6. Question No. 6—HousingNICOLA WILLIS (Deputy Leader—National) to the Minister of HousingQuestion No. 6—Housing6. NICOLA WILLIS (Deputy Leader—National) to the Minister of Housing: Is she confident Kāinga Ora is delivering value for money and what concerns if any have been raised with her about Kāinga Ora's approach to public expenditure?Hon Dr MEGAN WOODS (Minister of Housing): In reference to the first part of the question yes this Government is committed to addressing New Zealand's housing crisis and Kāinga Ora are key part of our booming Government-led house build programme. Kāinga Ora have delivered an extra 8000 warm dry public housing places since November 2017 and 6503 are brand new build homes. This Government is building more homes than any Government since the 1970s. In reference to the second part of the question the inevitable concerns from private developers have been raised now that under this Government Kāinga Ora is an active participant in the housing market—rather than just a bystander—through its land programme. However our Government does realise that simply leaving the market to provide affordable houses for New Zealanders is exactly the type of thinking that delivered us a housing crisis.Nicola Willis: Why did Kāinga Ora pay more than $70 million for Ferncliffe Farm in Tauranga out-competing as many as 10 other prospective buyers who were ready to build houses on that land?Hon Dr MEGAN WOODS: Because when we established the $2 billion fund for Kāinga Ora to go out and buy land it had very clear criteria around what needed to be there. Increasing their supply of affordable housing and social housing were a key part of it. And I do note that on 1 July one of those bidders for the land wrote to me telling me that the Ferncliffe Farm—the development of this precinct—would result in the creation of the most prestigious residential enclave in the Tauranga region and further went on to say that it was in no way suited to the development of affordable housing. So the reason why our Government paid $70 million for that land is because Tauranga has a housing crisis and it needs affordable houses and on this side of the House we stand on the side of people wanting to provide those not those standing for the most prestigious residential enclaves.Nicola Willis: Why should taxpayers have confidence that the Government agency which oversees KiwiBuild will get houses built on that land faster than a proven private developer would? Hon Dr MEGAN WOODS: I go back to the stats that I gave in the answer to the primary question: that as a Government since November 2017 we have delivered 6503 new build public houses. But where taxpayers can have some comfort is that we are a developer through Kāinga Ora that is committed to the provision of affordable and social housing. Other private developers who wanted to develop the land wanted to create the most prestigious residential enclave in Tauranga and informed us it was in no way suitable for social housing. Nicola Willis: Has she received complaints from major housing developers warning that Kāinga Ora's use of taxpayer funds to over-bid for land is stopping those developers from getting houses built and is she concerned the Government's use of taxpayer money is pumping up the price of land? Hon Dr MEGAN WOODS: In relation to this particular parcel of land there were two valuations as per our policy one of which was $68 million the other was a range between $72.2 million and $74.8 million. We paid $70.4 million so it was at the lower end of the valuations. We can say with absolute surety to private developers that we won't be competing with them to build the most prestigious residential enclaves in the country; we will be looking to build affordable and social housing. But I know that member is a member of a party that thought market participation in housing was flogging off social housing. We are one that thinks actual market participation is building houses.Nicola Willis: Why has Kāinga Ora spent more than $800 million on her Government's watch purchasing homes on the private market in direct competition with first-home buyers and does she think that's a good use of taxpayer money?Hon Dr MEGAN WOODS: We have been over this many times in this House around what the rate of buy-in by Kāinga Ora is. Under our Government it has been trending down. It is currently this year somewhere around 21 percent although I will need to check that number. I would put that against the buy-in rate from the private market of the previous National Government that got into the high 60 percent number. We represent something like less than 1 percent of all real estate transitions. That member should come up with some ideas of how it is we're going to solve the housing crisis rather than flirting around the edges like this. Brooke van Velden: How can she ensure that Kāinga Ora will always build more affordable homes than would have already been built to make up for bidding up the price of land?Hon Dr MEGAN WOODS: When Kāinga Ora comes to Ministers and to Cabinet with a business case for the purchase of land it has to have a break-down of what the plan for the building of houses through this fund will be. As a Government we will always require Kāinga Ora to set aside affordable and public housing as part of that mix. That is why there is a case for public intervention and what differentiates us from private developers who want to use similar or the same parcels of land in the case that has been brought up by the National Party to develop the most prestigious residential enclave in Tauranga.Nicola Willis: How can taxpayers be confident that Kāinga Ora is achieving value for the $2 billion Kāinga Ora land programme when documents released to me under the Official Information Act show Treasury has raised extensive concerns about the role of the programme including coordination decision making and consultation issues?Hon Grant Robertson: That's not unusual.Hon Dr MEGAN WOODS: As the Minister of Finance said that is not an unusual situation. But how taxpayers can have confidence is that we have in place a clear process around what needs to be in a business case when it is being considered what needs to be put in place and of course there is external scrutiny of these as well.