The government has announced a $150 million fund designed to make borrowing easier and cheaper for community housing providers (CHPs) aiming to build more social housing across Aotearoa.
Housing Minister Chris Bishop stated the initiative aims to “level the playing field” between the state provider, Kāinga Ora, and the community sector.
Paul Gilbert, Chief Executive of the sector’s peak body Community Housing Aotearoa (CHA), welcomed the announcement, describing it as a potential “game changer” for his members.
“The answer to your question is absolutely yes,” Mr Gilbert told RNZ when asked if the cheaper borrowing would make a real difference. “It’s a game changer, what happened yesterday.”
CHA represents over 90 community housing providers nationwide, who are currently building homes from Invercargill to Kaitaia. Mr Gilbert clarified that while CHA itself won’t borrow, the fund will directly benefit these member organisations.
Currently, CHPs access finance through various means. Some, particularly those originating from former council housing stock, have used the Local Government Funding Agency (LGFA). Others rely on traditional bank loans, similar to individual mortgages, or have worked with organisations like Community Finance which issues bonds.
Mr Gilbert stressed that the number one cost in delivering new social housing is finance. “Yesterday’s decision basically means that finance is no longer a barrier or a blockage for our providers to deliver housing,” he said.
The new fund is intended to streamline the borrowing process and offer more favourable interest rates. However, Mr Gilbert cautioned that the initial $150 million is “just the beginning” and a “small number” considering the scale of the housing need, with around 20,000 families on the social housing waiting list for homes that often don’t yet exist.
“The numbers we’re talking about here are in the tens of billions,” he stated, adding that the ultimate goal involves Treasury establishing a larger facility. “That’ll be billions eventually… that will allow that money, that lower-cost money, to pass through to the community housing providers who are charities.”
Acknowledging the long-term nature of addressing the housing crisis, Mr Gilbert highlighted the importance of cross-party support for sustained progress. He noted that both Minister Bishop and Labour’s housing spokesperson, Kieran McAnulty, who wants to take a “closer look” at the initiative, have spoken about the need to work together.
“It’s super important,” Mr Gilbert said. “There is a growing realisation in New Zealand that we must have longer-term settings, more consistent funding settings and policies so that we can dig ourselves out of our housing crisis.”
Addressing the question of who owns the housing, Mr Gilbert aligned with the Minister’s view that ownership between Kāinga Ora or a CHP is less critical than the outcome.
“Our absolute preference and bottom line is that those assets, those houses, that money is retained and recycled for that purpose [housing vulnerable people] and not privatised,” he explained. “So I don’t care either if it’s Kāinga Ora or a hapū or iwi charity or one of my members… so long as the money and the asset is retained and recycled for the purpose for which we funded it as taxpayers.”
