Kāinga Ora halts hundreds of housing developments, sells vacant land

State housing provider Kāinga Ora is halting hundreds of housing developments which would have delivered nearly 3500 homes, and selling a fifth of its vacant land.

The agency's chief executive Matt Crockett said on Thursday the "critical step" in its reset plan would see it write down up to $220 million.

Housing Minister Chris Bishop ordered Kāinga Ora to deliver a turnaround plan that would ensure financial sustainability.

The agency's plan will see it refocus as a landlord, rather than a developer, and the number of houses it owned would stabilise from 2026.

Crockett said Kāinga Ora reviewed more than 460 social housing projects to ensure it was getting the best value for money and supplying houses in the areas of greatest need.

It was decided 212 projects that would have delivered 3479 homes would not proceed because they did not stack up financially, or were in the wrong locations.

It would press on with 254 projects, building more than 1800 new homes.

Kāinga Ora would also sell about a fifth — 36 hectares — of vacant land because it was no longer needed.

The proceeds would be put towards new housing or debt, and the agency would hold on to the remaining land for possible future development.

"These reviews were essential to ensuring we only progress new housing projects that make commercial sense and that we sell land which is surplus to our requirements so we can get on a more financially sustainable footing,'' Crockett said.

"Our reviews have highlighted an abnormally high number of projects and land holdings that no longer make sense for Kāinga Ora if we want to get ourselves in a better financial position."

Crockett said the exact amount being written down would not be known until the end of year accounts are audited.

But it included $150 to $180 million of capital that was spent on housing projects that will not go ahead as originally planned, and $40 million for land that has fallen in value since Kāinga Ora purchased it.

Kāinga Ora could "largely absorb" the unbudgeted write-downs through operating efficiencies, a disciplined approach to spending, and reduced staff numbers, Crockett said.

The agency last month slashed 620 jobs, of which nearly 200 were vacant.

It would still exceed the annual budget for write-downs, Crockett said.

"We need to bite the bullet on this," Crockett said.

"There is often some short-term pain that comes with the resetting of past decisions, but it needs to be done."

rnz.co.nz