The government has announced new social housing funding in Budget 2024, aimed at supporting more families into warm, dry homes from July 2025.

Housing Ministers Chris Bishop and Tama Potaka revealed that $140 million has been allocated to fund 1,500 new social housing places provided by Community Housing Providers (CHPs). "This new investment underlines the Government’s commitment to housing New Zealanders in need in a fiscally sustainable way," said Mr Bishop.

The social housing waitlist currently exceeds 25,000 applicants, with many families living in emergency housing motels or staying with relatives.

Mr Potaka emphasised the urgency of the situation, noting, "The government has made the tough but fair decision to reprioritise money currently spent on first home grants and redirect it to community housing providers to help address the lack of social houses."

The announcement was made during a visit to Dwell Housing Trust’s social housing development in Kilbirnie, which exemplifies the type of projects eligible for the new funding.

Associate Housing Minister Tama Potaka

Mr Bishop outlined the allocation process for the 1,500 new homes, which will be managed by the Ministry of Housing and Urban Development from 1 July 2025 onwards. "These new homes will be contracted over the next 12-18 months," he said.

Currently, social housing is procured from CHPs on a project-by-project basis.

The new funding will see around 500 homes quickly allocated using the existing pipeline of CHP opportunities.

Housing Minister Chris Bishop

Mr Bishop highlighted three key objectives for this allocation: achieving value for money from government investment, contributing towards reducing the number of people in emergency housing motels, and ensuring a balanced approach between achievability and building capability in underserved regions.

"In short, this means the government will be prioritising social housing places where it will make the biggest difference and get whānau out of motels," added Mr Potaka.

The Ministry of Housing and Urban Development will communicate revised criteria for the 500 places to Community Housing Providers by 30 June 2024.

The remaining 1,000 social housing places will be allocated using an "active purchaser" approach, which officials are developing for Ministerial approval throughout 2024.

This concept, developed in the Independent Review of Kainga Ora, involves the government gaining a deeper understanding of housing needs at various levels and adopting a Social Investment approach to improve housing outcomes.

Mr Bishop elaborated on the potential shift to active purchasing, saying, "HUD will be looking at developing longer-term strategic partnerships with some CHPs to achieve specific social and housing outcomes, rather than evaluating single proposals one by one."

This approach will be part of a broader response to the Kainga Ora review and the government's wider review of housing funding programmes.

The objective is to ensure that the new social housing places effectively address the current housing crisis and provide stable, secure homes for those in need.