Auditor General says the Ministry of Housing and Urban Development needs to do better even though some positive things have been achieved

A state organisation set up five years ago to fix the housing crisis has made progress but needs to do its job better, according to the Controller and Auditor General, John Ryan. 

The target of his commentary is the main state agency for housing policy, Te Tūāpapa Kura Kāinga – the Ministry of Housing and Urban Development.

This ministry was set up in 2018 after an earlier savage review. 

That review came in a cabinet paper which described the housing system as "lacking clear leadership, coherence, and effective long-term stewardship."

Accompanying that report was a public outcry over people sleeping in cars, or being financially drained by paying high rents or mortgage costs, relative to their income. 

Five years later, the Ministry has been reviewed by the Auditor General to see what progress has been made and it has received a mixed scorecard.  

"It must continue to improve its understanding of the housing and urban development system's current and projected performance," Ryan wrote.

"It must regularly report on (progress) to the public and those responsible for influencing housing and urban development outcomes."

Ryan went on to call for better governance of the housing industry and better reporting on progress to improve it. 

His report mentions many problems afflicting housing. They include decreasing numbers of people who own their own home, more people waiting for public housing and many poorer quality homes.

The Auditor General's report was not street-level analysis of these problems. Instead, it looked at the bureaucratic structures set up to deal with them.

In official-speak, it said there should be better reporting on housing problems, and regular assessments of moves to improve them.

It was at pains to point out that housing and urban development are complex issues, with many public and private groups involved and a range of different permissions needed for things like land availability and resource consents.  

It said that meant that providing leadership to improve housing outcomes was not easy, and the Ministry did not have many direct levers to influence the housing system's performance.

In looking at how these challenges had been met, the Auditor General said there had been improvements with the Ministry working with multiple groups to develop shared objectives.    

This involved working with other affected state agencies such as the Ministry of Social Development, Kāinga Ora, Te Puni Kōkiri, and the Ministry for the Environment.

While this was already happening, the degree of coordination needed to improve.  

And the Auditor General said more needs to be done to improve the Ministry's own performance and governance. 

The Auditor General's analysis focused almost entirely on the Ministry's leadership of state institutions which deal with housing, rather then on the housing difficulties for ordinary New Zealanders. 

Kelvin Davidson of CoreLogic says he can't speak on how well state agencies perform. But he gives a rough idea of what the housing system is like for people at street level. 

"It's got better, house prices have fallen, incomes have gone up, but it started from such a stretched position that I have characterised housing as cheaper but not cheap," he says.

"There is still a housing affordability problem in New Zealand, and it is hard to see it getting much better in the short term," says Davidson.

"It looks like house prices have stopped falling, and incomes might go up a bit, but so might house prices, so those things might cancel each other out,"

Davidson says increasing the supply of houses in the long run might be a help, but that is not an easy thing to do. He adds the shortage of housing critical a few years ago has eased with a lot of home building going on, especially of town houses and apartments. But he adds there are more people living in each house on average.

"We have seen a building boom in the last three or four years past few years.   I won't say the housing shortage has fallen to zero, but it is definitely smaller than it was then."

He says in terms of a balance between supply and demand, the housing market now is about as good as it has ever been, but there is still a shortage of houses of some types in some areas.