A block of 30 government-owned flats on Wellesley Road in Napier has sat empty for a year, and officials have yet to find a buyer willing to take them on as social housing, RNZ reports.

The property was bought from a private developer under the former Labour government, with settlement completed in July 2024. It was purchased through a scheme designed to keep affordable housing developments moving when market conditions threatened to sink them, with the flats always intended for social housing use. Responsibility for the property now sits with the Ministry for Cities, Environment, Regions and Transport (MCERT), which absorbed the former Ministry of Housing and Urban Development's functions.

MCERT has been trying to sell the flats to a community housing provider rather than tenant them directly. That effort has stalled. The ministry told RNZ a previous sale arrangement "did not proceed as expected," without elaborating on why the deal fell over or who the prospective buyer was.

Housing Minister Chris Bishop did not mince words about the situation. "I'm extremely frustrated," he said, adding he is "as annoyed about this as locals are." He told RNZ he has made his expectations of officials "extremely clear" — though he stopped short of setting a public deadline for resolution or specifying what consequences, if any, would follow further delay.

The vacancy is hard to square with demand in the city. More than 450 households are on Napier's social housing waitlist, according to figures cited in the RNZ report. Kāinga Ora's own website says it has made "significant progress" increasing state housing stock in Napier, describing it as an area "identified nationally where too many people have nowhere suitable to live" — language that sits awkwardly against 30 finished units standing vacant for twelve months.

RNZ asked MCERT directly why Kāinga Ora, the Crown agency that houses the bulk of the country's state tenants, couldn't simply take over the property and tenant it while a buyer is found. The answer points to a broader policy settle: Kāinga Ora is focused on renewing and maintaining its existing portfolio, not expanding it. The government has moved to constrain further Kāinga Ora development on financial sustainability grounds, and the agency's total housing stock — 75,814 properties as at 30 September 2024 — is not expected to grow from 2025 onward. Instead, ministers want community housing providers to carry the load of new social housing supply.

That policy architecture is the real story behind the empty flats. Kāinga Ora sat outside the frame here not because of a want of housing stock or willing tenants, but because taking on Wellesley Road would run against the government's deliberate strategy of holding the line on Crown-agency growth. MCERT's own figures show the agency had 89 properties in its "sales and lease expiry" column as of September 2024 — 75 pending sale, 14 lease expiries — suggesting divestment, not acquisition, is the prevailing direction of travel for state housing assets more broadly.

This is not the first time vacant Kāinga Ora-linked housing has drawn ministerial ire. Bishop put out a Beehive statement in January 2024 describing the number of newly built Kāinga Ora homes sitting empty nationwide as "completely unacceptable." The Wellesley Road case suggests that concern has not been fully resolved at the operational level, even as the government's structural answer — leaning on community housing providers rather than Kāinga Ora — has hardened into settled policy.

The friction sits between two positions ministers hold simultaneously: that Kāinga Ora's growth needs to be capped for balance-sheet reasons, and that vacant state-linked housing is unacceptable when waitlists run into the hundreds locally. Community housing providers are meant to be the release valve for that tension. When one won't or can't take on a specific property — as appears to be the case in Napier — there is no obvious fallback mechanism to get tenants into finished, empty homes quickly, short of ministerial pressure on officials to sort it out.

The government has separately flagged extra short-term homelessness response funding for Napier, alongside Tauranga, Whakatāne, New Plymouth, Waimakariri and Whanganui, according to HUD's published information. Whether any of that support intersects with the Wellesley Road flats specifically is not addressed in the current reporting.

For now, the property remains unsold and untenanted, MCERT is still searching for a community housing buyer, and Bishop's public frustration has not yet translated into a resolution. Whether pressure from the minister's office produces a sale, a change of approach, or an interim tenanting arrangement is something officials have yet to spell out.