Social Housing Minister Paula Bennett says "thousands" of state houses could be sold under the Government's new approach to social housing.
But she would be surprised if those sort of numbers were sold in the short term, and Housing New Zealand would be the dominant force in providing social housing in "the foreseeable future", she told TV3's The Nation.
She would not make a commitment that all money earned from the sale of state houses would go back into housing.
"Well, we see ourselves reinvesting and using it better to help vulnerable New Zealanders," Bennett said.
Now some state houses were in the wrong place or were the wrong size.
"Our intention is for people who need housing support to have more stock available. We just may not own it."
She denied it was an asset sale but later said "this is not a big asset sale".
The Government was sticking by Prime Minister John Key's undertaking there would be no more asset sales.
"He said there will always be some commonsense stuff that's happening at the margins of farms and others, and in this case a few state houses," Bennett said.
"So we are not going out there and doing anything en masse that is going to be of major concern to New Zealanders."
While the Government wanted community providers to play a bigger role in social housing, she said she accepted such providers were not up to capacity.
"So some of it is some of those state houses going to those community housing providers. It means they have an asset. They can then partner with either developers or with banks and borrow more money that they can build more."
She would not talk about whether community providers might get state houses at a discount, as the details of the policy were still being worked on.
It was all about having more supply, particularly in the Auckland market, she said.
"So to do that, we need to free up land. We need special housing areas. We need affordable houses being built so that others can buy them. We need to see a track for people, that they're not long term in state houses when, actually, they only need them for short term."
Some state houses could be sold to private developers, who may have to provide a certain number of social or affordable houses.
"We're going through that kind of detail, and it's yet to go to Cabinet. But there's certainly a precedent there for us insisting that a percentage is social housing. The commitment I will make is there will be more places available for people in need for social housing."
In some cases the Government had an obligation to offer houses to iwi first. A "big consultation process" would be carried out during the next few months. She thought some houses could go to first-home buyers.
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