Hon Steve Maharey
Acting Minister of Housing

Third sector and local government housing encouraged

$63 million is to be spent encouraging greater involvement in housing by third sector groups and local government.

Acting Housing Minister Steve Maharey today announced an extra $43.262 in capital funding and $19.831 in operating funding will be spent over the next four years encouraging greater housing partnerships with local government and third sector organisations such as church groups and other non-government organisations, as well as iwi and Maori.

“We are keen to develop these sectors’ involvement in social housing. Demonstration projects will be used to test their ability in developing housing solutions for low income people.

“The aim is to safeguard and extend the stock of social housing that is available to those on low incomes and those with special needs. Local government and third sector groups, with their strong community links, are in an excellent position to provide local solutions to local problems if they have the resourcing.”

In the case of the third sector, Mr Maharey said it would take time to grow in to a sustainable and reasonable sized housing sector. This funding will assist with growth in both the third sector and local government.

“Activity levels are likely to be low initially and to increase incrementally over time.”

An evaluation of the initiatives would be done in 2004/05.

Details of both the third sector initiative and the local government initiative are still under development and will be released later this year for comment. Some background information is attached.

*** Background Information

Third Sector Initiative

This will involve a four-year programme, starting this year. It will include demonstration projects delivered in partnership with non-governmental organisations to buy, build or modify a mix of social rental accommodation and develop affordable home ownership opportunities. It will be funded through a Housing Innovation Fund to be set up by Housing New Zealand Corporation. The fund will comprise funding for demonstration projects, an establishment fund for capacity and infrastructure building, and help for qualifying agencies develop housing proposals. It will also include funding to develop a third sector representative group.

The framework for how projects will be chosen is yet to be finalised, but it is proposed that partner groups would need to contribute at least 15 percent of the required resources (such as land, capital and labour). Housing New Zealand Corporation contributions would vary and could include loans, equity contributions and grants.

Potential projects could include housing for low income groups with specific or specialist housing needs such as people with disabilities or kaumatua housing.

Local Government Housing Initiative

Local Government is the second largest provider of social housing in New Zealand, after Housing New Zealand Corporation.

The main objective of this four-year initiative, which starts later this year, is to encourage councils to retain and add to their existing stock of social housing by providing assistance with the purchase of new stock and the modernisation of existing rental stock.

The details for the initiative are yet to be finalised but it is expected that government assistance will be in the form of interest-free suspensory loans for both acquisitions and modernisations. In the case of acquisitions it is proposed there would be a 50:50 split of the cost of purchasing the property between the council and Housing New Zealand. In the case of modernisations there would be a maximum 100 percent suspensory loan of $30,000 per unit from Housing New Zealand over a specified term

A condition of the loans would be that the housing is retained for social housing purposes and must meet a community need. In return councils would have to agree to conditions whereby the government would be able to recover its contribution if the properties were sold or no longed used for social housing.

ENDS

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