Kāinga Ora’s Turnaround Plan to Restore Financial Stability and Refocus on Core Social Housing Mission
A key part of the plan addresses the looming “fiscal cliff” created by the previous government, which stopped funding new social housing beyond June 2025.

- Country:
- New Zealand
Housing Minister Chris Bishop has unveiled a major turnaround plan for Kāinga Ora, designed to refocus the agency on its primary mission of building and managing social housing in a financially sustainable way.
“Kāinga Ora is a critical Crown entity, with assets worth $47 billion and annual expenditures exceeding $2.5 billion. As New Zealand’s largest landlord, managing approximately 75,000 homes, it plays a vital role in housing vulnerable Kiwis,” Bishop said.
However, under the previous government, Kāinga Ora's financial position deteriorated significantly. Debt skyrocketed from $2.3 billion in 2017/18 to $16.5 billion in 2023/24, while operating deficits ballooned from a $76 million surplus to a staggering $568 million deficit. Staff numbers surged by 74% between 2020 and 2023, yet the social housing waitlist still grew to over 20,000 applicants.
Independent Review Uncovers Major Issues
Recognizing these financial and operational challenges, the Government commissioned an independent review in December 2023, led by former Finance Minister Sir Bill English. The review, released in May 2024, identified two fundamental issues:
- Kāinga Ora was underperforming and not financially viable without major cost-saving measures and funding reforms.
- The broader social housing system was failing to deliver the results New Zealand needs.
In response, the Government refreshed Kāinga Ora’s board and tasked them with developing a turnaround plan to restore financial stability and improve housing outcomes.
Five Key Components of the Turnaround Plan
The plan, now approved by Cabinet, sets out five key priorities:
- Refocusing on Core Functions – Kāinga Ora will concentrate on building, maintaining, and managing quality social housing while acting as a responsible and effective landlord.
- Improving Tenant and Community Management – Stronger oversight and support for tenants, with an emphasis on responsible tenancy management.
- Better Housing Portfolio and Construction Management – Streamlining build processes to ensure homes are delivered efficiently and cost-effectively, including simplifying specifications and leveraging multiple delivery channels.
- Enhancing Organizational Performance – Cutting high overhead costs and maximizing Kāinga Ora’s buying power to reduce financial inefficiencies.
- Establishing Sustainable Funding and Investment Practices – Ensuring long-term financial stability through responsible borrowing and investment strategies.
Renewing Kāinga Ora Housing Stock
A key part of the plan addresses the looming “fiscal cliff” created by the previous government, which stopped funding new social housing beyond June 2025. The coalition government has taken steps to bridge this gap, funding approximately 2,650 new Kāinga Ora homes through 2026, alongside an additional 1,500 social houses delivered by Community Housing Providers.
From 2026/27 onwards, Kāinga Ora will manage around 1,900–2,000 housing construction projects per year, comprising:
- 1,500 new builds
- 400 major retrofits of existing homes
- 900 property sales annually (targeting outdated or high-value properties to reinvest in new developments)
Bishop emphasized that despite sales, the total number of Kāinga Ora social houses will not decrease over time, as older homes are replaced with newer, fit-for-purpose housing.
Cutting Construction Costs and Narrowing Kāinga Ora’s Scope
One of the review’s stark findings was that Kāinga Ora has been building homes at an estimated 12% above market rates. The plan commits to aligning Kāinga Ora’s construction costs with industry benchmarks to ensure efficiency and better value for taxpayers.
Additionally, the Government is scaling back Kāinga Ora’s non-core responsibilities. The agency was previously tasked with managing infrastructure funds, large-scale urban developments, and KiwiBuild underwrites. Under the new plan:
- KiwiBuild underwrite responsibilities will be transferred to the Ministry of Housing and Urban Development.
- The Infrastructure Acceleration Fund will move to the new National Infrastructure Funding and Financing Agency.
- The Kāinga Ora Land Programme will be wound down entirely.
- Legislation will be introduced this year to amend the Kāinga Ora Homes and Communities Act to reflect these changes.
Financial Recovery and Long-Term Impact
The turnaround plan is expected to significantly reduce Kāinga Ora’s financial burden. Key projections include:
- A $190 million net reduction in deficits for this financial year.
- A $354 million reduction in the deficit by 2027/28 compared to pre-election forecasts.
- Debt levels $1.8 billion lower by 2027/28 than previously forecasted.
Bishop praised Kāinga Ora’s refreshed leadership for their swift action, while making it clear that the Government will closely monitor progress.
“Today’s plan is a major step in the right direction for Kāinga Ora. I want to thank Chair Simon Moutter and the Board for their hard work. The Government remains committed to ensuring Kāinga Ora delivers financially sustainable, high-quality social housing that meets the needs of New Zealanders,” he concluded.
The implementation of this plan marks a significant shift in the way Kāinga Ora operates, moving towards greater accountability, financial prudence, and a sharper focus on its core mission.
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- Kāinga Ora
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- Sir Bill English