Bennett sees first state house sales to community providers coming in 2016

Wednesday 3rd June 2015

Social Housing Minister Paula Bennett doesn't expect to complete any state house sales to community providers until next year, and says they won't be sold at book value, which she calls an "accountancy fallacy".

The government planned to sell between 1,000 and 2,000 state houses this year and as many as 8,000 over three years to registered community housing providers as part of plans to overhaul Housing New Zealand's stock of 65,000 homes it says aren't suited to the needs of tenants. Bennett told Parliament's social services select committee that the sales probably weren't going to happen this year, with potential iwi buyers playing hardball in their opening negotiations.

"As far as the expressions of interest and market research that we're doing, I would be very surprised if we sold them by the end of this year, though I think we'd be getting pretty close," she said. "What iwi leaders have said is, they've come into a negotiation and they've tried to start at zero, well I don't blame them, everyone would like a house for nothing, and they've started there, and I suppose that's what negotiations are all about."

The government chose Tauranga and Invercargill to embark on the sale of its state houses, where it sees stable demand for social housing and expects active providers to engage. Te Runanga o Te Rarawa chairman Haami Piripi launched an opening gambit on the weekend, claiming the market price for social housing was zero and that the government should transfer them at no cost.

Bennett said it wasn't the government's intention to give away houses, though she wouldn't rule out the inclusion of housing stock in a Treaty of Waitangi settlement as a possibility. She declined to speculate on what kind of discount to the book value they houses would be sold at saying the Crown was still in negotiations.

"I don't see us selling the houses at book value. The book value is in many respects an accountancy fallacy and not the reality of what we will get for them on the market," Bennett said. "It doesn't actually take into consideration the tenants and that any purchase of those homes would have the tenants and what it means to actually run social houses along side of them and that does bring down the cost of them."

The government's focus on overhauling Housing New Zealand's stock is part of a wider push to reduce the government's monopoly on social services, which Finance Minister Bill English told the Maxim Institute in Wellington yesterday was failing to meet the needs of society's most vulnerable.

English identified the way government agencies defend their funding, slowing down decisions on which entity should be a point of contact, and in the way they retain and restrict information relating to their portfolios as barriers to improving the delivery of services.

BusinessDesk.co.nz

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