Auditor-General's overview

Leading New Zealand’s approach to housing and urban development.

E ngā mana, e ngā reo, e ngā karangarangatanga maha o te motu, tēnā koutou.

Access to healthy and affordable housing contributes to positive health, education, economic, and social outcomes. The Government's vision is that all New Zealanders can live in a home and a community that meets their needs and aspirations.

New Zealand has:

  • a decreasing number of people who own their own home;1
  • an increasing number of people waiting for public housing;2 and
  • inequalities in housing outcomes – poor housing outcomes (such as unaffordable or poor-quality housing) disproportionately affect Māori, Pasifika, unemployed people, one-parent families, and people with disabilities.3

The Treasury has stated that the wealth gap between people aged over 65 and those under 35 has more than doubled since 2000. Increasing house prices and different rates of home ownership between the two age groups have significantly contributed to this gap.4

New Zealand's housing and urban development system (the system) is complex. Many public and private groups and organisations are involved, for example in making land available, changing district plans, putting supporting infrastructure in place, seeking building and resource consent, giving building and resource consent, and finally building houses and communities. This also takes time. Effective and enduring leadership is needed to co-ordinate and align the different organisations' work so that it addresses the challenges with housing and urban development.

In 2018, a Cabinet paper from the then Minister of Housing and Urban Development described the system as lacking clear leadership, coherence, and effective long-term stewardship. In October of that year, the Government set up Te Tūāpapa Kura Kāinga – the Ministry of Housing and Urban Development (the Ministry) to lead the system.

The Ministry is responsible for:

  • leading the design, implementation, and review of the government's strategy for housing and urban development;
  • providing strategic advice about all aspects of the system; and
  • monitoring and reporting on progress.

The Ministry is also responsible for designing and delivering several housing and urban development initiatives, services, and regulatory functions. This adds to its work's overall complexity.

Providing system leadership to improve housing outcomes is not easy. The Ministry does not have many direct levers to influence the system's performance, and the groups and organisations that do have those levers have their own priorities and are not accountable to the Ministry. Even so, the Ministry faces pressure to deliver immediate improvements while it works with others to address the underlying causes for the challenges with housing and urban development.

My Office carried out a performance audit to understand how well-placed the Ministry is to carry out its system leadership role now and in the future. In my view, good system leadership includes:

  • understanding how well the system is performing and knowing what changes are needed to improve outcomes;
  • producing a strategy that has a vision and an action plan that all those in the system share and provides direction, prioritises initiatives, and aligns actions throughout the system;
  • governance arrangements that have collective accountability for decision-making and risk management, where appropriate, and are supported by good management to co-ordinate action and resolve operational issues;
  • regular reporting on the system's current and projected performance to identify any corrective actions and to support accountability and transparency; and
  • building and maintaining effective relationships with people and organisations to support the system's strategic direction.

What we found

The Ministry has made some significant achievements in its five years leading the system.

The Ministry worked with the groups and organisations involved in housing and urban development to prepare a shared vision and outcomes, clear strategy, and implementation plans for improving the performance of the system. This is through the Government Policy Statement on Housing and Urban Development and MAIHI Ka Ora – The National Māori Housing Strategy 2021-51, and associated implementation plans. The Ministry is also preparing a monitoring framework, maturing its strategic risk management, and improving its data and intelligence capability.

The Ministry set up system-level governance arrangements, including the Chief Executives' Housing Group – a group of chief executives of government agencies with the most influence over housing outcomes (such as the Ministry of Social Development, Kāinga Ora, Te Puni Kōkiri, and the Ministry for the Environment). The Ministry has also put in place governance arrangements to oversee the MAIHI Ka Ora strategy implementation and local partnerships. In my view, these governance arrangements will help to co-ordinate and build alignment throughout the system over time.

The Ministry also set up a dedicated business group to support governance arrangements, to identify priorities, and to ensure that initiatives affecting housing and urban development are aligned. The Ministry also has work under way to set up a strategic approach to managing key relationships and to improve its capability to lead system change.

These foundations were set up at the same time the Ministry was responsible for, or contributed to, a range of other housing and urban development initiatives. For example, the Ministry worked with others to prepare the Aotearoa/New Zealand Homelessness Action Plan (2020-2023), which is the first comprehensive cross-agency plan to prevent and reduce homelessness.

In response to the Covid-19 lockdowns, the Ministry worked with others to provide accommodation in motels to more than 1000 homeless individuals and families/whānau.

What needs to happen next

The Ministry has largely set up the frameworks and governance arrangements to support its system leadership role. It now needs to focus on leading the delivery of its strategies and improving the system's performance.

I have made three recommendations to support this. The recommendations involve improving the Ministry's current and projected performance information, maturing its governance arrangements, and continuing to focus on improving its organisational capability.

One of the Ministry's main challenges is to ensure that work by the groups and organisations involved in housing and urban development is aligned and that they work together to improve housing outcomes for New Zealanders.

The role of the Chief Executives' Housing Group is critical to this. The chief executives in this group need to consider how to best use their organisations' influence and resources collectively and individually to improve housing outcomes. They also need to consider how to maintain this focus because it will take years to achieve substantive change in this system.

This challenge is not unique to housing. The public sector wants to work more collectively to deliver improved outcomes. To do this, public organisations need to be purposeful and deliberate about how they balance organisational and wider priorities, share information, align activity, and combine resources.

I am interested in public organisations achieving joint outcomes effectively, and my Office will continue to carry out work to understand and highlight the factors that support it.

I thank the many people who contributed to this report and took the time to talk with my staff.

Nāku noa, nā

John Ryan
Controller and Auditor-General | Tumuaki o te Mana Arotake

23 August 2023

1: Statistics New Zealand (2020), Housing in Aotearoa: 2020, page 28, at stats.govt.nz.

2: Based on Housing Register data from the Ministry of Social Development, at msd.govt.nz.

3: Statistics New Zealand (2020), Housing in Aotearoa: 2020, page 131, at stats.govt.nz.

4: The Treasury (2022), Wellbeing in Aotearoa New Zealand 2022: Work towards Te Tai Waiora (the Wellbeing Report), page 10, at treasury.govt.nz.