New Zealand Social Housing Reform: Progress, Challenges, and Future Plans 2026

Good morning, everyone.

It’s great to be here at the Community Housing Aotearoa Conference again – I believe the last time was November 2024 – I look forward to catching up with many of you.

I’d like to acknowledge Paul Gilberd and his team at CHA for hosting this event and inviting me to speak.

I’d also like to acknowledge Mana whenua, Ngāti Whātua Orakei, and AUT Vice-Chancellor Professor Damon Salesa.

And I’d like to thank everyone in this room.

From community housing providers to tenancy managers, financiers, iwi, support service providers, community leaders, and developers. All of you do a great job providing warm and dry homes for people in need – and so much more.

As a Minister, there are some things I don’t like to do, and there are many long hours and late nights away from home.

But one of the best parts of my job is attending openings of life changing homes across the country and meeting the people who are receiving support – seeing the difference it makes.

It’s a large part of why I do what I do.

You’ve heard me say this before: the Government backs affordable housing and social housing.

But – like many of you – we also think the current system is broken.

The Government can do a much better job at supporting those in most need and being more ambitious for people.

That’s why we’re creating an entirely new Housing Investment System centred on three principles: building the right types of homes, in the right places, for the right people.

We’re also progressing a broader Review of the Social Housing System, which I’m not pretending will be easy, but – in my view – is the right thing to do.

Today, I want to talk to you about the progress we’ve made over the past two and a half years.

Then, I want to go over the Government’s vision for housing supports and our plan to achieve it, including the Review of Social Housing, which I know many of you would like more detail on.

Root-cause of our housing crisis Before I get into it, I’d like to quickly touch on our wider housing crisis.

Because you can’t look at social housing in a vacuum.

The truth is, that our failure to create a functioning private housing market has led to a cascading series of extremely difficult and expensive public policy problems to solve, with real human costs.

We all know housing costs are too expensive.

Over the last 30 years, New Zealand has seen some of the largest house price growth in the OECD.

Similarly, from 2017 to 2023 – average rents increased by around $180 per week.

In the year to June 2024, around 46% of renters spent more than 30% of their income on housing. Māori and Pacific households fared worse at 64% and 70% respectively.

There are also around 20,000 families on the social housing wait list.

It’s clear that unaffordable housing – largely caused by the artificial scarcity of developable urban land, and other planning barriers – has contributed to increased need.

This is bad for all New Zealanders, it’s phenomenally expensive for government, and – most critically – it has made life tougher for people at the hard end.

Central government spends around $5 billion on housing assistance per year in many different forms. That includes the accommodation supplement, Income Related Rent Subsidies, emergency housing grants, transitional housing, and initiatives to address homelessness.

If that $5 billion amount stays flat over the 4-year budget period, the government will spend over $20 billion on helping people to be housed.

That’s two thirds of central government’s school property portfolio, or billions of dollars more than our entire network of hospitals – an astonishing amount of money.

This isn’t to say that we shouldn’t spend money on housing people who need help – this is to make the broader point that kiwis and the government are paying the price for a housing challenge that, at least in part, is of our own making.

Our housing challenge has also manifested into a moral issue.

A generation locked out of home ownership. People living paycheque to paycheque just to afford rent. And a long list of families in housing need who can’t get access to a warm dry home.

I am committed to fix housing by focusing on the fundamentals – this includes our Going for Housing Growth programme, improving the rental market, making changes to lower construction costs, reversing aspects of the earthquake prone building laws, making it easier to build granny flats and papakāinga, and reforming of our planning laws to create a much more enabling system.

But no matter how well-functioning the private housing market is, there will always be those who need extra support, and that’s a legitimate role of the State – otherwise, why are we here.

Progress to date Since coming into Government, we have made good progress: House prices have been largely flat, Rents are flat to falling, First home purchases have been at record highs, and There are 5,000 less households on the housing register.

Now I’ll quickly touch on work we have progressed since I spoke to you last.

Kāinga Ora Turnaround Plan I’ll start with the Kāinga Ora (KO) Turnaround Plan, which was released in February 2025.

When we came into Government, KO was out of control, with debt on its balance sheet rising from $2.3 billion in 2017/18 to $16.5 billion in 2023/24. KO’s own 2023 Board-approved budget also showed debt forecast to grow to $24.8 billion by 2026/27. That’s about 12 New Dunedin Hospitals.

That situation was unsustainable.

Every dollar KO failed to manage properly was a dollar that could not go toward providing good outcomes for kiwis in housing need.

Since the Turnaround Plan was released, KO has delivered better outcomes for tenants and communities – all while getting its books back in order and progressing a strong delivery programme.

Tenancy satisfaction is rising, vacancy rates are lower, fewer tenants are in rent arrears, and KO is doing a better job of managing its tenants to support safe, respectful communities.

On the financial side of things, KO has got peak debt down by $10 billion, build costs are down, and operating costs are down.

On the delivery side, KO has delivered 5,000 net new social homes (7,800 gross) since November 2023 but is now focused on keeping its stock at around 78,000 while improving the quality, typology, and location of home through its renewals and retrofit programme.

For instance, KO is selling high-value properties – like the $3.4m villa next to Lorde’s old house on Trinity Street in Ponsonby – and reinvesting in other homes.

This includes investing in smaller places, as 55 percent of people on the register need a one-bedroom home, but only 12 percent of KO’s stock is one-bedroom.

While there is more work to do it is clear that Kāinga Ora is getting back on track. This is an excellent example of the Government’s drive to fix the basics and build the future.

Lower financing barriers for CHPs Let’s move onto lower financing barriers for CHPs.

Since I spoke to you last, the Government has taken two actions that have already started to lower barriers to financing for CHPs.

In September 2025, we established Crown lending facilities of up to $150 million for the Community Housing Funding Authority – and I’d like to thank James Palmer for his fantastic work in this space.

CHFA is already helping CHPs access finance. They have advanced $530m of funds nationwide and financed 34 community and affordable housing providers. This frees up resources to deliver more homes, faster, and for less.

With the banks, CHPs were paying about 8.5% interest rates, and now CHFA is enabling refinancing at a fixed rate of 4% for three to five years.

There are also savings for taxpayers. For new CHP social housing, the government could save around $45k per house over the first five years of a 25-year IRRS contract. This enables us to continue to back the CHP sector with more investment over time.

This also means governments will be able to fund more places with the same amount of money.

On top of the lending facility, in October 2025, the Government launched a second action to reduce CHP borrowing costs – The CHP Bank Loan Guarantee Scheme, where the Crown guarantees 80% of loans to providers by participating banks.

The scheme can support up to $900 million in both new lending and the refinancing of up to 50% of providers’ existing lending.

Budget places While we have been levelling the playing filed between KO and CHPs, we have continued to back social and affordable housing.

Since coming into Government, CHPs and KO have delivered 7,500 net new social homes (9,200 gross).

We have approved $426m for Māori-led delivery of around 1,000 homes – including papakāinga, affordable rentals, and owner-occupied housing.

We have also continued to invest in new places.

Through Budgets 24, 25, and 26 we have built a genuine, long-term social housing pipeline of opportunities for the CHP sector and other providers.

This is something that the sector has been asking for, and that no government has really delivered – until now.

I’ll break down the pipeline.

In Budgets 24 and 25, the Government funded at least 2,050 places to be delivered by June 2027, which is actually now looking closer to 2,200 places – which is great!

As of May 2026, over 500 places have been delivered, and 85% of the 2,200 places will be one or two bedrooms.

Flexible Fund Then, in Budget 2025, the Government established the Flexible Fund, which is supporting the delivery of 675 to 770 homes for delivery from July 2027 to the end of 2029.

The Flexible Fund collapses and combines previous housing programmes.

Until recently, the status quo was a confusing alphabet soup of tightly defined, duplicative programmes where providers are forced to mould their models to rigid criteria or be left out.

We aren’t doing that anymore.

We are moving to a future state with one flexible pot of money that can be deployed to all types of interventions – including affordable rentals and new, innovative solutions – that best meet housing need and represent good value for money.

The last part of the pipeline is made up of the places funded in Budget 2026.

Budget 2026 topped up the Flexible Fund by $69.2m, which will support the delivery of an additional 1,800 to 2,250 homes over three years starting from July 2028.

I’m really proud of building a credible, deliverable, and long-term pipeline for CHPs and other providers.

And, I don’t want to get ahead of the Budget process, but my intention is to continue to top up the Flexible Fund and build up the long-term pipeline.

Vision for Flexible Fund and Housing Investment Plan A key differentiating factor of the Flexible Fund – is how places are allocated.

In the past, 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.

But now we have a Housing Investment Plan, which will be updated every year and/or funding round.

The first Plan was published in 2025 and uses detailed data and local insights to identify where housing need is highest and which types of homes are required.

In other words, we want to ensure future investment reflects the real-world needs of communities.

The first Plan had a large focus of need in locations – like Far North, South Auckland, Eastern Bay of Plenty, Gisborne, Hastings, and the main centres.

This is a good first step.

But my vision is for the Housing Investment Plan to use high-quality data to identify and target investment into priority cohorts.

Cohorts that, if we invested in them, would deliver the greatest benefits to households, to government, and to society.

A real social investment approach.

I have a hypothesis that some of these cohorts are recently released prisoners, families doing it tough with young children, and kiwis with mental health challenges or disabilities.

Here’s one statistic that has stuck with me – NZ longitudinal research following people post release shows a 4.6 times higher reimprisonment risk for those with unstable housing.

On a more personal note, I have been exercised about two stories of people falling through the cracks.

The first is the guy in New Plymouth in a wheelchair, living in a motel for over four years with his son just waiting for a KO house. It took two years just to sort out a ramp.

The other, is a man who was in a mental health care unit and had to stay there for years because there was nowhere for him to go.

Both examples are disgraceful, and it’s exactly what I am trying to change.

Now, I don’t want to guess what the cohorts are, I want to get it right.

That’s why I’ve asked the Social Investment Agency to do the analysis with Ministry of Housing and Urban Development and the Ministry of Social Development using IDI and other rich data.

This analysis will get more sophisticated overtime and will feed into future Housing Investment Plans.

Review of Social Housing Now, I’ll finish off with the Review of Social Housing – or ROSH.

This is a multi-year reform of our social housing system.

I want to create a system that is fair, represents value for money, supports upward mobility, and where those in most need receive help for the period that they need it.

There are some fundamental problems in the current social housing system that we’re seeking to address – The current system is unfair. Similar households can get very different financial support depending on whether they are in social housing or a private rental.

On average, social housing tenants on a main benefit have $105 more a week left after housing costs than comparable private renters receiving the Accommodation Supplement.

The system is also expensive, and our limited stock is not being used effectively. For example, 29 percent of people in social housing can afford a lower quartile market rent. That’s not to say those people need to move on, as they could require social housing for other reasons. But it makes the point that current settings don’t necessarily target those in most need.

Many people are also stuck in social housing dependency – and it’s largely the fault of the system. 30 percent of tenants have been in social housing for over 10 years. And households are now forecast to remain there for an average of 16.7 more years.

Tenants are simply not incentivised or supported enough to gain more independence.

The changes through ROSH aim to deliver a fairer, more effective and efficient system.

There are three key shifts to be progressed over a number of years: The first is refocusing social housing to those who need it most.

The second is delivering a package of interventions to help people through the social housing system towards independence.

The third is to improve fairness and financial incentives by closing the gap between social and private housing.

On the last shift, you will be aware of the three initial changes, that include: Increasing the minimum Income Related Rent contribution for social housing tenants and those in emergency and transitional housing, from 25 percent to 30 percent of income from 1 April 2027.

Increasing the maximum weekly AS amount for households by between ~$10 and ~$30 per week.

Reducing the maximum rate of Temporary Additional Support to better reflect its original purpose as temporary hardship support.

I acknowledge that these changes are not easy and are not supported by everyone. I understand that.

But, if I’m being honest, these are the tough decisions that need to be made.

The very real alternative is a fiscally unsustainable, and untargeted regime that leaves behind some of the most vulnerable New Zealanders.

If money was no object, we could fund 20,000 houses tomorrow.

But two things – government funds are constrained – that’s reality.

And, based on recent history, I don’t think funding tens of thousands of places in a short space of time, at vast expense will solve the problem.

If that was going to work, then Labour would have solved the problem. But they didn’t.

Over the same period that they delivered over 12,000 additional public homes, the housing register quadrupled (2017-2023).

Now, some of you might say – well, that’s because housing costs became more unaffordable and swiftly outpaced income.

And that’s precisely my point.

The most effective, long-term fix for our housing challenge – broadly – is to make housing more affordable.

Social housing also needs to be reshaped to be a solution for those who need it most, for the period that they need it.

Now, some people will need it for the rest of their life, others will need it as a stepping stone. That’s OK – we don’t want a one-size-fits all solution.

Change is difficult, but it’s the right thing to do.

In terms of next steps – Besides the Budget 2026 changes, we have not locked in any decisions.

We need to work with you, the sector, to develop proposals to give effect to these key shifts. And if there are other shifts you think would be better – then I am up for hearing your ideas.

I have directed MSD and HUD/MCERT Officials to engage with stakeholders from July to September this year to develop this thinking.

In addition to broader engagement on the proposals, MSD and HUD will be setting up a small expert advisory group to support this work.

Next year, Ministers will make further decisions on policy proposals in line with the three shifts we recently announced, including the basis of a new needs assessment and interventions to support mobility.

I know many of you are keen to understand the data and advice that underpinned the May announcement.  We are working to release the material which supported our decisions. This will be available in July.

My officials will be talking with the sector more in the second half of this year with iwi, community housing providers, Kāinga Ora, and social service providers as the next stage of ROSH is developed.

Conclusion In closing, I want to be clear: the Government cannot deliver a better social housing system without you.

Providers are not just delivery partners, you are innovators, problem‑solvers, and deeply connected to the people and communities we are trying to support.

Your experience on the ground is important to us.

The reforms and investments I’ve outlined today are about giving you greater certainty, and a stronger platform to plan and deliver for the long term.

I genuinely want to work together to build a better housing support system.

I look forward to continuing this work with you and I thank you for the commitment, professionalism, and empathy you bring to this important work every day.