One of the major current policy initiatives of the New Zealand government is the introduction of the quasi-market approach for the delivery of social housing under the Social Housing Reform Programme. The Social Housing Reform Programme seeks to increase the participation of third-party not-for-profit community housing providers in delivering social housing in competition with Housing New Zealand Corporation (Minister of Housing, 2012). What has become known as the ‘quasi-market’ approach in social policy is based
on the idea of creating competition and using market-based incentives. The rationale of this approach is that if prices are based more on supply and demand, then resource allocation will be more efficient. Applied to housing, the argument is that providers will respond to increased market demand for rental accommodation by increasing supply, and competition between providers will induce more responsiveness to the needs of tenants, which will lead to higher quality and more choice and better constrain rental costs (Le Grand and Bartlett, 1993).
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