MSD Housing Assistance Reform Feeback Group (HARFG) – release of two papers

Feb 26, 2015 | Submissions

The Housing Assistance Reform Feedback Group (HARFG) met in Wellington on 26 February.
The items discussed at yesterday’s meeting of the HARFG included:

  1. MSD IRRS Purchasing Intentions
  2. Emergency Housing Funding Review
  3. Housing Restructuring and Tenancy Matters Act
  4. Social Housing Valuation/Investment approach
  5. Social Housing Transition Package

On the first two items, MSD has agreed that we can make publicly available the papers utilised in today’s discussions. CHA invites your questions, comments, and any suggestions you have for us to feedback to MSD.

MSD IRRS Purchasing intentions – a first step towards the IRRS Purchasing Strategy

The group considered a paper on the Ministry of Social Development’s (MSD) preliminary views on its intentions to purchase Income Related Rent Subsidy (IRRS) places, now that MSD has the social housing purchasing role.
HARFG members were asked what information MSD could provide to community housing providers to assist them to make investment decisions and help with business planning.

Summary of points raised:

  • The sector wants clarity on how IRRS works, including the cap ­ HARFG felt that on face value it appears that on one hand Government is saying it wants to increase places, but on the other hand IRRS is capped. This sends a mixed message if growth is the Government’s intended outcome. MSD confirmed that the extra 3,000 IRRS places announced by the Prime Minister in the State of the Nation speech on 28 January were built into the funding cap and that growth in the number of IRRS places (in the right areas for the right amount of time for the right people) is the intended outcome.
  • The true costs of providing housing and wraparound supports are not visible ­ the current total cost of providing places by providers is high. IRRS does not cover wraparound services or other intensive tenancy management costs. The cost to serve different clients, especially high need clients, can vary considerably (which is not fully captured using a unit fee per client basis). Providing flexibility on how IRRS can be used will be very useful. MSD confirmed that this is one of the issues being addressed in the HRTMA review.
  • The sector wants opportunities to work together ­ transferring clients between providers across regions (especially providers outside of demand areas) is something providers are interested in discussing further. Providers want to be able to work together and it will be important that partnerships can be accommodated in the contracting and funding model. This will become even more important as the sector becomes more diverse over time. MSD confirmed that it will work with operations to ensure that contractual arrangements do not inadvertently prevent partnerships from being formed.
  • An increasingly commercial focus could make community providers more risk averse ­ a concern was raised that increasing the commercial focus and encouraging a competitive environment might make providers more risk averse. In other words, it may create an environment where wraparound services and community development become less viable, moving the market in the wrong direction with providers switching to just delivering housing. Members suggested that the RFP process signalled in Auckland to provide the additional 300 places include criteria around experience in moving clients through the housing continuum, and / or track record on community development, for example, to ensure that market does not move in this direction.

Today’s discussion broadly endorsed this first step – an outline of the purchasing framework, what it includes, and how it will progress. We applauded MSD’s approach that this should go through many versions, with each one informed by new information and practices learned since the last one.

MSD is seeking feedback from the community housing sector on a paper that outlines the proposed approach to the preliminary information release [found here: HARFG Paper on Purchasing Intentions (PDF 483KB)]. In particular, MSD wants to know what specific information you need to make investment decisions. Your comments will help shape MSD’s approach. Please provide you feedback to director@communityhousing.org.nz by 13/3/15.
MSD intends to release its purchasing intentions publicly in April 2015.

Emergency Housing Funding Review

A presentation ­[found here: MSD Emergency Housing Funding Presentation (PDF 1419KB)], was delivered by Jon Saunders (contact: jon.saunders004@msd.govt.nz) at the NZ Coalition to End Homelessness conference yesterday 26 February in Wellington, with the same points delivered to the HARFG alongside the discussion paper on its draft terms of reference ­- Draft Terms of Reference for Emergency Housing Review (PDF 2639KB).

The HARFG broadly endorsed the terms of reference today, and we understand they will be reviewed by ministers with this feedback and confirmed over the next few weeks. The main discussion was whether the two phase approach was necessary given the short timeframe (recommendations needed by July). We applaud MSD for fronting this and taking action. Please let us know what messages you would want CHA to be putting forward.

Items 3­-5 do not yet have ministerial clearance; we thank MSD for agreeing that we can be more open in letting the sector know that we are engaged in conversations on these topics.

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