Paula Bennett: sale of state houses no experiment

Social Housing Minister Paula Bennett told TV One’s Q+A programme that the government’s social housing plan which includes transferring 1000-2000 state houses to community housing providers in Tauranga and Invercargill is no experiment.

RAW DATA: Q+A transcript: Corin Dann interviews Social Housing Minister Paula Bennett.

CORIN   Is this is a grand experiment, though? I mean, you're making it up as you go along a little bit, aren't you?

PAULA  Not at all.

Ms Bennett said getting a state house at the moment is a “lottery.”

“they almost have to win  lottery to be at the top of the list and get a vacant house that becomes– particularly in Auckland, and a vacant house become available. We want to change that.”

The Minister also told the programme they’ve got “a number of excellent community housing providers that have indicated that they wanted to get into the market, and it was a place to start.”

“Well, we've got iwi that are lining up. I don't know who's going to get it, and I really don't. So we've got iwi that are lining up and saying that they're interested.”

The Minister also said, community organisations working with developers is not harmful.

“And if they choose to do a small bit of work with developers, then, no, I don't see that as being harmful. I, in fact, see everybody winning out of that.”

RAW DATA: Q+A transcript: Social Housing Minister Paula Bennett

Watch the interview here

PAULA Well, we have people that need social housing. So they need housing that is fit for purpose, fit for them, in the right place, of the right quality. So the argument becomes should the government provide all of that? Or is there a place for us to provide the income so that they can afford it or the subsidy, if you like.

CORIN Why can't the government provide all of it?

PAULA Well, we could if that's what we chose to do, but it becomes all about the housing and, I think, not about the people. So there is a place for community housing providers. They are local. They understand people better. Every bit of evidence tells you local services for local people means better results.

CORIN Why can't Housing New Zealand do that, though?

PAULA Well, they do in places. I don't think it's fair to write them off completely. I think they are making a difference, but there is room in the market for other players, particularly to work either geographically or with specific cohorts of people that need assistance.

CORIN So when you've got– You've identified Tauranga and Invercargill. What is it about those areas? Is it because social housing fits those areas better and the people in those areas?

PAULA It's because we had to start somewhere, and that's the truth of it. And when we looked at it, they were places with stable demand, a number of excellent community housing providers that have indicated that they wanted to get into the market, and it was a place to start.

CORIN Right, people who were keen.

PAULA Yeah.

CORIN I mean, Accessible are the main ones. The IHC – they've got 1000 houses already; they could take another thousand; they're in Tauranga; they're going to get it, aren't they?

PAULA Well, we've got iwi that are lining up. I don't know who's going to get it, and I really don't. So we've got iwi that are lining up and saying that they're interested. Gosh, in Invercargill itself we've got a number of players that have indicated that they're interested. And I think that was part of the reason of choosing those two places as well, that there wasn't one player; there was more than one.

CORIN Okay, but the point is they are going to get these houses. They're going to be sold, these houses, aren't they? You say transfer, but it's a sale of houses at a discount, right?

PAULA Well, I'm sure it will be less than the market value, yes.

CORIN So what do we get as taxpayers in return for what could potentially be millions of dollars’ worth of gain to the likes of Accessible Housing, which might take a thousand houses?

PAULA Better services and better provision for those that are most vulnerable in society, and New Zealanders want a piece of that. They recognise that there are New Zealanders that need extra help. At the moment, what the past has been for decades, is putting them into a state house and leaving them there for literally generations at times.

CORIN So is everyone else who's not going to get into one of those social housing providers missing out, then?

PAULA No, the good news is that we are reforming Housing New Zealand as well. So what's going to happen is alongside how we sort of changed the whole way we worked in welfare, we're bringing social housing alongside of that as well. So that's when we understand who the people are better, we understand what kind of extra services they need over a longer period of time and we wrap more support around them. Now, that will happen whether or not the community housing provider owns the house or not. But in some cases, why shouldn't they?

CORIN Will people have choice? Will the tenants have a choice of who they go with? I mean, it's like a voucher, isn't it? They get their income-related subsidy or rent subsidy; can they choose between the Housing New Zealand provider and the community provider?

PAULA It will get to a point where they kind of can, when we've got provision up more. But at the moment, what happens is they will go to MSD, as they do, be assessed. MSD then put it out there that this is the family that are looking for a home in this area and these are the types of needs that they want. Now, because we haven't grown that community housing sector enough, we haven't quite got that sort of tension going on, but eventually it will happen, and that is so good for the person. At the moment, they don't get choice. But we intend to grow services to introduce more income-related rents and see more social housing so that there is choice for the tenant.

CORIN Would they be in a situation where they have to go with a particular community provider because that's all there is in an area?

PAULA At the moment–

CORIN Could that happen?

PAULA At the moment definitely. There's just not the choice. So at the moment, they get no choice, and it's all about the house. So if they are– they almost have to win lottery to be at the top of the list and get a vacant house that becomes– particularly in Auckland, and a vacant house become available. We want to change that. It shouldn't be about the house; it should be about the person, and we should be able to look at what is absolutely best for them as far as who the provider is.

CORIN So does the social provider – do they get to choose who their tenant is?

PAULA In some cases, yes.

CORIN So they could say no to somebody?

PAULA They could turn around and say, 'We're specialists in alcohol and drug rehabilitation. We only want to work with people– We only own a small number of houses. We can wrap better support around people that are coming out with those sorts of needs.’ You will have some that specialise in disability services. They will want to make sure that they look after just those who have disabilities and that they can provide extra services around.

CORIN Is this is a grand experiment, though? I mean, you're making it up as you go along a little bit, aren't you?

PAULA Not at all.

CORIN Because you haven't done before.

PAULA Well, we have, so we did it in the Wairarapa in the late 1990s, where we sold to the trust there. They bought all 500-and-something houses. They still have them. The homes are in a better condition than they were under us. I've also just spent a week in London and Scotland, and I saw what they did 30 years ago, where they're at now as far as their community housing sector, learnt a few lessons as to what we need to do.

CORIN Let me take you back to the Wairarapa, because you might have seen it, there was a case– one of the Wellington local newspapers raised the case of a man who went, I think it was, to that trust in Masterton, moved from Auckland from a state house into a community-backed house in Masterton, didn't get to keep his income-related subsidy that he got, and then the community provider concerned joined up with the government scheme. If he was to re-join, he would get it, but he can't. He's left out in the cold.

PAULA Yeah.

CORIN You're going to get people falling through the cracks.

PAULA Well, what you've got is an example of where we have not opened up the income-related rents to current tenants. Yeah, so it's for new tenants.

CORIN Why?

PAULA Because we can't afford it, and that's the truth of it, because it is a capped amount. And if I had opened up to everyone that's already there, I wouldn't be housing one extra person. And I have a wait list of people in extreme need, and I feel that they are my first priority. So if they are already in a home being subsidised in social housing through the accommodation supplement, I do not deny that they are not getting as much support as someone on the income-related rent, but I have a waiting list of people who are extremely vulnerable, and I'm putting them first.

CORIN You talk about that waiting list. How does this social housing reform programme actually increase the number of houses to meet that 5000-strong waiting list?

PAULA Well, community ownership’s only one part of it. The transfer of state houses is one small part of a huge social housing reform programme, so the rest of it is how we purchase extra income-related rent places. That might be by leasing. It might be from developers actually developing and then selling some to social houses or going into partnership with it.

CORIN Tell us about that, because people are concerned about this. Are you seriously talking about transferring houses, selling houses to private developers that would then be able to use them, sell them but build more for you?

PAULA No, we're not. No, not at all, and let's be really clear about that. We are talking about selling to community housing providers. What they might turn around and say is, 'We've got these six houses all next door to each other. If we went into partnership with a developer, those six homes could become 26,' yeah? Now, the developer might get six of them for actually putting in the investment in doing the building. They then might sell 10 of them on the private market at affordable and they might get 10 that they keep for community– for social housing. So that six has gone to 10 as far as social housing places, 10 extra homes on the market, and, yes, a developer's walked away with six. That is actually a win for the tenant as well as a win for everybody else.

CORIN But how much is that going to cost the taxpayer? Because you're going to be giving away quite a bit of capital gain, quite a bit of wealth.

PAULA Well, not necessarily. I mean, it is about how much are the homes worth as they currently stand and if someone else is taking the risk and doing all of the effort and the work to actually develop them. We will continue to do that through Housing New Zealand. In fact, we've made a commitment to ramp up the redevelopment through them, but equally getting community housing providers to do it is a good thing.

CORIN But you are involving for-profit organisations in the mix here. That's the difference, isn't it? At the moment, you've got the community providers, they’re non-profit organisations; they're not trying to make a profit. Whereas if you bring the property developers in, these guys want to make money. It changes the game.

PAULA Well, we won't be. It will be up to a community housing provider. We have a regulatory authority which will be making sure that any changes like that that do happen, that we make sure that it is with the tenants in mind and we're getting more places out of it or at least the same. But those community housing providers will also make a profit. That's not a bad thing. Those not-for-profits put the money back into people, and I saw that oversees when I was looking, and I think that it is a good thing.

CORIN Why will they build affordable houses, though? I think that's the problem with a lot of the special housing areas in Auckland, those sort of things. The developers aren't that keen on building affordable houses; they don't make that much money with them.

PAULA Because they’re going into partnership with community housing providers that will insist that they’re building affordable homes, and that is purely the nature of their charter and what they stand for.

CORIN And have you had expressions of interest from the likes of building companies? Are you getting signals that there are private property developers who want to do this?

PAULA That's not our business, so we are through Housing New Zealand, but certainly community housing providers are telling us that they’ve got others that are interested in going into this with them, so that is really a possibility that you could see redevelopment. Let's get clear here. We’re going to get vulnerable people getting a safer, drier, warmer home that suits their needs better. That is the outcome we are looking for at a fair price.

CORIN How many do you think you can get?

PAULA Well, we are committed to an extra 3000 over the next three years.

CORIN That’s above what we’ve currently got?

PAULA That is above what we're currently got.

CORIN So that’s still not going to make the 5000 waiting list, though, is it? You're still going to be short.

PAULA Oh, yeah, but that always moves along. It's actually already gone down again in the last count, and you'll see the numbers coming out that we'll be making public very shortly. You know, there are those that we need to do more in transitional housing. I've got a whole programme of work that’s going on for those that are homelessness– sorry, homeless. So this is just one part of a big programme of work.

CORIN What you say to the tenants who are out there who may be very worried? Because if you look at, say, some of your previous reform measures in Tamaki, there was a lot of upheaval, a lot of people were very upset about how the process was done, who may be dealing with a lot of uncertainty here and a lot of worry about their future. What you say to them?

PAULA Well, I say to them I make an absolute obligation that they will be no worse off, that, actually, we will be putting them in better quality homes. I–

CORIN But that sense of security, though, that they’re not going to get turfed out in a couple of years down the track, that they know they’re going to have some certainty?

PAULA Yeah. I introduce them to the 84-year-old that had been in a state house for decades and had been lately at the doctor every single week. We moved her in January this year. She went into one of these new developments, these new homes with a community housing provider. She hasn't been to the doctor since. And for her, it was about a sense of community, it was about the home being better suited to her health needs and being warmer. We can do better by them. The status quo is not good enough. We can do better by those vulnerable people that need our help.

CORIN But not the government, though? That's what you seem to be saying.

PAULA We have a role to play.

CORIN But you need the private sector?

PAULA Yeah.

CORIN That's the difference here?

PAULA Well, not the private sector

CORIN Like private prisons?

PAULA We need that community sector. We need the community sector.

CORIN Just in terms of the ideology of it, the rationale – is like private prisons? You need to bring in the private sector to lift the game of the public sector? Is that what we're talking about?

PAULA I think there will be parts of that, but for us, most of it is about community organisations that are on the ground that understand these people better than, actually, a government sitting in Wellington does. And I think that those that are– It is local services for local people and wrapping it round over a longer period of time. So, yes, we want to partner with community organisations. And if they choose to do a small bit of work with developers, then, no, I don't see that as being harmful. I, in fact, see everybody winning out of that.

CORIN How much of this policy now is– how much is your career staked in this policy being successful? I mean, you are talked about as a future leader of the National Party one day. I mean, this is a pretty crucial policy for you, a big policy for you to get across the line.

PAULA Yeah. This is not about me. Every day it’s about the people who I think I’m here to serve. So if I look back in 10, 15 years' time and I see kids that have made it through school because they grew up in healthy homes, if I see women that have got off welfare because they were actually in a home that suited them in an area that meant something, if they got longer support, if women got out of domestic violence incidences because there was more social housing for them, it's all I care about.

CORIN But you've also got, say, for example, Associate Finance. You’ve broadened your range of skills, haven't you?

PAULA Yeah.

CORIN I mean, is that about trying to show that you could be a prime minister one day?

PAULA I'm just so incredibly privileged, and I'm having a great time. I'm learning. It’s above my head. I’ve got the likes of Bill English teaching me. I am in State Services, which I'm really enjoying, that sort of mechanisms of government. I just love what I'm doing, and I feel incredibly privileged.

CORIN Correct me if I'm wrong, but you've got a decision on the Lochinver Farms as Associate Finance?

PAULA Yes, I do.

CORIN Can you give us any hint of where you’re going on that?

PAULA No, not at this stage. But there are some good gnarly issues out there, and we’re working our way through them.

CORIN Paula Bennett, thank you very much for your time.

PAULA Thank you.

CORIN Cheers