“We would argue that the market price is zero,” Piripi says, because “the outcomes will far outweigh the cost” and the state houses up for grabs are “already a very marginal operation”
Says Maori want to negotiate a deal nationally as a collective of iwi because they are the “best placed entities to do the business”
“And the best way to do it is to sponsor us into it by enabling us to utilise money we would normally have used to make a capital purchase to invest— reinvest in the sector.”
When asked if other community housing providers should also get state houses for free he says: “I can’t think of any other organisation that would invest in the same way that we would and have the same sort of commitment that we have.”
“We’re prepared to co-invest. We’re prepared to utilise our own assets, our own land, our own resources to continue to respond to housing needs.”
Acknowledges that taking over responsibility for providing housing is in the “too hard basket in many ways”, but iwi feel “obliged” to house their people.
“When the Salvation Army turned down an opportunity, then you know it’s possibly a lemon.”
Says iwi may seek low interest loans from Government, but their starting point is the houses have no value
Lisa Owen: Welcome back. National plans to transfer up to 2000 state houses to community providers this year, promising tenants they will get better services from new local owners. Some of those potential buyers are iwi and hapu. As the first homes go on the block in Tauranga and Invercargill, negotiations are already underway. But are iwi really lining up to buy as the government claims, and what do they want in return for taking over what used to be the state’s responsibility. Iwi leader Haami Piripi is with me. Tena koe.
Haami Piripi: Kia ora.
The Government does say that iwi groups are lining up to buy state houses, so are you eager investors?
Oh, we’re eager, but I don’t know about investors. Housing is a top priority for us. The child poverty report put out by the children’s commissioner some years identified housing as the single-most determinant factor in child poverty, and so we appreciate the important of housing — a warm, secure environment for our people to live in — and we know that a lot of our people currently live in substandard housing and struggle in the housing sector, so we’re really obliged to get involved and do the best we can to help our people into a housing situation.
You say obliged, so do you have reservations? Or you’re doing this because you have to rather than you want to?
I think there is definitely more that. Um, when the Salvation Army turned down an opportunity, then you know it’s possibly a lemon. But because so many people are Maori and Pacific Island, we really have an obligation, I think, to get in there and do the best we can to improve the system. We know that the government hasn’t done very well so far.
So you say it could be a lemon. How so? What worries you?
Well, um, it’s the very low end of the spectrum in terms of the government’s housing portfolio. In some ways, it’s the ‘too hard’ basket in many ways. Um, the tenancies, the buildings themselves, their location is all issues that are important determinants in terms of value. And iwi have been involved in housing for a long time ourselves, mainly in affordable housing, retirement housing, but we haven’t really been a big player in social housing. And I think the opportunity now for us to do that is good. But I think it’s important to note that social housing is a phenomena of a socio-economic paradigm –post-modern capitalism – and you get this social housing phenomena right around the world, and it exists in every city, in every economy, so there’s an obligation by the government.
So you’re worried, are you, about ending up with bad houses and challenging tenants?
Yes. Yes, and basically, if the market had to crash and the value of the houses went down, we’d make a significant loss. It’s already a very marginal operation, so we want to approach the issue nationally as a collective of iwi, set some benchmarks with government for transfer.
And I do want to talk about that, but we, The Nation, have talked to a few people in this sector, and they say that anyone taking this on must have rocks in their head.
Yes, and this is your people, and we have a lot to offer as well, our people. I think we can do a much better job, just even on the face of it. We have a strong commitment, we have resources we can bring to bear and should bring to bear to develop housing solutions for our people.
So you’ve identified, I suppose, some of the baggage associated with taking this on, so what kind of discount would you expect on these houses?
Well, as I said, the phenomena of social housing and socio-economic deprivation is such that there is an ongoing Government responsibility to work with it, to address it. So the Government can’t really abdicate its responsibility just by selling— it’s not just a few houses. There’s a whole decile that comes with these houses. There’s a whole socio-economic phenomenon that comes with them, and so that can’t be ignored. And I think in terms of addressing housing as a focus, there’s many opportunities for multiple outcomes through a housing focus, and so I think we can add tremendous value to other aspects of social service delivery, wraparound services, which we’re already very much involved in ourselves as iwi. So we can get some good cost efficiencies there.
So the actual houses, though, that the government wants to sell off, as it says, how much would you expect to pay for those houses? Market prices?
Well, we would argue that the market price is zero, because a) there’s an ongoing obligation by government to these families, and that obligation will continue anyway, in terms of its responsibilities, and b) the buildings themselves are the last bits of it—
So, hang on. The market price, you said, is zero. So are you saying, just to be clear, that if you take this on, iwi wants the houses for free?
That would be our starting point, because we’re taking on—
Free. Well, not so much free. It’s an investment on the part of the Government. So what we’re saying is that this is not an asset sale. This is an investment in the population, an investment in families, an investment in housing, and in order to make an investment as a government, you have to discount the price to make sure that that investment works, the formula that you put in place works. And for the formula to work for us, our beginning point is a zero valuation, because the outcomes will far outweigh the cost.
Again, cos people we’ve spoken to say that they think maybe 30% to 70% discount would be fair and reasonable. Why do you think zero free houses is the right price?
Cos we’re prepared to invest. We’re prepared to co-invest. We’re prepared to utilise our own assets, our own land, our own resources to continue to respond to housing needs. So we wouldn’t just stop there in the purchase of social housing. We would move that social housing into affordable housing with transition of people into home ownership. We would build new developments around social housing, something more innovation, perhaps.
But couldn’t you do that anyway? Couldn’t you build low-cost housing on your land anyway to encourage people into home ownership?
I don’t think so. No, I don’t think so because if we had to do that, it would be all back to the drawing board beginning at square one, where in this situation here, we have an existing portfolio, existing homes, some of which are already on Maori land, so they’ve all got varying factors around them. Some of them have first right of refusals, and iwi have got agreement in their Treaty settlements, so they’re all fairly unique. Each iwi in each area is fairly unique. It requires a unique formula.
Well, Bill English has said that state houses won’t be sold unless the taxpayer gets a fair and reasonable value. So do you think giving them away for free is fair value to the taxpayer?
Yes, I do, because what will happen then is that we would continue to invest in a sector. The government would be able to let us get on with it. It would have invested enough in the business to allow us to get on with it, and I think we’re the best people to do it. We’ve got a strong commitment. We have resources. We have wraparound services we can bring to bear, and there are people. So, yeah, I think they would definitely get value out of it.
But wouldn’t they have to offer everyone that deal, then — other community housing organisations. Wouldn’t they have to offer the houses to them for free as well, or do you think that this is a deal that should just apply to iwi?
Well, I can’t think of any other organisation that would invest in the same way that we would and have the same sort of commitment that we have. Because the Salvation Army’s the best example. Here you are, even the work of God, they’re baulking at because it is such a difficult situation to be in.
So iwi only, basically? Iwi-only deal?
I would say that iwi are the best placed entities to be able to do the business.
So does the Government know you want these houses for free?
They know we want the houses, and they know that we will sit down and negotiate with them, and part of our raison d’être, if you like, is the fact that we take a national approach, we solve the problem nationally, but we still have a diverse enough grouping of 65 iwi in our forum to be able to address it locally.
So you want a blanket deal negotiated for all iwi across the country to get these houses for free? That’s what you’re aiming for?
That’s one of the benchmarks, yeah. And that will then enable the individual iwi to be able to apply their own resources to the formula. And I guess, obviously, it’s a negotiation, it’s not a wish list, and the Government will have its perspective, and we will have our perspective. We think that if the Government regards this as an investment, not as an asset sale, and committed itself to the future of people who need housing solutions, then we are the partner for them. And the best way to do it is to sponsor us into it by enabling us to utilise money we would normally have used to make a capital purchase to invest— reinvest in the sector.
Briefly, because we’re running out of time, I just want to know, you’ve identified the fact that these houses, some of them need a lot of maintenance, you’re talking about investing your own money, but would you be looking to the government to give you low interest loans as well to work on this project?
It’s certainly an option, but our starting point is they have no value.
All right. Thank you very much for joining me this morning.
Transcript provided by Able. www.able.co.nz