state itself.

In September of 2020, a builder named Shane Brealey sat down and typed out a manifesto. It set out “initial thoughts on how we might combine to disrupt the New Zealand housing sector.” He set out an immodest target. “We have the potential to become the second largest home provider after the Crown,” he wrote. Brealey believed he had discovered what he described as the “holy grail” of housing: the ability to build “fast, cheap and high quality”, the three crucial attributes of which only two are usually believed to be possible. 

His proposed company would be a “nimble elephant”, with an appropriately over-sized goal: solving our housing crisis. “The need is now – we owe it to New Zealanders to apply our skills with a sense of urgency,” he wrote.

He’d been mulling the idea for a few years. The only thing missing had been huge amounts of patient money to make it happen. But when he met Sam Stubbs, the founder of investment powerhouse Simplicity, he believed he’d found the partner he needed to make it happen. “We have a rare combination,” wrote Brealey. “Capital + heart + building skills.”

It was announced in a flurry of publicity in late 2021. Eighteen months on and the pair have hundreds of homes either built or planned, and are on their way to proving it can really work. Their creation is Simplicity Living, a housing developer which is already among the nation’s biggest, and has ambitions to grow larger still. But it contains numerous highly challenging facets that collectively make it closer in intent to a state-owned organisation like Kāinga Ora, previously known as Housing New Zealand, than a private sector giant like Fletcher Living. 

Where almost all other large-scale home-builders develop to sell to the private market, Simplicity Living is building to own forever, and to rent out at below-market rates. The scale the pair has planned is vast: the manifesto talks of 10,000 to 15,000 homes over the next decade or so, but Stubbs believes the real ceiling might be far higher. 

“The really big, hairy dream is to have one in 10 New Zealanders living in these things,” he says. That means a minimum of 200,000 houses – around three times the current number of state houses. That’s not an inapt comparison for Stubbs. “We think of it as the new state house,” he says. What that means is, if successful, Simplicity won’t just augment the government’s role in housing – it will far surpass it.

A future Simplicity Living development (Image: Supplied)

This will be incredibly difficult. The KiwiBuild programme has built a mere 1,300 homes, with just 1,200 more under construction as of May 2022 – a far cry from the 100,000 initially announced. The fate of KiwiBuild, a brand the government was elected on but now has basically buried, is instructive as to the risks involved here, which are huge. Find any city in New Zealand and it will be dotted with holes in the ground and half-finished projects, graveyards for the plans of ambitious people who missed a hidden risk or got caught on the wrong side of a recession.

Simplicity can control that to an extent by leveraging their member investments – but it remains a very big swing. Because it’s not just about building and funding. They also need to convince New Zealanders that renting for life is something to aim for. Currently the narrative of New Zealand aspiration nearly always involves buying a home. Simplicity wants you to instead think about investing your money with them, and living in a home they own. It’s an extra cultural challenge underneath the bricks and mortar, serving to underscore and augment one of the most daunting tasks any New Zealand business has attempted in recent memory.

It might not have happened at all

If successful, Brealey and Stubbs will be the most important duo for housing in New Zealand since James Fletcher sat down with Michael Joseph Savage to plan the first of our state houses in the 1930s. Yet it could just as easily not have happened at all.

“We’d missed catching each other twice, and he was 10 minutes late to the third meeting,” says Brealey. The builder was up a scaffold in Northcote on Auckland’s North Shore, waiting impatiently for Stubbs. He wanted to show him the way he built, to explain why he was so confident in building so many homes, so well, so fast and at such a sharp price.

Stubbs, 58 but somehow still boyish, with long hair and an easy smile, admits to not having particularly high hopes. “I went in pretty cynical,” he says. “I’d had a lot of meetings.” So had Brealey. He’d been trying to find someone to scale up his home building programme for years, and had met with everyone with serious money from the Super Fund on down – even offering his process free-of-charge to Kāinga Ora – without finding anyone to buy in. Stubbs had the opposite problem – he had money he wanted in the housing market, but couldn’t find anyone with the right vision. 

A mutual friend, the investor and founder of The Warehouse Steven Tindall, had urged them to get together, saying to Stubbs: “wouldn’t it be a great thing if some of your clients could also get into accommodation at a really affordable price?” But Stubbs had gone to the wrong Lake Rd, and Brealey’s patience was almost gone. He agreed to wait, and the pair finally met up on that North Shore scaffold. “After a couple of minutes the frost had thawed,” says Brealey. “The chemistry was obvious. We were just made for each other.” 

Shane Brealey (left) and Sam Stubbs on site in Oranga. (Image: Duncan Greive/Archi Banal)

They have a lot in common. Both are self-made Pākehā men, born just two years apart, but from there the over-familiar archetype of business success fades fast, replaced by some quite atypical attributes. Devoting years and boundless energy to a not-for-profit is somewhat irregular for the wealthy, as is a willingness to publicly and pointedly critique their peers. One of the most striking attributes common to each is an ability to take the complex worlds of finance and construction and make them accessible, and their desire to conquer them somehow plausible. While sometimes they can come off as reductive or even arrogant, it hits different when the cause they’re championing has no impact on their financial futures. 

Stubbs describes their relationship as “an unquestioned bromance”, and it’s this chemistry that has allowed them to attempt Simplicity Living, a venture even more radical than the original not-for-profit KiwiSaver scheme. It was born from NZ Living, a business that is only six years old, but should properly be understood as the product of Shane and Anna Brealey’s decades in the building industry. They’re husband and wife, while also being business partners – he the builder, she the financial controller. Together, over decades, they figured out why building is so hard, where all the hidden costs lie. The “filo pastry of inefficiencies”, as Stubbs puts it, which means an affordable, fit-for-purpose home has become something mythic for many New Zealanders. 

The Brealeys built up NZ Living into a major developer, constructing 700 homes in a few short years. The business would be highly valuable – except that they have essentially gifted it to Stubbs and Simplicity, meaning the not-for-profit KiwiSaver is on its way to becoming a very unconventional conglomerate. 

“The greatest act of business philanthropy in New Zealand history,” is how Stubbs describes it. This gift is not merely a going concern, a pipe of development, the IP and the relationships. The Brealeys have also donated 10 years of full-time work – what would otherwise be their retirement – free of charge. It’s an enormous gift with the clear potential to force a major rethink of a number of closely linked spheres – most notably property development and the perception and reality of renting in New Zealand. 

It will be powered by Simplicity’s almost $5bn in member funds, and built using Brealey’s decades of construction experience. By combining those two with what Brealey calls their “warm hearts”, and Simplicity’s ultra-low-fee, not-for-profit approach, they say they can charge below-market rents for lifelong tenancies in warm, dry, well-situated homes and still make a good return for Simplicity’s investors. 

If successful, Simplicity Living will ask provocative questions of those who manage Kāinga Ora and the government’s housing portfolio. Chief among them being that if two determined individuals can build like this, why can’t the state itself? 

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All New Zealand’s problems are housing problems

Building well and efficiently really matters, largely because of the outsize role housing plays in many of our current agonies. Overcrowding and damp homes help feed the health crisis. Insecure tenancies move kids from school to school and contribute to falling educational attendance and outcomes. Poor-quality housing in the wrong place increases energy use and places an excessive reliance on private transport, feeding climate change. And paying too much for too little housing means it absorbs an excessive amount of our incomes, exacerbating the cost of living crisis and constraining our economy at the same time.

A nation which forgot how to build for a crucial decade of high population growth between 2004-2014. (Data: Stats NZ, United Nations. Graph: Duncan Greive)

It wasn’t always this way. For many years we were brilliant builders, with a muscular state highly involved, and an ordinary wage could comfortably cover the cost of rent or a mortgage. But a wide variety of factors saw New Zealand fall behind what was needed to house a growing population, with a particularly catastrophic downcycle from 2005-2015, and we have never really caught up.

While a majority of New Zealanders still live in an owner-occupied home, that number has been declining for decades. Most of the rest are renters and many in a very bad position – with insecure tenancies, poor-quality homes and around 70% receiving government support to pay rent through the accommodation supplement. This amounts to billions of dollars a year passing through tenants’ wallets and mostly into the bank accounts of private landlords. 

It means everyone pays too much for housing – but there’s a stark difference in how that manifests. Some benefit, while others lead broken lives. It plays out devastatingly at the most dire end of the spectrum of housing need. You see it in the heartbreaking scenes coming out of motels converted into emergency housing in Rotorua. You see it in the numbers of rough sleepers in our CBDs. You see it in families living in cars or garages. It’s a problem built up over decades which shows itself in a national stain. Successive governments have expressed dismay about this, while proving unable to impact it in any meaningful way.

Cynics suggest that this is because while expensive, unsuitable housing is horrible for many people, it’s also pretty good for some. Homeowners see the value of what is almost always their biggest asset go up in value, which makes them feel rich – and that feeling can help swing an election. Some critics, particularly The Kākā’s Bernard Hickey, point to this as the source of the continued lag between what we build and what we need. 

At an individual household level this is often experienced as deprivation and misery, but at a macro level it’s just big numbers. The Ministry of Housing and Urban Development (MHUD) maintains a dashboard cataloguing our progress at addressing this yawning need, starting in June 2017, just before Labour was elected. There are some tough stats – the housing register of those wanting a state house currently sits at 23,590. That’s an increase of over 18,000 in under six years, though its growth has been attributed to a culture shift at MSD. The total number of those helped into progressive home ownership is a tiny 268.

What Kāinga Ora started, Simplicity Living is finishing in Oranga (Image: Duncan Greive/Archi Banal)

There are bright spots, though. The growth in the number of public homes across Kāinga Ora and community housing providers sits at 11,606, and both the number of people living in motels for emergency housing and those receiving the accommodation supplement have declined in recent months. But the overall picture is of big announcements crashing against a very stubborn problem.

This catastrophic scenario has hardly gone unnoticed. A whole sector of community housing providers or CHPs (pronounced “chips” in the sector) has evolved to try and supplement the state. Surrounding it are many others trying in different ways, whether it’s Kiwi Property’s build-to-rent scheme at Sylvia Park, or the growth of iwi housing. Above it all is Kāinga Ora, the government agency dealing with the massive increase in demand for emergency and state housing. It does not actually build homes itself, and is being asked to do a number of very difficult jobs – including commissioning construction from Invercargill to Kerikeri, opening up huge tracts of land for development, and housing tenants with highly complex needs. 

What Brealey, Stubbs and Simplicity are doing, by contrast, has the benefit of complete clarity. They are laser-focused on creating as many high-quality houses as they can, at the best possible price, then renting them out for centuries. To achieve this required a major change in the thinking that was typical for homebuilding in New Zealand. For inspiration, Stubbs looked to Europe, where renting-for-life is common. Brealey looked to Japan.

The power of kaizen

Brealey, 60 with short-cropped grey hair and a deep tradie’s tan, is a firm believer in the Toyota Way, named for the car company from which it sprang. It’s a philosophy of business that seeks to emphasise lean management and the Japanese concept of kaizen, or continuous improvement – always looking to make a process more efficient. “I just always loved that philosophy,” he says. “And really I hate waste.”

This attitude was developed over 30 years in the construction industry, first in Australian-owned giants like LendLease, then later through NZ Strong, a company he and his wife Anna co-founded in 2004, responsible for the delivery of $370m in projects during the Brealeys’ time at the helm. If you live in Auckland, it’s near-inevitable you’ve been through an NZ Strong building, with schools, bus and train stations, venues and even the zoo part of a large portfolio of major infrastructure. Brealey loved the work, but was frustrated by default industry practices that ended up unnecessarily costing them – oftentimes you, as the tax or ratepayer – millions of dollars.

After 10 years, the Brealeys sold their shares in the business. Anna stayed on as financial controller to teach the new owners the ropes, while Shane built a home for the whānau on Waiheke Island. Throughout that period he started to ponder a “burning question”. 

He figured that life was already very comfortable. Instead of heading into retirement and watching their money pile up, he contemplated pouring a chunk of it into a development which would function as an experiment in the limits of development efficiency. It sought to discover “what the cost of construction could be if you controlled everything”.

The idea lodged in his mind and refused to leave. Over his career Brealey had gained a large degree of insight into the whole of the construction system, and developed a theory of where the waste was hiding. He believed that a lot of the time it came down to different parts of the process working in conflict – with each other, but particularly with the interests of the ultimate client, who really just wanted a reliable home they could afford to rent or buy. Brealey has a pretty withering view of the system that builds our houses, arguing that the standard practices of architects, quantity surveyors, engineers and developers often add unnecessary costs.

After he completed his own house in 2016, and with Anna having finished up at NZ Strong, the pair decided to test his theory. That pile of money they’d made allowed them to do what very few builders could ever contemplate: finance a whole development end-to-end. The pair registered a business under the name NZ Living in late 2016, and searched for land to build a development to test their thesis. They eventually purchased a site in Ōtāhuhu in early 2017, and started work on Mason Square.

A typical Simplicity Living development (Image: Supplied)

He wanted to build three-storey walk-ups – the kind of higher-density apartment-style homes which are proliferating across Auckland at the moment. A model that has the advantage of being default allowable under planning laws and thus relatively easy to get consented. His hunch was that unlocking savings would come from kaizens around vertical integration – controlling the whole process – and not starting from scratch with each development. 

He didn’t stop there. “Almost every medium-density apartment building that’s ever built, there’s a prototype. And their reasoning is, you know, ‘the site’s different. We want it to be sympathetic to its environment, we want to speak to the street’.” Brealey was sceptical about just how much that was valued by the ultimate buyers, who he thought really just wanted a good, affordable home. By using the same designs, materials and contractors, all operating at scale and with complete visibility over the work pipeline, Brealey believed that NZ Living might be able to find efficiencies that could save as much as 7% or 8% over the total costs of a project – no small achievement in a notoriously competitive industry.

Mason Square blew that out of the water. When all costs were accounted for, and all 86 apartments sold or tenanted, Brealey says they saved 32% over the course of the project, building for a little over $2,000 per square metre. To his mind, it revealed the level of inefficiency lurking across the New Zealand property development sector, while also showing just how many more houses could be built with the same budget, if their practices were applied and scaled. 

It did not go unnoticed. “People in the industry are in awe of what he’s been able to do,” says James Palmer, the founder of Community Finance, which exists to gain funding for the CHPs. “He has a richly deserved formidable reputation for being at the top of his game.” Tindall sees a kinship between Simplicity Living and his original goals with The Warehouse, and describes Brealey as building “what I consider to be the best-value homes in New Zealand”, based on quality and price.

Still, for Brealey, his first development was still merely a proof of concept. It was mid-2019 when he set out on the next stage of his journey. Armed with what he knew from Mason Square, he now needed to convince someone with far more money than any individual to take what he had learned and see just how much potential it contained.

A problem of two halves

At the same time, Stubbs was struggling with a very different problem. He had launched Simplicity in August of 2016, as an ultra-low-fee KiwiSaver aiming to take on the big banks. “If we get this right, we will literally be putting millions back into the hands of Kiwis,” he said upon its launch. He believed in Michael Cullen’s original vision for KiwiSaver, but thought that it had been perverted by some of those who had entered the industry. Their focus was on maximising their own profits, he thought, not those of their customers. 

By any standard, he has been wildly successful. From a standing start, Simplicity’s not-for-profit membership model has attracted 135,000 investors and a total of $4.7bn in funds under management. Stubbs has become a familiar figure in the media, tilting at the giants of the sector. Customer growth has been strong and resilient, and has allowed it to continually lower fees, which in turn makes Simplicity more attractive again.

Still, Stubbs looked into the future and saw trouble on the horizon. “We’ve got almost $5 billion [under management] now after six years,” he says. “There’s every reason to think that will be $40 to $50 to $60 billion in the future. It’s so hard to invest in New Zealand – you can only buy so many Meridian shares.”

He thought balancing share and bond portfolios with some exposure to property made sense – “rent and mortgages are the bills everyone pays, no matter what”. He also felt the same stirrings of moral indignation around the cost of housing that had inspired the founding of Simplicity in the first place. Surely there was a way of deploying its cash to get both a fair return on investment and do good for Aotearoa? He began to look for a way into housing.

Under construction in Oranga (Image: Duncan Greive/Archi Banal)

His first foray was in home mortgages, which launched late in 2019. In typical troublemaking Stubbsian style, he undercut the market by a whole percentage point, saying “we don’t think our members need to pay that much for their first home, nor do they need to be fuelling the extraordinary profits the banking sector makes”. While Stubbs considers the scheme successful, with over $140m loaned out, that equates to just 246 mortgages. He thought that Simplicity’s philosophy had a still broader application. He just didn’t know what it was.

Across town, Brealey was dealing with a similar frustration from the opposite end of the pipe. Determined to prove that the Mason Square method could provide an acceptable return on capital while also delivering benefits to society, he had sold it partly through a ballot as KiwiBuild homes, below market value. Yet when he returned to see how his development was travelling, he noticed a number of late-model cars in the parking spaces. 

To him, the array of Audis, Mercedes and Teslas were “a visual representation of middle-class welfare”. With KiwiBuild owners able to on-sell their properties after just three years, he believed his hard-won efficiency gains would soon be in the pockets of a small number of ballot-winners. To Brealey, Mason Square was a failure if it made no difference to the needs of society at large. 

Within a year, Tindall had got Brealey and Stubbs together on that scaffold, and NZ Living was on its path to becoming that enormous gift. The pair set their big target of 10,000 homes over 10 years, which, if achieved, would likely make Simplicity the largest private sector home builder in the country. But by building-to-rent, it was also on its way to becoming easily our largest landlord, after the state, while also solving a problem for its members. “We’re turning housing into a long-term massive bond – and an inflation-adjusted bond,” says Stubbs. It also marked a new European-style vision for renting in New Zealand.

Too big to fail?

For all the pair’s bravado, their success is far from assured. Asked about risks, Stubbs reels off a long list. There’s demographic risk – that population loss sees a reduction in demand for housing. Technology risk, whereby some unknown advance, perhaps an advance in prefabrication, erodes the Brealey advantage. Financial risks – say, large investors withdraw funds en masse at an inopportune time. Execution risk, with them failing to do a good job. But the “primary risk”, according to Stubbs, is something happening to Shane and Anna Brealey – he views them as that integral to the project.

He didn’t mention it, but there is political risk too. While at first blush the idea of a flood of high-quality rentals seems like something no one could resist, Simplicity is confronting to the core ideologies of the left and the right. The left could view their contempt for Kāinga Ora and emphasis on efficiency as a paramount virtue as a critique of big government. The right could perceive the not-for-profit angle as anti-capitalistic. Simplicity is basically what would happen if The Opportunities Party were a business, and TOP mostly polls at the margin of error. To succeed at the scale they are dreaming of, they will be greatly helped by governmental goodwill, but their whole posture – let alone the lobbying of rivals – makes that far from a given.

Locations of current and targeted Simplicity Living developments (Image: Supplied)

Above that sits what might be called a hubris risk. Both Brealey and Stubbs are incredibly confident. To some they would absolutely cross the line into cocky. Their style deliberately rubs some people up the wrong way, including people of immense means who resent the idea of taking huge markets like finance and property and attempting to, at least in part, remove them from the profit motive system. Stubbs says that’s not what he’s doing – that he is instead just introducing a measure of competitive tension. But I’ve spoken to CEOs who would not be at all mad if the Simplicity project were to stumble and fall. There are also some in finance who might even look for an opportunity to give it a nudge and see if this idea is as bulletproof as Stubbs claims.

It’s not hard to imagine it toppling. The history of property development is strewn with huge plans which don’t make it off the page. Stubbs knows this well, having witnessed what an ill-timed recession can do. He was briefly CEO of Hanover Finance in 2009, a year before it spectacularly collapsed. Its co-founder Eric Watson has become a pariah engaged in an epic losing battle with the IRD, a symbol of the excess of the ’00s. Simplicity’s market position could not be further from that of Hanover – but by moving heavily into property development, some of the risks remain the same. Only this time, rather than investors, there would be thousands of working KiwiSaver account holders on the wrong side of the bet.

The reality on the ground

The biggest test will be whether people actually want to live in their apartments, so one afternoon I drove out to meet Brealey and Stubbs in Oranga, a small suburb between Onehunga and Ellerslie where an NZ Living development is nearing completion. It represents the first test case for the partnership and was sold almost in its entirety to become the first Simplicity rentals. 

It’s a juxtaposition of the old and new: handsome brick apartments rising to three storeys alongside weatherboard villas, a liquor store and a laundromat. The area has been zoned for intensification by Kāinga Ora, and its advertising wraps the site, proclaiming that the state housing agency has created “1200 new homes for Oranga”. When asked about that line, Brealey smiles. “They seek glory from others’ achievements,” he says. “We bought the site from them. An arm’s length transaction. They were a pain in the butt to deal with, but they have favourable payment terms.”

Shane Brealey in a Simplicity Living kitchen (Photo: supplied)

We put on hard hats and hi-vis and tour the almost-finished apartments. It’s still a construction site, but you can already see why the pair are so excited about the potential. The living areas are spacious, with two-bedroom flats around 78 square metres, compared to some pricier developments closer to 60 square metres. There are thick concrete slabs between apartments, meaning your neighbour “could be playing a piano” and you’d struggle to hear it, according to Stubbs.

Unlike many terrace houses, which are often spread across three floors, each flat is on a single level. This is why Stubbs says they’ll hit around 85% universal access – “in terms of achieving the social outcomes, you can do that too”. By way of comparison, Kāinga Ora says 9% of its new built homes met full universal design standards in 21-22, rising to 13% in the 2022/23 year.

They forego amenities common to many built-to-sell complexes. “There’s a difference in mentality if you’re building it to flip it and sell it. High density, you stick in a gym or pool – a lot of bling. If you’re running it for 100 years, the tenants have got to love being here,” says Stubbs, citing the number of trees they’re planting as the kind of amenity which will achieve that.

They say all these decisions made upfront should more than pay them back over the life of the buildings. These are rated for 120 years, but Stubbs thinks they should still be going strong 200 years on. The pair ultimately believe that the quality of the homes and the communities that develop around them, along with a discount to market rent, will create environments in which tenants stay their whole lives. 

Later, as we drive around this pocket of Oranga, Brealey points out what he sees as the difference between their approach and others developing with Kāinga Ora. Most are what he calls “stick-builds” – made of timber, which is cheaper than the brick he uses, but only in the short term. Over time, they will need regular repainting, which both costs money and is easily deferred, leading to the kind of rundown appearance common to much of our 70s state housing stock. They’re less sound-proofed, increasing potential for conflict between tenants. Some of the external cladding carries with it potential for the same kind of weather-tightness issues to emerge as plagued leaky buildings in the 00s. To Brealey, creating state housing that will need persistent maintenance is asking for trouble, given that the state has historically been a neglectful landlord. 

Then there are more philosophical decisions. “Check out the front door,” says Brealey, pointing to a development with an imposing barred gate across its entrance. “Is this an apartment building or juvie detention?” He believes imposing exteriors are unlikely to create vibrant communities, and instead nudge more people into the kind of poor outcomes across health, education and crime that are front and centre of our current political debate. “We fund a lot of ambulances at the bottom of the cliff,” Stubbs says. “But a warm, dry home is a fence at the top of the cliff.”

Making the numbers work 

After touring Oranga, the three of us head across to the Shore, to the Northcote site where they first met almost exactly three years ago. On some level, the apartments are utterly unremarkable. Three storeys high, with little variation between those in Oranga and the development in Northcote – which is why Brealey says they can masterplan a site in three days, a process which is typically weeks or months. Stubbs is at pains to point out that “there is nothing new here” – that the idea of scale and efficiency and building solid, reliable, largely identical homes for lifelong tenancies is the norm in many European countries.

Everything is tidy and life seems peaceful – save for intermittent noise from another development across the road. It’s funded by Kāinga Ora, but Brealey says the bill per square metre is around triple that of his development (Kāinga Ora deny this). 

Brealey has worked closely with Kāinga Ora, and found the experience highly frustrating. Tindall believes it’s the state’s pace of working that is the fundamental driver of high costs. “I know of a builder who pays his key staff over a million dollars each. And he’s making heaps of money doing it, just because Kāinga Ora are so desperate to build.” Community Finance’s Palmer is more sympathetic. “There is still huge inefficiency in the system,” he says, but “it is going through a transformation”.

A rendering of the Oranga development when it’s completed (Image: Supplied)

When I speak to the chief executive of Kāinga Ora, Andrew McKenzie, he strongly resists much of Brealey’s critique. He says the organisation has undergone a huge shift in recent years, moving from what he describes as a “bespoke, erratic approach” to one which is “efficient and systems-driven”. Of its evolution, he says “even Shane’s vision doesn’t drive as many efficiencies”. Some numbers back him up, including a sixfold increase in land under development, and 5,000 homes under contract or construction. McKenzie acknowledges its costs are sometimes higher, but says it is due to Kāinga Ora building larger homes than the private sector, and including amenities like common rooms in many developments. 

This isn’t just a conflict between developers – the stakes are incredibly high. “If you could build it at half the going price, you’re going to build twice as many homes,” says Tindall. Ultimately, though, the best case for New Zealand is for both Kāinga Ora and Simplicity Living to succeed.

What Brealey and Stubbs are aiming at remains imposing, irrespective of the progress they’ve already made. Ten thousand houses in 10 years is a phenomenal number. Yet if they are successful, they could make a meaningful dent in New Zealand’s gnarliest problem – and lay down a gauntlet to the whole sector at the same time. Some will find distasteful the idea of a former Goldman Sachs banker and a multimillionaire developer casting themselves as able to beat out the private and public sector while also doing good. But with their aims on record, marking their work will be a cinch.

This is why a few hundred apartments spread across Auckland contain such provocation and promise. They say they want to make renting not a curse to be endured but a proud way of life. To prioritise the long term and the community over maximising an immediate return. To make housing a mission and not simply a market.

To achieve this they will create a complex and confronting institution – a huge private not-for-profit which aims to succeed where the Crown itself has mostly tried and failed. It is an entity which in many ways resembles aspects of the state, but with a markedly different approach. Stubbs does not shrink from the comparison. “If the government wants to get involved and has the money to do that, or the land to do it, that’s great,” he says. “But otherwise, we’re going to do it anyway.”

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Correction: this story has been updated to reflect Kāinga Ora supplying new statistics around accessibility

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