Govt Takes Action Following Independent Review of Kāinga Ora

Minister Bishop emphasized the impact of Kāinga Ora's performance on both the Crown's fiscal position and the well-being of its tenants.

Following an independent review of Kāinga Ora – Homes and Communities, the government has announced a series of immediate actions aimed at addressing concerns regarding the performance and governance of the agency responsible for housing and community development, announced Housing Minister Chris Bishop.

Kāinga Ora, a significant Crown entity with assets totaling $45 billion and an annual expenditure exceeding $2.5 billion, plays a pivotal role as New Zealand's largest landlord, providing housing to those in need. However, recent scrutiny has revealed significant shortcomings in its operations.

Minister Bishop emphasized the impact of Kāinga Ora's performance on both the Crown's fiscal position and the well-being of its tenants. Despite substantial investment over the past six years, the agency has struggled to effectively manage its housing stock, leaving thousands of properties vacant and tenants facing substantial rent arrears. Additionally, concerns have been raised regarding the agency's financial viability, with a forecasted operating deficit expected to exceed $700 million by 2026/27.

The independent review highlighted issues of financial mismanagement and governance deficiencies within Kāinga Ora, noting a lack of fiscal discipline and accountability. In response, the government has approved four immediate recommendations, including the alignment of contractual arrangements with Community Housing Providers (CHPs), the refreshment of the Kāinga Ora Board, and the issuance of a Simplified Direction to the agency.

Furthermore, Simon Moutter has been appointed as the new Chair of Kāinga Ora, bringing with him extensive leadership experience from various sectors. His appointment signals a commitment to implementing necessary changes within the agency. Minister Bishop reiterated the government's expectation for Kāinga Ora to develop a detailed plan to improve financial performance and eliminate losses.

Looking ahead, the government will consider additional recommendations from the review, including transitioning to a model where the government adopts an active purchaser role to improve housing outcomes cost-effectively. These proposals will be evaluated in alignment with broader social policy objectives, with a focus on enhancing housing funding settings.

Minister Bishop expressed gratitude to Sir Bill English, Ceinwen McNeil, and Simon Allen for their thorough review and emphasized the government's commitment to addressing the challenges facing Kāinga Ora to ensure the provision of quality housing for all New Zealanders.