Govt Launches Major Financial Boost to Empower CHP Growth in Social Housing

Housing Minister Chris Bishop announced the new measures as part of a wider strategy to ensure all New Zealanders in need have access to warm, dry homes, regardless of who owns them.

The Government has unveiled a significant package of financial reforms aimed at accelerating the growth of Community Housing Providers (CHPs) and placing them on equal financial footing with state housing agency Kāinga Ora. Housing Minister Chris Bishop announced the new measures as part of a wider strategy to ensure all New Zealanders in need have access to warm, dry homes, regardless of who owns them.

Currently, CHPs are responsible for around 16% of the country’s social housing stock, equating to approximately 13,000 homes. In Budget 2024, the Government committed to funding an additional 1,500 social houses, with 1,000 of those to be delivered by CHPs starting from June.

Minister Bishop emphasized that the new initiatives are underpinned by the principle of "competitive neutrality"—the idea that it should not matter whether a social home is owned by a public agency like Kāinga Ora or a private not-for-profit CHP. What truly matters, he said, is that the home is fit for purpose and that tenants receive the support they need.

“In some areas and for some people, CHPs are the best solution. In others, Kāinga Ora is better placed to deliver,” said Bishop. “But for that to happen, both providers need equitable access to finance.”

Crown Lending Facility for CHPs

To address the financial disparity between CHPs and Kāinga Ora, the Government is establishing Crown lending facilities worth up to $150 million for the newly formed Community Housing Funding Agency (CHFA).

CHFA, launched in 2024 by Community Finance, is a specialist funding body that aggregates borrowing requirements across the CHP sector to secure more favorable interest rates through scale and efficiency.

CHPs currently rely on private market debt, often at significantly higher interest rates than the borrowing terms available to Kāinga Ora, whose debt is guaranteed by the Crown. The new Crown-backed facility will help to bridge this gap.

The first phase of funding will begin with an interim lending facility in early April to meet urgent financing needs. The fully operational liquidity facility is expected to be in place later this year.

“This facility will provide CHFA with the foundation to raise hundreds of millions—and eventually billions—of dollars in lower-cost debt,” Bishop explained. “That will not only support the delivery of more social housing but also expand CHPs’ involvement in the broader affordable housing market.”

CHP Loan Guarantee Scheme Under Development

In a complementary initiative, the Government is also exploring the creation of a loan guarantee scheme for CHPs. This would mirror past government-backed guarantees such as the Business Finance Guarantee Scheme and the North Island Weather Events Loan Guarantee Scheme.

Under such a scheme, the Crown would take on a share of the default risk on loans to CHPs. This would reduce the amount of capital that lenders are required to hold, freeing up liquidity and enabling banks to offer lower interest rates and more favorable lending terms.

“We expect this to unlock a significant increase in private sector participation in the sector,” said Bishop. “If banks see value in this scheme, the Minister of Finance will finalize its design with a view to launching it later this year.”

The Government is currently in discussions with major banks to assess their appetite for participation.

A New Era for Community Housing

These two initiatives—the Crown lending facility through CHFA and the proposed loan guarantee scheme—represent a major step forward in the Government’s social housing strategy. Together, they are expected to dramatically scale up the ability of CHPs to finance new housing developments and expand their operations.

“This is a really exciting day for the CHP sector in New Zealand,” Bishop said. “We’re putting in place the financial tools they need to succeed, and ultimately, this will mean more warm, dry homes for people in need.”

The reforms come amid growing pressure on the country’s social housing system, with thousands of families on waiting lists and a critical need for long-term housing solutions. By empowering CHPs with better financial access, the Government hopes to not only increase the volume of housing but also improve its quality, sustainability, and support services.

Minister Bishop concluded, “The changes are complex but crucial. By levelling the financial playing field, we’re helping CHPs reach their full potential as key players in New Zealand’s housing future.”