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28. HNZC owns approximately 66,000 properties and leases a further 3,500 from the private sector. The value of the portfolio is $15.1 billion. The housing stock is spread throughout the country, but is concentrated in Auckland and Northland (approximately 47 percent of the portfolio).

29. Currently, there are too few houses in high demand areas and many houses of the wrong size. There are also too many houses in most low demand areas. Forecasts confirm that demand will continue to grow in Auckland and reduce in the rest of the country, to varying extents. At present:

  • 50 percent of houses are in the right place, the right size and meet HNZC's quality standards
  • 25 percent of houses are the right type and in the right place but don't meet HNZC's standards
  • 16 percent of houses are in the right place but are not the right type and don't meet HNZC's standards, and
  • 9 percent of houses are not in the right place, the right type, and don't meet HNZC's standards.

30. HNZC has recently re-drafted its 10 year Asset Management Strategy (AMS). The goals of the AMS are to:

  • increase the rate of churn to at least 1 in 50 per annum (to renew the portfolio over time to reduce repair and maintenance costs and also improve alignment of the assets with need)
  • carry out the AMS within a ten year funds retention and reinvestment funding envelope (the AMS is funded using depreciation, revenues from the sale of property, write downs, existing Crown appropriations, and insurance proceeds from the Canterbury earthquake claim)
  • better align the location of the housing portfolio with regional demand
  • improve the match of asset types to applicant demand to 90 percent
  • reduce the concentration of state housing so that no community will have more than 15 percent state housing presence (high concentrations of state housing in some areas are associated with social deprivation and concentrations of low-income households in deprived areas are associated with poor social outcomes)
  • increase the number of assets where the Property Quality Index rating aligns to the Corporation's future intentions for the property, and
  • reduce the cost of building by up to 25 percent.

31. The AMS is a bold and ambitious plan. It focuses on improving the quality of HNZC's social housing portfolio and envisions that state housing will be part of healthy, sustainable, and mixed communities. Over time the AMS anticipates a slight decline in the overall size of HNZC's portfolio. The AMS was drafted ahead of progress being made on the SHRP.
[2]
HNZC is proceeding with the AMS but this is likely to need revising following further decisions as part of SHRP and the future of HNZC (refer below for more detail).

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