'Hard choices': Social housing overhaul to hike rents for 84,000 households

Thousands of Kiwi families are set to face higher weekly costs, as the Government moves to end the era of "indefinite" social housing tenancies.

Housing Minister Chris Bishop and Social Development Minister Louise Upston announced a massive multi-year reform on Thursday. The plan focuses on narrowing the cost gap between those in state homes and those in the private market.

Bishop said the current system is "unfair" and "financially unsustainable," noting that some families get significantly more support simply because they were lucky enough to secure a social home.

"We want a system that supports people who need help, while also backing people to move forward where they can," Bishop said.

The three pillars of the overhaul

The Government’s strategy rests on three major shifts designed to change how social housing functions in Aotearoa:

1. A New Priority Test: The ‘housing needs’ assessment will move away from focusing purely on affordability. Instead, it will prioritise those with "severe and persistent barriers" to finding a private home, such as those with complex mental health or addiction needs.

2. Ending 'Forever Homes': The Government is exploring "defined tenancy durations." This means instead of staying in a state house for decades, tenants will be regularly reviewed to see if they can move into the private market.

3. The Rent Hike: Budget 2026 will increase the minimum Income-Related Rent (IRR) contribution from 25 percent to 30 percent of a tenant’s income.

What does this mean for tenants?

For the 84,000 households currently in social housing, the impact will be felt in the wallet. The rent hike, starting in April 2027, will cost households an average of $31 more per week.

Upston said the savings - estimated at $387.5 million - will be redirected to boost the Accommodation Supplement for private renters by up to $30 a week. However, the Government is also tightening the rules for Temporary Additional Support, reducing its maximum rate to ensure it remains "temporary."

"Social housing should be a pathway to independence... not a place where people get stuck," Upston added.

'Simply cruel'

The reaction from across the aisle was swift and stinging. Labour Party housing spokesperson Kieran McAnulty labelled the move a "cruel" attempt to balance the books on the backs of those already doing it tough.

"You do not help families into independence by making them poorer," McAnulty said, pointing out that 36,000 households with children and 27,000 disabled occupants will be worse off.

Green Party spokesperson Tamatha Paul agreed, calling the rent hike "simply cruel" during a cost-of-living crisis. 

Meanwhile, the ACT Party welcomed the changes, with spokesperson Cameron Luxton stating that moving toward defined tenancy durations would free up 6,000 places over a decade.

Image credit: Unsplash - Hayden Graham