Tenants at a Hamilton East state housing block no longer deemed fit for purpose could have to move from their homes as Housing New Zealand looks to redevelop the site.
The corporation has notified the 39 tenants in the block of houses centred around Jebson Place about the potential redevelopment, and is seeking expressions of interest from "redevelopment partners".
The 58 units on the 21,000 square metre site would be demolished in stages to make way for new state-owned detached and duplex units and, ultimately, homes for private owners.
The houses, which were built between 1959 and 1961, are considered uneconomic to upgrade to modern standards, according to Housing New Zealand regional manager Darren Toy.
"The properties are poorly designed by today's standards - for example, they've got narrow hallways, very small bedrooms and are poorly configured."
Mr Toy said the cost of maintaining the properties at the current rate did not make "economic sense" and they were also not fully insulated, given their age.
Many of the houses, which are wedged between Old Farm Rd, Cassidy St and Day St, have fallen into disrepair.
More than a dozen houses were boarded up when the Waikato Times visited. Many were tagged and some windows had been smashed.
Residents said that as tenants left, Housing NZ boarded the units up.
One resident, who declined to be named, said that he could understand the need for redevelopment, but a number of tenants had lived in the neighbourhood for a long time.
Mr Toy said should tenants be required to relocate, Housing NZ would work with them to find new homes.
"If the redevelopment goes ahead, it is likely we would use a staged approach to moving tenants.
"We will make every effort to relocate people to an area of their choice."
All reasonable relocation costs for tenants would be covered by the corporation.
The provision of social housing is being overhauled by Housing NZ, which is moving towards a mixed tenure model, where state houses exist alongside affordable private homes, and social housing operated by non-government organisations.
Housing New Zealand chief executive Glen Sowry said the Hamilton East redevelopment would exemplify the latest in modern, healthy, well-designed homes, suitable for both social housing and private ownership.
Expressions of interest from redevelopment partners closed April 14 and it was hoped construction would start by the end of the year, he said.