History of State Housing

1905 – 1919: Early state housing

In 1905, Prime Minister Richard Seddon introduced the 'Workers’ Dwellings Act, leading to the construction of the first state rental houses for inner-city workers. His goal was to counter exploitative landlords and improve living standards. However, high rents meant few workers could afford them, and the programme ended in 1919.

1920s – 1930s: New suburbs and early housing growth

After World War I, demand for housing surged. The Railways Department set up a factory in Frankton, Hamilton, producing pre-cut houses that were built in suburbs such as Frankton and Moera, Lower Hutt. However, private companies soon proved more cost-effective, and the initiative was discontinued.

During the 1920s, lenient state lending policies allowed workers to borrow 95% of a home’s cost, fuelling suburban housing boom. The Great Depression of the 1930s halted much of this growth.

1935: The first Labour government expands public housing

Under Prime Minister Michael Joseph Savage, the first Labour Government prioritised state rental housing to provide stability for those affected by the Depression.

By 1939, over 5,000 state houses had been built. 400 different architectural designs ensured no two homes were identical.

1945 – 1960s: Post-World War II housing expansion

Following World War II, the government built 10,000 state houses per year. Entire suburbs were planned, including shops, amenities, and landscaped public spaces.

500 pre-cut houses were imported from Austria to address material shortages. The government also introduced a group building scheme, subsidising developers who constructed houses based on government designs. This led to the emergence of multi-unit buildings made from cheaper materials like fibrolite, which lacked privacy.

In the early 1950s, the National Government introduced policies to encourage state tenants to buy their homes and subsidised the construction industry to lower housing costs. This resulted in high-density state housing developments in areas such as South Auckland and Porirua, north of Wellington.

1970s – 2000s: Policy shifts and market reforms

In 1974, The Housing Corporation of New Zealand was formed, introducing inner-city housing projects and new housing types like cluster housing.

During the 1990s, The National Government sold state houses while restricting tenancy to welfare recipients, who were charged market rent (offset by accommodation subsidies).

In 1999, Labour reinstated income-related rents, capping tenants’ rent at 25% of their income.

In 2001, the Housing New Zealand Corporation was established as the latest iteration of New Zealand’s state housing agency.

2018 – 2019: Formation of Kāinga Ora

In 2018, the government created the Ministry of Housing and Urban Development (MHUD), consolidating housing policy responsibilities from the Ministry of Business, Innovation & Employment, The Treasury, and the Ministry of Social Development.

In 2019, Housing New Zealand Corporation, HLC, and Kiwibuild merged to form Kāinga Ora – Homes and Communities with expanded responsibilities: to:

• Manage the public housing portfolio
• Lead government urban development projects
• Provide homeownership support to first home buyers
• Deliver key government housing initiatives

2024 – 2025: Kāinga Ora priorities reset

Following the 2023 General Election, the National-led Government introduced a reset of Kāinga Ora to focus on:

• Revised eligibility criteria for state housing.
• Reducing antisocial behaviour among tenants.
• Slowing large-scale developments, shifting to public-private partnerships.
• Cost-cutting measures to improve financial sustainability.