Are we getting value from Housing NZ.

[Glenn]

It has been interesting reading the breafing papers for the new Minister of Housing.
This is the link for it. http://feeds.beehive.govt.nz/sites/a...g_combined.pdf

I note that HNZ owns and manages 68,000 rental properties.
This is 16% of the total rental market in NZ. the last census indicated that there is a total of 414,038 rental properties in NZ.

HNZ receives $550 million to operate and collects a further $350 million in rents. They also collect a further $290 million for capital works.

This means that the average cost to society for each HNZ rental is just on $270 per week.

I arrive at this figure by dividing $880 million by 68,000 to give the average annual rent and then dividing that figure by 48. Knowing how long it takes HNZ to clean up and re let their properties I suspect that 48 weeks rent per property might in fact be conservative. I have not found any figures for their occupancy rate.

When I compare the average weekly rent with my portfolio of just under 200 properties my average weekly rent is $245.

So I put to you readers we the public of NZ are not getting value for money from HNZ. Despite a historical advantage of having owned the vast bulk of their properties for over 50 years, access to cheaper finance than we can get, and special privaledges like rents from WINZ it still costs more to live in a HNZ house than a private one.
Their own information indicates that the state of maintenance on their portfolio is slipping also.

[Glenn]

Further revelations

I have been carrying on with my calculations.
With a few simple google searches I can see in June 2005 HNZ were claiming that they managed 65,000 tenancies compared with todays figure of 68,000.
This means they have increased their portfolio by around 1000 tenancies per year. One might assume that this would mean they have built a net increase of 1000 per year. However HNZ have been leasing houses off the private sector so in fact they might not have built or purchased 1000 new dwellings.
This last year they were allocated $290 million for capital works.
The private sector would regard purchase or significant upgrade of a property to be a capital expense.
At a 1000 dwelling increase per year at first glance this might mean they had spent $290,000 on each of the new dwellings.

I wonder what the truth of the matter is.
How many new dwellings have they actually purchased or built.
How much have they spent on each new dwelling.
How much of the $290 million actually got spent on new properties.

[muppet]

About $100m on management fees,
$100m on advisers fees,
and may have spent $90m on maintenance. Hahahahahahaha

Typical of most Government Departments.

[Dunning]

One point that might make your comparison figures askew is the type of rentals you have vs the type HNZ have. If you remove your rentals that are one, two bedroom, apartments etc, basically anything that isn't suitable for HNZ stock, does that put your average closer to HNZ?

DHB have the median rent at $310 for a 3 bedroom house NZ wide. Does this mean we are getting a good deal?

Interesting thinking though. Makes you wonder what they are doing with the capitals expense money.

[Libertas]

Government involvement in any market never works in the long run. All that money would be better spent on infrastructure (something the govt should stick to rather than social engineering). Basic economics suggests that an increase in the supply of available land for new housing and a freeing up of the regulation surrounding residential development is the best solution to give consumers the cheapest housing.

Many years of socialism in this country has proven that free markets (void of govt intervention) are the only way to provide the lowest, most competitive possible price for consumers. And that the alternative is a bloated govt, bureaucratic, inefficient and inflationary economy.

There isn't a lot John Key can do because middle NZ has grown dependent on state hand outs. The huge changes necessary will not be possible if National are to maintain power for longer than 3 years.

[67910241]

Basic economics suggests that an increase in the supply of available land for new housing and a freeing up of the regulation surrounding residential development is the best solution to give consumers the cheapest housing.

What's blatantly obvious is normally not what's easiest for the average voter to understand.

Having said that, let's not forget the fact that the outcome of cheaper housing goes against the financial interest of the fully vested, government subsidised middle NZ mortgage holders.

[roseneath_rat]

I believe that a large chunk of HNZ tenants are those who would be unable to secure housing in the private sector. So how about the "societal cost" of having say 10% of those tenants out on the street?

68,000 properties x 2.5 average occupants x 10% = an extra 17,000 living on the streets of NZ, presumably no longer making any contribution to society & probably creating a lot more cost in law enforcement. Still cheaper to put them in heavily subsidised housing than a fully subsidised prison.

[CJ]

I believe that a large chunk of HNZ tenants are those who would be unable to secure housing in the private sector.

ON a slightly different note: Who takes on the tenants that HousingNZ kicks out. I heard on the news that there was a few.

[Viking]

Question; If there was no HNZ what would happen. Nothing much, we would still have the same tenants and more landlords of various types. We would probably have built a better tenant structure with more appreciation of the results of being a bad tenant. That is beginning with the tenancy tribunal results on line making it tougher for bad tenants.
Same as happens in other countries that don't have Govt. based housing programs.