Community Partnerships, Home-Buy, and Acquiring New Homes, Highlights Of HNZ’s YearHousing New Zealand Ltd
"Housing New Zealand has had a good year in meeting its social objectives but more work needs to be done," HNZ Minister, Tony Ryall, said today. The company made a profit of $117 million, but spent $125 million on building new homes and $89 million on maintenance.
Mr Ryall made the comments following the release of Housing New Zealand's Annual Report.
The Annual Report shows HNZ has been more successful than anticipated in getting low-income families off the welfare dependency treadmill and into home ownership through the Home-Buy scheme. 726 low-income New Zealand families bought their state house through the Home-Buy scheme, 32 percent more than expected in the 1998/99 financial year.
"The Home-Buy result is particularly pleasing because home ownership helps strengthen families and communities while being neutral in terms of availability of public housing," said Mr Ryall.
"HNZ is currently reviewing the Home-Buy scheme with a view to getting still more families into home ownership especially in the Auckland area.
"Labour-Alliance take the view that all state houses should remain controlled from Wellington and oppose Home-Buy on these ideological grounds.
"Another exciting initiative opposed by Labour-Alliance on ideological grounds is Community Partnerships.
"The Annual Report shows just under 1200 homes are now being managed by community groups under the Community Partnerships programme. Community groups are bringing innovation and understanding of local issues that bureaucrats in Wellington simply can not provide.
"Following the outstanding success of Community Partnerships in the Wairarapa, Wanganui and Cannons Creek, I have asked HNZ to pursue further partnerships for the next year.
"Progress has also been good on acquiring new homes in areas of high demand. HNZ invested $125 million last year in new houses and capital improvements.
"The Government has put in place a plan to build still more quality homes for low-incomes families in areas of highest demand. In February this year I announced a plan to acquire 1000 new homes in Auckland over the next two years. Just four months into the new financial year HNZ has already signed contracts to build 485 new homes in Auckland.
"Another pleasing aspect of HNZ's performance was in housing those families in most need. There were 612 Top Priority applicants and 1971 Priority applicants housed in the 98/99 financial year. The average waiting times were just 8.17 days for Top Priority and 12.89 days for Priority applicants.
"The Report shows HNZ made a profit of $117 million in the 1998/99 financial year, $5 million less than the previous year.
"Around $40 million of this profit was generated through operating surpluses. This equates to a return on shareholder funds of just 1.2 percent, well below the level of return that would be expected from a company run solely to generate profit. It is also below the 1.42 percent return expected in the company's Statement of Corporate Intent. Failure to meet this target is due in part to a significant reduction in rents charged by the company early in the 1998/99 year.
"$77 million in profit was generated from sales of out dated houses, houses in low demand areas, houses with exceptionally high capital values, Home-Buy sales, and sales of houses to Community Partners.
"During 1998/99 HNZ spent $89 million on the maintenance of its 60,100 properties.
"After inheriting a deferred maintenance bill from the last Labour government, HNZ was forced to spend half a billion dollars between 1994 and 1996 correcting Labour's neglect. This was in addition to its normal maintenance budget of around $100 million per year. Over the past five years HNZ has spent, on average, $13,000 on maintenance per home," said Mr Ryall.
The Government currently spends $860 million per annum on income related assistance for 310,000 families through the Accommodation Supplement.