Govt to ease ex-state housing rules

The Government is set to loosen a requirement that former state houses be kept as low-income rentals for those most in need.

The move comes amid calls for it to sweeten the deal for potential buyers of up to 8000 Housing New Zealand Corporation (HNZC) homes.

It is also talking up the likely role of property developers, as one of the countries biggest social agencies walks away from plans to bulk-buy former state houses.

The Salvation Army on Monday said it would not buy some of the 1000-2000 units slated for sale this year, though it was open to be part of a consortium.

The move has seen pressure increase on the Government to offer big discounts if it wants to fulfil plans to boost the role of community and private landlords and wind back HNZC's dominance.

There were even calls on Monday for it to hand over the houses at nil cost, which Housing Minister Bill English rejected .

But he said the Government was flexible on a number of fronts, including guaranteeing long-term income-related rental subsidies and allowing buyers greater flexibility in what they did with the properties.

In January Prime Minister John Key said the houses sold "will have to stay in social housing unless the Government agrees otherwise, and existing tenants will continue to be housed for the duration of their need".

But English said potential buyers argued the properties therefore needed to be cheap.

"They argued they needed maximum flexibility and we are open to that," he said.

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English said Key's promise was "for the tenant and around the subsidy" not for the particular house 

He said the Government was trying to establish the value of the state houses.

"The Government valuation ...looks at them as if we are a successful developer with all the future capital gain built in, which is not how (the Salvation Army) see the assets. So that looks like a big gap."

"The sector is busy trying to talk the prices down. We want to make sure we get fair value for the taxpayer."

He said it was "perfectly logical" that developers be part of consortiums that bought the houses - an option the Salvation Army was open to.

The first sales would be small and relatively straightforward, but the Government's target of 1000-2000 sales would not be completed until 2016.

HNZC has 68,000 rental properties and the social housing sector about 5000, with another 14,000 controlled by local councils.

The Government  wants to boost the non-government sector to 20 per cent of social housing by 2020.

Meanwhile the head of the community housing providers umbrella group, Community Housing Aotearoa, Scott Figenshow said at the moment the sums did not stack up.  "Last month the Government confirmed $1.2 billion of deferred maintenance on the state housing stock.  Why would a provider want to purchase a liability?"

He called on the Government to reinvest into the sector the $220m it was forecast to receive in tax and dividends from HNZC.

"We need to see a community housing sector of equal size to HNZC – not a reshuffling of the current houses."

 - Stuff

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