- Kāinga Ora manages over 77,000 homes valued at $46.7 billion, housing 198,000 people, representing 3.8% of New Zealand’s population.
- From 2017 to 2023 KO debt had surged from $2.3 billion to $16.5 billion in 2023/24 and operating deficits went from a $76 million surplus to a
- $722 million deficit.
- The report calculates that KO’s operating costs per housing unit accounted for around 88% of its market-related rental income, compared to a private sector benchmark of 50%
- This indicates that state rental housing might be costing taxpayers around $2.2 billion annually or $29,000 per unit.
- The UK transferred 1.7 million council homes to housing associations and tenant ownership, resulting in improved maintenance and tenant outcomes.
The recommendations are:
1. Asset ownership should follow function, not ideology
2. More diverse ecosystem of providers creates resilience and innovation
3. Fiscal sustainability requires bolder action
4. Underutilised land for housing represents a lost opportunity
5. Housing assistance needs to target those in greatest need better than currently
6. Care for those receiving housing assistance should be coordinated with care other agencies are providing though non- housing welfare assistance
7. Shift in emphasis from ownership to vouchers should better harness competition, choice and capabilities.
8. Measures to reduce the multiple barriers to new housing developments
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders.
1 comment:
No sooner did an NZ Initiative note Kāinga Ora’s operating costs could be around $29,000 per home annually — on top of $16.5 billion in debt and a $722 million deficit — than the Otago University socialist academic cabal enter the fray wielding a political cudgel.
A new study from University of Otago researchers condemned the Government’s justification for axing Kāinga Ora’s public housing building programme. The peer-reviewed paper accuses a review led by former Prime Minister Bill English of basing its conclusions on private sector research containing “methodological issues,” “incorrect conclusions,” and “many flaws in how [it] was conducted.” Their central claim: public-housing tenants are more vulnerable than accommodation-supplement recipients — and one author, Professor Philippa Howden-Chapman, former Kāinga Ora board member, co-signed it. She had helped steer the organisation during its own financial crises and now defends the very system she once oversaw.
This follows her October Herald op-ed, in which she argued that only the State can be trusted to house disadvantaged families. She warned against vouchers or private-sector provision, citing 25,000 children hospitalised annually from “preventable housing-related conditions” — a number wielded as moral authority, not contextualised for behaviour, overcrowding, or tenant conduct.
The beggars belief the timing is coincidental. The academic chorus appears just as someone dares to question the State’s property monopoly.
It’s a predictable dance:
1. NZ Initiative: “State ownership is expensive and may not be the most effective way to help families.”
2. Otago academics: “You’re wrong — tenants are too needy to question the system.”
3. Media: “Politics vs. Academia!” — drama guaranteed, nuance optional.
And what about the streets, the homes, the families? Meth labs in state houses. Gang-controlled units. Homes vandalised, torched, or abandoned. Families intimidated out. Children exposed to violence and neglect. Chronic tenant disruption driving law-abiding tenants away. Kāinga Ora, in many cases, has been a sometimes helpless passive observer in its own estates.
This isn’t “stigma.” It’s reality. Vulnerability doesn’t excuse the system from accountability. Warehousing misery while protecting dysfunction is negligence, not compassion.
If public housing genuinely lifted families out of hardship, the debate would focus on outcomes, not ideology. Instead, decades in, the same households cycle through crises, and the academics declare the model sacrosanct.
The NZ Initiative asks: could a diverse ecosystem, targeted assistance, and vouchers deliver better outcomes more safely and at lower cost? The Otago response says: “No, don’t touch our $46.7 billion cathedral.”
Reality check: the State doesn’t have a monopoly on compassion. It does have a monopoly on expensive, slow, sometimes dangerous failure. Reform isn’t predetermined. Failure predetermines the need for it.
If the Otago faculty wants to run housing policy, they can form a party, contest elections, and see how “more concrete, more debt, more sacred tenants” polls outside the Wellington bubble. Until then: debate is welcome. Authority is earned at the ballot box, not in the faculty lounge.
Bottom line: Build houses, yes. But don’t sanctify dysfunction and call it virtue. Safety, efficiency, and accountability should be the litmus test — not peer-reviewed sermons about vulnerability.
—PB
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