Housing NZ ready to ramp up state housing - now it's up to the Government

State housing in Auckland.
State housing in Auckland. Photo credit: Getty

Housing New Zealand has told the Government it would have no problem ramping up the building of state housing - it just needs the go-ahead. 

The word was unequivocal.

"We have capacity to build whatever the Government wants us to build," Housing NZ chief executive Andrew McKenzie said on Wednesday.

"As an organisation, we have the capacity to react very quickly to any change in demand."

The job of building state housing is made a lot easier for the country's largest landlord thanks to two major factors - the efficiency of pre-fabricated housing and Auckland Council's plan to allow more dense housing.

The Government has ordered a halt to the sale of state homes and currently plans to build 1000 state homes a year, but Housing Minister Phil Twyford has indicated he'd like to see that goal doubled. 

At a briefing in Parliament, Housing NZ representatives said the building programme is capable of gearing up, but it all comes down to the (much awaited) Government Budget.

Politicians attend the Housing NZ briefing.
Politicians attend the Housing NZ briefing. Photo credit: Newshub.

Prefabricated housing makes Housing NZ's job of building houses much faster, cheaper and simpler.

When builders work on-site, it costs Housing NZ about $3200 per square metre. The chief executive explained they spend a bit more on materials upfront, as it's cheaper in the long-term. 

The square-metre cost is halved for prefab housing.

Builders working off-site in warehouses, prefabricating housing, are four times as productive, Housing NZ said.

The second factor that bolsters Housing NZ's confidence is the draft Auckland Unitary Plan, which "has massively increased our capacity to build", Mr McKenzie said.

The Unitary Plan has rezoned swathes of Auckland suburbs, allowing for higher density building. For Housing NZ, when the plan comes into force, that will mean more dwellings can be built on existing land.

But there remain significant challenges for Housing NZ.

The average age of a state house is 45 years.

Simply maintaining the existing houses is a "significant" build programme in itself.

"Our stock is very old," Housing NZ leaders kept telling the committee of politicians.

At any one time, 1000 of Housing NZ's 63,000 homes are out of circulation because they are going through some form of touch-up.

The number of meth-contaminated houses has levelled off after a significant drop, but 400 homes are still unoccupied due to 'contamination' at any time. The drop came after Housing NZ adjusted the level of meth presence permitted before a house is considered "contaminated".

The issue of meth contamination is "very complex", the ministry said. 

On one hand, Housing NZ wants its housing to be healthy to live in. On the other, where will people go if they are booted out of a state home?

Other agencies have told Housing NZ that a stable housing environment is "critical" to treating addiction.

Mr McKenzie said a huge rebuild project provided an opportunity to build houses "better suited" to Housing NZ tenants.

The Government has two state housing announcements later this week. 

As for Mr Twyford's desire to build 2000 state houses a week, we won't know whether that's happening until the Budget is revealed.