Social housing rents to increase by $31 a week on average in 2027, accommodation supplement to increase

A multi-year reform to the country’s social housing system will increase rent for about 84,000 Kāinga Ora tenants, while putting the $375 million savings into pushing up the accommodation supplement for those in private rentals.

It is a move the Government hopes will encourage long term tenants to move out of social housing to make room for those in need on the wait list.

In addition, the maximum Temporary Additional Support rate will decrease, bringing in about $200m over the forecast period.

The change, which will be introduced at Budget 2026 next week, will increase the rent contribution which is currently 25% of a social housing tenant’s income up to 30% from April next year - that will be phased in. That will see 84,000 households’ rent increase by an average of $31 a week.

That is expected to save $387.5m over the Budget forecast period, and largely be redirected over to the Accommodation Supplement, which goes to people in private accommodation, which would increase by $10 to $30 a week.

'Unfair'

Housing Minister Chris Bishop described the current system as “unfair”, adding that similar households can get different support depending on if they are living in social housing or a private rental.

“This is a multi-year programme of reform, both at a policy and operational level, and at an equity level, a financial level,” he said.

Officials will also look into a second tranche of changes which could include tenancy duration limits with exemptions for ongoing need, a responsibilities framework, support to get more people into private housing and more regular eligibility assessments.

Asked if he had an amount of savings wanted from the second tranche, Bishop said it was “not actually about savings”.

“The second tranche is more about making the system fairer and about operationalising the different needs assessment and making sure we get social housing for those who need it the most.

“This is about fairness and equity for the system, and about making sure we can deliver a more effective, targeted system that promotes independence rather than traps people in social housing."

The Opposition came out swinging, Labour leader Chris Hipkins saying that “in the midst of a cost of living crisis, at a time when families are already having to choose between paying the rent, putting petrol in the car, and putting food on the table, this government is hiking the rents of our lowest income renters”.

Bishop said on average, social housing tenants on a main benefit have $105 more a week left after housing costs, than comparable private renters receiving the Accommodation Supplement.

“The system is also expensive and our stock is not being used efficiently. Over the past decade, total housing support spending has more than doubled to $5.5 billion, while the social housing waitlist has grown approximately six-fold.

Bishop said overall, he does want to get the cost down over time, “but my point around the $5.5b is that it is unsustainable in a financial sense, but we're not getting bang for buck out of what we spend in that money”.

'Transfer from low income renters to private sector landlords'

Hipkins described the changes as “a transfer from our lowest income renters to private sector landlords - the people who benefit from an increase in the accommodation supplement are private sector landlords”.

Social Development Minister Louise Upston said 30% of tenants had been in social housing for more than 10 years.

As part of the reforms, the Government will change the social housing assessment “to be more focused on severe and persistent barriers that people face when trying to access private housing, including supply issues, selection bias, and challenges such as mental health or addiction issues”.

“Affordability will remain relevant for social housing assessment. But if it’s the main challenge for people, then they are best supported through a subsidy (like the Accommodation Supplement) rather than a social house," Bishop said.