Government Housing Reform

CORT-Arawa-St-1

As part of its response to the housing reform programme, the Government is looking to grow the community housing sector.

In July 2013 Dr Nick Smith, Minister for Housing, stated that he wanted to see the community housing sector grow from its current provision of 1% of the social housing stock to 20%.

Housing needs within Auckland are growing at such a rate that the Government believes it can no longer remain an effective lead provider of social housing. Its declared intention is to increasingly look to third parties such as CORT Community Housing as cost-effective, values-driven partners in the provision of housing for those in need.

Proposed Social Housing Reform Bill

In November 2013, the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Act was passed. A key aspect of the Act is the introduction of income-related rent subsidies (IRRS) for community housing providers. This would create a level playing field for organisations such as CORT Community Housing, enabling it to apply to have the rents it charges to its tenants topped up to match market rents, as currently happens with Housing New Zealand. It would also enables community housing organisations (CHO) to operate on a much more commercially viable level when making future investment and development decisions. This is good news for the sector in the long term. For CORT Community Housing, it would relieves much of the financial pressure it currently faces in its efforts to offer below-market rents by cross-subsidising its own properties with those that it rents from the private market.

Housing Minister Dr Nick Smith today welcomed Parliament’s passage of the Government’s Social Housing Reform Bill through its third reading without a party vote being called.

“The fundamental change in this bill is shifting from state housing to social housing. Governments for 75 years have believed that only the state can meet the housing needs of disadvantaged families. These reforms will encourage the growth of a more diverse range of new social housing providers,” Dr Smith says.

“High needs families want a warm, dry, safe home available at an affordable rent and don’t care who owns the bricks and mortar. These reforms enable approved social housing providers to receive the same rent subsidy as Housing New Zealand and tenants to receive the benefit of paying a discounted income related rent.

“International experience shows that community housing providers are better able to provide complementary services to tenants to support disabilities and families, that they do better at transitioning people to independence, they more consistently maintain the quality of their housing, and that they can stretch the taxpayer investment in social housing further. The Government’s ambition is to grow the community housing sector to provide 20 per cent of New Zealand’s social housing over the next five years.

However, CORT Community Housing’s key concern is that the IRR subsidy is available for only new building work and not for existing community housing tenancies. This would exclude the 185 units currently under CORT Community Housing management.

The new legislation also proposes the introduced registration and regulation of the community housing sector through the Community Housing Regulatory Authority. Community Housing Organisations seeking registration need to meet the requirements set out in a set of Performance Standards and guidelines.

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