NZ to begin selldown of state housing, expand subsidies: Key   28 Jan 2015

NZ to begin selldown of state housing, expand rent subsidies, Key says

By Paul McBeth

Jan. 28 (BusinessDesk) - The New Zealand government plans to increase the number of income-related rent subsidies by 4.8 percent over the next three years, boost the number of tenancy reviews by two-thirds and sell up to 2,000 houses as part of a revamp of state provision of housing for the poor.

In his first major speech of 2015, Prime Minister John Key fleshed out plans to support households, building on measures put in place last year to allow income-related rent subsidies for approved housing providers and the introduction of reviewable tenancies to help shift tenants into market rentals when they are able. Among those measures, Key said the government will increase the number of income-related rent subsidies to 65,000 by 2017/18 from its current level of about 62,000, which Key said will cost about $40 million.

"Our opponents will say that the government should own and run everything in social housing. But that system didn't work as well as it could for tenants, or for tax-payers," Key said. "If we're to succeed in solving some of New Zealand's longstanding social challenges, the government needs to be open to working with community groups, non-government agencies and the private sector."

Key has previously singled out income-related rents - which ensure social housing tenants pay no more than a quarter of their income towards rent - as a major tool in alleviating poverty, and that rolling it out to non-government housing providers provided far greater benefits than building more government-owned housing stock.

Other measures announced include a review of Housing New Zealand's role as the country's biggest social landlord, which owns 65,000 houses and leases another 3,000, which will be completed in the first six months of the year. Once that's completed, the government will look to sell between 1,000 and 2,000 houses and may sell more properties over the next three years.

"The overwhelming dominance of Housing New Zealand leaves little room for non-government organisations to play a significant role," Key said. "But we can change that if some existing Housing New Zealand properties, with tenants remaining in them."

The government has been looking at ways to reduce the number of state-owned houses in the wrong place or the wrong size, and has previously signalled a desire to bring in non-government community groups and iwi to expand the nation's available stock of social housing.

Key said the houses could be sold below book value, as the transaction wouldn't be on the open market, but that Housing NZ will continue to be the biggest provider of social housing, with at least 60,000 properties in 2017.

"Initially, we will free up capital from these sales, which we'll use for housing and other capital projects needed across government," Key said. "But we'll be spending more each year on income-related rent subsidies."

The other measure announced today was an increase in the number of tenancy reviews to almost 5,000 over the coming two years to try and shift households who are able to move into private accommodation to do so. About 3,300 tenants in Housing NZ properties are currently earning too much to receive the income-related rent subsidy.

"People will be encouraged and supported to move into other housing if they are in a position to take that step. That frees up a place for someone else with greater needs," Key said. "I can assure people that every review will take into account people's individual circumstances and the availability of alternative accommodation."

(BusinessDesk)

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