A block of 30 government-owned flats on Wellesley Road in Napier has stood empty for a year, and the government has not yet found an organisation willing to buy them and run them as social housing, RNZ reports.

The Labour government bought the property from a private developer, with the purchase completed in July 2024. It was part of a scheme designed to keep affordable housing projects moving forward when the market made them financially risky. The flats were always meant for social housing — homes rented at below-market rates to people on lower incomes. Responsibility now falls to the Ministry for Cities, Environment, Regions and Transport (MCERT), which took over housing functions from the former Ministry of Housing and Urban Development.

MCERT has been trying to sell the flats to a community housing provider — a non-government organisation that manages social housing — rather than manage them directly. That effort has stalled. MCERT told RNZ that a previous sale agreement "did not proceed as expected," but did not explain why the deal fell through or which organisation had been interested.

Housing Minister Chris Bishop was direct about his frustration. "I'm extremely frustrated," he said, adding he is "as annoyed about this as locals are." He told RNZ he has made his expectations clear to officials, though he has not set a public deadline for fixing the problem or said what consequences might follow if it drags on.

The vacant flats sit uncomfortably against actual housing need in the city. More than 450 households are on Napier's social housing waitlist. Kāinga Ora — the Crown agency that manages most of New Zealand's state houses — says on its own website that Napier is an area "identified nationally where too many people have nowhere suitable to live." Thirty finished flats sitting empty for a year cuts against that claim.

When RNZ asked why Kāinga Ora didn't simply take over the Wellesley Road property and rent it to tenants while a buyer is found, officials pointed to a deliberate policy choice. Kāinga Ora is focused on repairing and maintaining the homes it already owns, not growing its portfolio. The government has decided to hold Kāinga Ora's total stock at its current level — 75,814 properties as of 30 September 2024 — and not expand it from 2025 onward, on the grounds of financial sustainability. The plan is for community housing providers to carry the responsibility for new social housing instead.

That policy choice is the heart of the problem. Kāinga Ora is not standing aside because there are no tenants or no spare capacity. It is standing aside because taking on Wellesley Road would conflict with the government's strategy of keeping Crown-agency growth flat. MCERT's own records show the agency had 89 properties listed for sale or lease expiry as of September 2024 — meaning the government is focused on selling off or closing state housing assets, not acquiring new ones.

This is not the first time empty state-linked housing has prompted ministerial anger. In January 2024, Bishop released a statement calling the number of newly built Kāinga Ora homes standing vacant nationwide "completely unacceptable." The Napier case suggests that concern has not been resolved in practice, even as the government's structural answer — relying on community housing providers instead of Kāinga Ora — has become firmer policy.

There is a tension at play here. Ministers say Kāinga Ora's growth must be capped for balance-sheet reasons, and they say vacant state-linked housing is unacceptable when waiting lists run to hundreds of people locally. Community housing providers are supposed to solve that tension by taking on new properties. But when a provider will not or cannot take on a specific block — as seems to be the case in Napier — the system has no clear backup plan to get people into finished, empty homes quickly, beyond officials responding to ministerial pressure to find a way.

The government has also pledged extra short-term homelessness support funding for Napier, along with Tauranga, Whakatāne, New Plymouth, Waimakariri and Whanganui, according to published information. How or whether that funding connects to the Wellesley Road flats has not been explained in reporting so far.

For now, the property remains empty and unsold. MCERT is still looking for a community housing buyer. Bishop's public frustration has not yet led to a fix. Officials have not said whether ministerial pressure will produce a sale, a change in approach, or a temporary arrangement to get tenants into the homes.