Our advice to the Social Services and Community Committee

Housing and urban development: The challenges and our interest.

advice.pngPart of our role is to provide advice and assistance to select committees to help them in their work to improve the performance and accountability of public organisations.

Our annual audits, performance audits, and inquiry work give the Auditor-General a broad overview of public organisations, individually and how they work together.

In February 2021, we provided a briefing to Parliament's Social Services and Community Committee for its hearing on social housing and the 2019/20 annual reviews of the Ministry of Housing and Urban Development and Kāinga Ora.

Our paper, summarised below, suggested some questions the Committee might like to ask. Our full paper to the Committee is available on Parliament’s website.

5-1-questions.jpgQuestions that public sector agencies should think about

Many of the issues we advised the Social Services and Community Committee about are at the core of our interest in public sector performance and whether agencies are improving outcomes for New Zealanders. The questions below should be relevant not only for the agencies concerned, but anybody interested in resolving the housing challenges New Zealand faces. We have grouped them under the following headings:

  • the housing and urban development system;
  • public housing;
  • planning for large projects;
  • the link between housing and social services; and
  • urban development.

5-2-fits-together.jpgThe housing and urban development system – how things fit together

Although different housing issues can be looked at on their own – such as house ownership and how it is supported, the rental market, or social housing – it is important to also look at the system as a whole because these issues are interconnected. For example, if someone cannot afford to rent, they are likely to need government assistance.

The Ministry of Housing and Urban Development is responsible for strategy, policy, funding, monitoring, and regulation of New Zealand’s housing and urban development. It recently introduced major changes to policy and regulatory settings. To assess the effectiveness of these changes, it is important to be clear about what the objectives are. Agencies should be able to explain what initiatives they support, what problems they intend to address, what they want to achieve, and why the activity they fund is likely to produce the desired outcome.

What we expect agencies to know or be thinking about:

What are the objectives for the housing system, and how will proposed interventions help achieve them?

What is the desired mix of home ownership and renting, and of private versus public housing?

What kind of urban and housing developments are desirable, for example, should housing use land developed for different purposes (brownfield development) or use undeveloped land (greenfield development)? What does this mean for how government regulates land use?

What mix of demand and supply side measures is needed and likely to be effective?

What level of resourcing is likely to be needed?

5-3-public-housing.jpgPublic housing

In 2020, about 189,000 people lived in more than 66,000 properties managed by Kāinga Ora. The agency is planning to build several thousand more houses to help address the significant demand for public housing. In January 2021, the Government published the Public Housing Plan 2021-24, outlining its plans to increase the supply of public and transitional housing places.

The number of applicants waiting for public housing has increased at a greater rate over the last two years than the number of public housing tenancies.

The challenge is not only to build enough houses to meet need but also to ensure that these houses are the right size (for example, five-bedroom houses) and in the right place.

As well as the new housing, Kāinga Ora faces a significant challenge to ensure that its houses are in good condition. It previously stated that it intended to upgrade and renew 75% of its properties over the next 20 years. The work required to maintain Kāinga Ora’s rental properties day-to-day is also significant. In 2019/20, the agency spent $520 million on maintenance. Most of this maintenance work was on repairs rather than planned maintenance (421,000 repair jobs in 2019/20).

Kāinga Ora has until 1 July 2023 to implement the Government’s new healthy home standards. By 30 June 2020, 2736 (4%) of Kāinga Ora’s housing units met the standard, at a cost of $23.4 million. 

What we expect agencies to know or be thinking about:

What would be considered the ideal configuration of the public housing portfolio, and when could this be achieved, and at what cost?

What is the total anticipated cost of new builds and the renewal of the public housing stock? What are the plans for financing and borrowing?

5-4-planning.jpgPlanning for large projects

In 2020, Kāinga Ora stated that it plans to deliver 40,000 new homes over the next 20-25 years, and is involved in seven large-scale projects. These projects will rely on the building sector having the capacity to carry out the work, but will also require significant infrastructure investment.


What we expect agencies to know or be thinking about:

How are agencies working together to ensure that housing and infrastructure development is aligned?

What are the current plans for infrastructure financing, and what are the arrangements with local councils?

How are agencies working with the building and construction industry to promote innovation and good practice, and support a sustainable building and construction sector?


The link between housing and social services

There is a significant overlap between people in need of housing support, in need of financial support, and in need of other social services. Some government initiatives combine housing and social services.

The growing Housing Register waitlist is an indication of significant demand but it only includes people who the Ministry of Social Development has assessed as eligible for a place in public housing. The 2018 Census found that 42,000 people in New Zealand lived in unsuitable or overcrowded accommodation, and of these 3,500 lived without shelter. Many of these people will be among the most vulnerable New Zealanders.

The Government funds two types of immediate housing support:

  • transitional housing support, which combines housing and social services; and
  • Emergency Housing Special Needs Grants, which give people with urgent housing needs temporary support for up to three weeks. Often, these grants support a place in a motel.

We are interested in what agencies are doing to support homeless and vulnerable people to help them in the long term. In February 2020, the Government released the Aotearoa New Zealand Homelessness Action Plan 2020-2023. This plan is intended to prevent and reduce homelessness. It contained 18 immediate actions for 2020. In 2020, over $300 million of extra funding was announced for the Action Plan.

We are interested in how agencies are working together and the effectiveness of specific initiatives.

What we expect agencies to know or be thinking about:

What are the long-term outcomes for people receiving housing support, and in particular for those who received transitional housing support?

What is the progress of the Aotearoa New Zealand Homelessness Action Plan?


Urban development

One of the outcomes that the Ministry of Housing and Urban Development is seeking is to create “vibrant, flourishing communities”. This is more than just providing houses. “Place-making” is about creating communities that meet people’s needs – places that people want to live in.

We are interested in how agencies are thinking about broader urban development outcomes. 

There are long-term challenges for urban development planning, especially related to climate change. We want to know that agencies are actively thinking about future risks and resilience.

What we expect agencies to know or be thinking about:

How are agencies measuring progress towards broader urban development outcomes?

How are agencies anticipating climate change? How are they ensuring that housing and urban development is prepared for, and resilient to, future challenges?