New Social Housing Investment Plan released

Source: New Zealand Government

The Government has today released its new Housing Investment Plan, a major shift to a data-driven, needs-based approach to housing investment.

“For too long, governments have invested in social housing without a clear understanding of what is needed, where it is needed, and who is best placed to deliver it,” Mr Bishop says.

“In Budget 2025, the Government created a new contestable Flexible Fund for social housing. From 1 July 2027, it will replace the current patchwork of programmes and funds. The Flexible Fund will invest in social housing and affordable rentals delivered by community housing providers, Māori providers, and others. In future years, Kāinga Ora will also be eligible for additional social homes through the Fund. 

“Put simply – our new approach will ensure we build the right houses; in the right place, for the right people with the right support.

“The Housing Investment Plan released today sets out how investment decisions will be made so that every dollar delivers the right homes in the places with the greatest need. 

“The Plan outlines the Government’s investment objectives, provides a nationwide needs analysis, sets out clear purchasing intentions, explains the procurement approach, and establishes how delivery will be monitored.”

New needs-based system

The Housing Investment Plan uses detailed data and local insights to identify where housing need is highest and which types of homes are required.

“A clear example is that 55 percent of people on the Housing Register need a one-bedroom home, but only 12 percent of Kāinga Ora’s stock fits that need. The Plan ensures future investment reflects the real-world needs of communities,” Mr Bishop says.

Officials analysed the Housing Register, Census 2023 data on severe housing deprivation, and local insights from providers across the country. They also assessed forecast household growth, the homes required to reduce housing need, and the existing pipeline of funded social homes.

“This analysis shows that the areas with the highest housing need are the Far North, South Auckland, the Eastern Bay of Plenty, Gisborne, and Hastings. Our main centres also have large numbers of applicants on the Housing Register. We propose to focus investment on those target locations and main centres.

“It also showed that the communities which tend to have the greatest housing need are whānau Māori, single parents with dependent children, older people, people with disabilities and – particularly in South Auckland – Pacific peoples.  

“The analysis also guides decisions on the type of housing required. It confirms the continued need for social housing, Māori housing, and affordable rentals, and highlights the vital role of Community Housing Providers and Māori providers.”

Flexible Fund to support tailored local solutions

“The Flexible Fund allows providers to bring forward solutions that best meet local demand,” Mr Bishop says.

“Instead of forcing good ideas into rigid categories, we can support interventions that target need and offer strong value for money.

“The Fund includes 41 million dollars in operating funding over four years and 250 million dollars in capital funding over ten years from 1 July 2027. It is expected to support between 675 and 770 social homes and affordable rentals in its initial phase.

“We have also made affordable rentals eligible for the Fund. Affordable rentals bridge the gap between intensive support like social housing and lighter support like the Accommodation Supplement. This helps remove the financial cliff that can discourage people from moving toward housing independence.”

“Some people in social housing are understandably reluctant to improve their circumstances and move to housing independence because they risk being worse off financially. That’s the definition of a perverse incentive – and it traps people. 

“I want a system that supports people to move through the housing continuum. Affordable rentals are the essential first step.”

Clear purchasing intentions and measurable outcomes

“The Plan sets out how the Government will procure new housing and track progress,” Mr Bishop says.

“This is a more transparent, disciplined, and outcome-focused system. Providers will know what we intend to purchase and where, and communities will be able to see what investment is achieving.”

Partnership at the centre of delivery

“Community partnership remains essential,” Mr Bishop says.

“No government can deliver the best outcomes without the knowledge and experience of local providers, iwi, councils, and community groups. The Plan is designed to work alongside that expertise and support the right interventions in each place.”

Levelling the playing field

“The Government’s ambition is for a level playing field between community housing providers and Kāinga Ora. The underlying ownership of a house should not matter. What matters is providing warm, dry homes to those who need them, along with the right support.

“Community housing providers have historically borrowed at higher rates than Kāinga Ora, which raises capital through the Crown. Earlier this year we introduced a loan guarantee scheme for community housing providers and established Crown lending facilities for the Community Housing Funding Agency. These changes are already helping providers borrow at lower rates.

“Our ambition is simple. We want a system that delivers the right homes, in the right places, with the right support. The Housing Investment Plan provides the framework to achieve that.”

Notes to Editor:

The Housing Investment Plan is attached.

Investment locations and indicative allocation of homes

The Flexible Fund will deliver new social housing from 1 July 2027. In the meantime, funding through Budgets 2024 and 2025 is delivering more than 2,000 additional social homes through Community Housing Providers. 

Note regarding estimated number of homes funded through the Budget 2025 allocation to the Flexible Fund:

When the Flexible Fund was set up in Budget 2025, the original range of 650 to 900 homes reflected the uncertainty about what types of homes would be needed across the country. 

Now that officials have completed the needs analysis and identified the most pressing investment locations, we have a clearer picture of the type of housing required. In many of these areas, the current need is for social housing, which costs more to deliver than affordable rentals.

MIL OSI