annual report B.13

Transcription

1 annual report B.13

2 Key achievements include: Meeting the return on equity target and exceeding dividend expectations Generating efficiency savings of $28 million, well above the target of $20 million Housing A priority applicants within an average of 10 days and B priority applicants within an average of 13 days Assisting 7,028 applicants into state rentals, of which 94 percent had a priority need (designated as A or B priority) Providing an income-related rent to 60,144 households Providing 16,553 people with advice about their housing options Owning and/or leasing 1,580 Community Group Housing properties, of which 1,503 are rented to 274 community organisations Freeing up 312 properties through a continued focus on identifying and investigating instances of fraud Delivering 9,242 upgrade interventions to improve the condition of properties Continuing the rebuild of Christchurch, including completing 1,890 urgent health and safety repairs during / Approving the first two stages of the Canterbury Investment Plan to accelerate the repair of 212 damaged properties and work with the private sector to demolish 126 properties and rebuild up to 350 Corporation properties Assessing 633 buildings across the country for earthquake risk Offering the Welcome Home Loan scheme to prospective home buyers, with 1,358 loans issued, and providing the Welcome Home First Steps course to 2,088 customers Administering the KiwiSaver deposit subsidy, with 2,820 subsidies paid out Selling 25 state rentals to tenants Improving alignment of the state rental portfolio so properties are located in areas of demand (from 81 percent in 2010/ to 83 percent in /)

3 Contents B.13 Foreword: Board Chair 2 Chief Executive s Overview 4 Page PART ONE: Medium-term information 6 The Operating Environment 7 The Corporation s Strategic Direction 8 Contribution to Outcomes 9 Housing New Zealand s Overarching Outcome 10 Impact Statement 1: New Zealanders who request state housing are well informed of their housing choices, and those in greatest need have access to a state house for the duration of that need 13 Impact Statement 2: The state housing portfolio is reconfigured to align with demand, and the number of houses that are fit for purpose is increased 19 Objective 1: The Corporation optimises its return to the Crown by managing its resources effectively and efficiently 28 Objective 2: The Corporation delivers programmes on behalf of the Crown effectively and efficiently 31 Organisational Health and Capability 33 Corporate Governance 35 Part Two: Annual information 37 Output Class 1: Advisory Services 39 Output Class 2: State House Tenancies 40 Output Class 3: Financial Assistance Housing 44 Output Class 4: Property Management Agency Services 46 Financial Statements Housing New Zealand Corporation 50 Financial Statements Housing Agency Account 112 housing new zealand corporation annual report - 1

4 Foreword: Board Chair / represents a significant year for the Corporation. It is the first full year of operating under new expectations by sharpening its focus on its core role ensuring those most in need have access to the right property, in the right place, and at the right time, for as long as that need exists. The Corporation s progress and achievements need to be seen against the backdrop of a range of significant challenges it has faced throughout the year: further reforms in the social housing sector, the continued need for fiscal constraint, the ongoing response to the Canterbury earthquakes, and embedding major changes to the way the Corporation delivers services to its customers and stakeholders. To ensure New Zealand is able to meet the challenges presented by these broader changes, the Government s vision is to have a diverse range of affordable social housing offered by providers from across the public, private and non-government sectors, and iwi. The Social Housing Reform Programme, led by the Ministry of Business, Innovation and Employment, supports the achievement of this vision. The Corporation has continued to play a role in supporting this programme of work and will, over time, become one of many providers that make up the country s social housing sector, with a focus on housing those in high need. As part of this reform, the Corporation has focused on its core role of tenancy and asset management. However, this is just the beginning of the journey and as the broader sector grows there will be lessons learned that will need to be incorporated into future strategies and performance expectations for the Corporation. The Corporation has also embarked on a programme to reconfigure its state rental portfolio over the next 10 years, to ensure housing is available where the need is greatest, both now and in the future, such as in urban areas like Auckland. This has included 758 additions and divestments across the country, and upgrading more than 9,000 properties. Like many other government agencies, the Corporation has continued to play a major role in the Canterbury earthquake recovery work. Around 97 percent of the Corporation s 6,000 state rentals in Christchurch sustained damage in the earthquakes, and we are now turning our attention to rebuilding. The Board approved the first two stages of a four-stage Canterbury Investment Plan during the year. The plan demonstrates a commitment to early and visible action in Canterbury and will see the fast-tracked repair of more than 200 damaged properties, followed by an 18-month redevelopment programme that will involve the Corporation working in partnership with the private sector. At the same time as providing housing to those in high need, the Corporation has a responsibility to manage its $15.1 billion portfolio to provide both a social and commercial return on the Crown s investment. This financial year the Corporation generated a return on equity of 1.7 percent. The leadership team has put in long hours and significant effort to deliver the programmes which will result in an operating dividend of $77 million. 2 housing new zealand corporation annual report -

5 This result is in part due to the Corporation s efforts to achieve greater efficiencies in the way it operates and delivers its services. This year saw the Corporation begin implementing transformational change across the organisation. The Board expects the benefits of these changes will be seen for many years to come. Like many other government agencies, the Corporation has continued to play a major role in the Canterbury earthquake recovery work. Around 97 percent of the Corporation s 6,000 state rentals in Christchurch sustained damage in the earthquakes, and we are now turning our attention to rebuilding. Finally, I would like to acknowledge the significant contribution Lesley McTurk has made over the last 6 years as Chief Executive of the Corporation and the platform which she has created to build on going forward. Dr Alan Jackson CHAIR housing new zealand corporation annual report - 3

6 Chief Executive s Overview This year has been one of transformational change for the Corporation, with the introduction of a new operating model designed to improve efficiencies, financial benefits, and customer service. The new model impacts on every aspect of the Corporation s business and includes an enhanced Customer Services Centre as the first point of contact for customers, new specialist teams for back office tenancy management tasks, and world-class technology supporting our customer and asset management systems. Implementing change at such a transformational level has been a major and complex piece of work that has required substantial organisational effort. I would like to thank the Corporation s staff for their commitment to making it happen. These changes will bed in over the next few months. Given the level of change, it is particularly heartening to see that customer satisfaction with tenancy management service levels increased by five percentage points on the previous year, to 74 percent. Through our Customer Services Centre, our customers can now expect to have a far greater range of enquiries answered on the spot. This has had the flow-on effect of freeing up our tenancy managers, so that eventually they will be able to spend 70 percent of their time in neighbourhoods carrying out their core role of tenancy management. Underpinning many of the changes is the introduction of new technology that, for example, enables us to better manage information about our properties. This improves long-term asset planning and increases operating efficiencies through more effective procurement spending and reduced financial management costs. A key driver for the new operating model is the Corporation s need to meet the requirements of a changing socio-economic environment. The Government s programme of reform for the social housing sector means that the Corporation will be one of many social housing providers, with a specific focus on ensuring that state rentals are for those in high need. In line with this new direction, the Corporation implemented new eligibility criteria for state rental applicants during the year. Under the new criteria, only new applicants with high-priority needs are eligible for state rentals, with moderate and low-priority applicants no longer being placed on the waiting list. As a result of these changes, 94 percent of the 7,028 households that were housed during the year were A or B priority, compared with 88 percent last year. The Corporation also implemented reviewable tenancies for new tenants from 1 July, to ensure state rentals are occupied only as long as tenants need them. Reviewing tenants need on a regular basis supports tenants to achieve housing independence while also freeing up state rentals for those in high need. As a landlord, the Corporation expects its tenants to be able to sustain their tenancies and not behave in ways that adversely affect the lives of those living and working in the immediate and wider neighbourhood. The Encouraging Good Neighbour Behaviour policy outlines the Corporation s approach to dealing with situations where tenants display anti-social behaviour. In November, the Corporation introduced the Suspensions policy, which works hand in hand with the Encouraging Good Neighbour Behaviour policy. The policy means that tenants who allow serious anti-social behaviour at their property or who commit a serious breach of their tenancy obligations (including fraud) may have their eligibility for a state rental suspended for up to one year. As at 30 June, 31 tenants have been suspended and further cases are being considered for suspension. In the majority of cases, tenants were suspended due to fraud. A major focus for the year has also been the rebuild in Christchurch after the Canterbury earthquakes. 4 housing new zealand corporation annual report -

7 There is an ongoing need for housing in Christchurch and the Corporation has had to progress quickly with a recovery plan. Since the September 2010 earthquake, 27,000 urgent health and safety repairs have been carried out at more than 5,000 Canterbury properties. Rebuilding state rentals in Christchurch has provided the Corporation with an opportunity to put the wider goals of its Asset Management Strategy into practice. The Corporation s housing portfolio of approximately 69,500 properties, with an estimated value of $15.1 billion, is a large Crown asset that must be managed effectively and efficiently to make the greatest difference possible, in a way that New Zealand can afford. Aligning the portfolio to meet demand and the market is a key part of the Asset Management Strategy, and taking a regional approach will lead to improved decision making and more effective interventions. In the time I have been with the Corporation, I have been consistently impressed by the commitment and dedication of our staff to ensuring that those in highest need are able to access housing. In October, I will be leaving the Corporation, after 6 years as Chief Executive. In the time I have been with the Corporation, I have been consistently impressed by the commitment and dedication of our staff to ensuring that those in highest need are able to access housing. The work of the Corporation s staff makes a tangible difference to the lives of some of the most vulnerable people in New Zealand, and I would like to acknowledge this. I would also like to express my thanks for the strong leadership and governance provided by Alan Jackson, previous Board Chair Pat Snedden, and the Board. I know the Corporation is in a strong position to take on the challenges of the future. Dr Lesley McTurk CHIEF EXECUTIVE housing new zealand corporation annual report - 5

8 PART ONE Medium-term information1page The Operating Environment 7 The Corporation s Strategic Direction 8 Contribution to Outcomes 9 Housing New Zealand s Overarching Outcome 10 Impact Statement 1: New Zealanders who request state housing are well informed of their housing choices, and those in greatest need have access to a state house for the duration of that need 13 Impact Statement 2: The state housing portfolio is reconfigured to align with demand, and the number of houses that are fit for purpose is increased 19 Objective 1: The Corporation optimises its return to the Crown by managing its resources effectively and efficiently 28 Objective 2: The Corporation delivers programmes on behalf of the Crown effectively and efficiently 31 Organisational Health and Capability 33 Corporate Governance 35 6 housing new zealand corporation annual report -

9 The Operating Environment Medium-term Information The fiscal environment in New Zealand remains constrained and the country continues to address challenges such as the rebuilding of Christchurch. These challenges impact on the social housing market and on the Corporation, which provides housing services to assist those in high need for the duration of their need. Rebuilding in Christchurch after the Canterbury earthquakes Housing demand in Christchurch has changed since the Canterbury earthquakes, with properties destroyed and people moving out of the city. There is a current shortage of rental housing in particular areas of Christchurch and properties in the lower quartile rent range. The Corporation has continued its work to rebuild in Christchurch following the Canterbury earthquakes. Because of the ongoing need for housing in Christchurch, the Corporation has had to progress quickly with a recovery plan. The Corporation has approved the first two stages of a Canterbury Investment Plan that will accelerate the repair of hundreds of its damaged properties and work in partnership with the private sector to demolish 126 properties and rebuild up to 350 new Corporation properties. Social housing sector reform The Government has embarked on significant reforms in the public sector, including reform of the welfare system and the social housing sector. The Government s Social Housing Reform Programme will increase investment in social housing by facilitating and supporting a range of self-sustaining social housing providers to increase the total social housing supply. The Government has asked several agencies to work together to realise this vision. For example, the Ministry of Business, Innovation and Employment s Building and Housing group has the lead role for the Social Housing Reform Programme and for providing the Government with policy advice for the housing sector. The Ministry s Social Housing Unit is responsible for managing the Social Housing Investment Fund and leading the growth of social housing providers. The Corporation will remain the most significant provider of social housing in the medium term, and will over time become one of many social housing providers and agencies that make up a diverse and integrated social housing sector. Challenges facing the Corporation In meeting the demand for its services in an environment of fiscal restraint, the Corporation has faced a number of challenges, including: responding to demand for rental assistance, particularly from people with high and complex needs, which is likely to grow in the long term within a tight housing market ensuring state rentals are tenanted by those most in need providing tenancy management services and ensuring that processes are in place for tenants to access social support services to help address their needs beyond housing that may impact on the sustainability of their tenancy needing to reconfigure and optimise the distribution, concentration, and standard of the state rental portfolio to align with future demand responding to the need to repair and redevelop state rentals following the Canterbury earthquakes maintaining a balance between housing those most in need, reconfiguring the portfolio, and delivering an acceptable return to the Crown contributing to initiatives led by other agencies as part of the Social Housing Reform Programme aimed at growing the social housing sector, while maintaining enough capital to reconfigure the portfolio and provide more properties in areas of high demand such as Auckland. housing new zealand corporation annual report - 7

10 The Corporation s Strategic Direction Role and functions The Corporation s role The Housing Corporation Act 1974 sets out the Corporation s functions to provide housing and housing-related services to support the Crown s social objectives. The Corporation s role is to give effect to the Crown s social objectives by providing housing, and services related to housing, in a business-like manner. The Corporation achieves this by focusing on consistently delivering its core business of tenancy management and asset management. The Corporation rents properties to people whose circumstances mean that other forms of tenure are not affordable, adequate, suitable, accessible, or sustainable. In particular, the Corporation: manages tenancies manages the state rental portfolio through acquisitions, upgrades, maintenance, and divestments assesses state housing need and allocates tenancies on the basis of that need manages demand from those with high housing needs (the waiting list) matches tenants to appropriate state rentals administers the income-related rent subsidy ensures state rentals are tenanted by those in high need. Governance The primary relationship between the Government and the Corporation is between the Minister of Housing and Minister of Finance, and the Corporation s Board. The Corporation has the following responsible Ministers: Crown social objectives The Government s vision for the social housing sector is to provide housing assistance to those most in need, for as long as the need exists, and to deliver these outcomes in the most cost-effective way. The Government s social objectives for the Corporation for / were to: assist low-income and/or vulnerable individuals and families, who request state assistance, to make the right housing choices, and work with other agencies to transition existing state rental tenants whose circumstances have improved into alternative housing provide cost-effective state housing and associated services (as agreed by Ministers) to those most in need, for the duration of their need. Focus for the Corporation The Corporation revised its Outcomes Framework for to ensure its strategic direction aligned with Government expectations for the housing sector, social housing, and the role of the Corporation as signalled in the annual Letter of Expectations. The reform of the social housing sector has meant the Corporation has changed its focus to fulfil its role within the sector. The Corporation s focus is on tenancy and asset management; providing state rentals for those in high need, for the duration of their need; and improving the efficiency and effectiveness of its operations. The Corporation has embarked on a programme to significantly reconfigure its state rental portfolio over at least the next 10 years to ensure it makes the best use of state rentals, locating them in areas where need is greatest, both now and in the future. Minister of Housing Hon Phil Heatley Minister of Finance Hon Bill English The Canterbury earthquakes have created a particular challenge and supporting the rebuild and recovery efforts in Canterbury is a priority for the Corporation. There are more than 6,000 state rentals in Christchurch, of which 97 percent have sustained damage, including approximately 550 with significant structural damage. 8 housing new zealand corporation annual report -

11 Contribution to outcomes Medium-term Information The overarching outcome is delivered through the Corporation s impact statements and objectives and shows how the Corporation contributes to wider sector outcomes and Government priorities. Overarching Outcome New Zealanders in need have access to the right house, in the right place and at the right time, for as long as that need exists. The Corporation s impact statements show how it has focused its operations to contribute towards its overarching outcome. Impact Statement 1 New Zealanders who request state housing are well informed of their housing choices, and those in greatest need have access to a state house for the duration of that need. Impact Statement 2 The state housing portfolio is reconfigured to align with demand, and the number of houses that are fit for purpose is increased. The Corporation s objectives also contribute towards achieving its overarching outcome and impacts. Objective 1 The Corporation optimises its return to the Crown by managing its resources effectively and efficiently. Objective 2 The Corporation delivers programmes on behalf of the Crown effectively and efficiently. housing new zealand corporation annual report - 9

12 Housing New Zealand s Overarching Outcome New Zealanders in need have access to the right house, in the right place and at the right time, for as long as that need exists The Corporation is one of a number of agencies contributing towards the achievement of outcomes for the social housing sector. In its role of housing those in high need, the Corporation contributes to achieving the following shared sector outcome: A market that delivers a range of houses and buildings at prices and standards that are accessible to all New Zealanders. Progress made during / Safe, comfortable, and stable housing is important for social cohesion, family stability and individual wellbeing. International and national research has shown social housing contributes to tenants health and wellbeing. The benefits for tenants include reduced stress, an increased feeling of safety, improved educational performance of children, and more money to buy better food. A University of Otago study 1 investigating the relationship between housing conditions and hospitalisation rates showed that placement in state housing is associated with highly significant reductions in hospitalisations for most causes, and that hospitalisation rates decline markedly for tenants who have lived in a state rental for more than 1 year. Providing suitable state rentals for households with high housing needs is a significant step towards improving their circumstances. Surveys conducted by the Corporation show that 85 percent of tenants feel more in control of their lives since living in a state rental and half of those tenants indicate that they think they might one day own their own home. The Corporation has demonstrated progress toward achieving this outcome by: housing those in high need for as long as their need exists effectively managing the waiting list for state rentals reconfiguring the portfolio to ensure that the location, configuration, and condition of its properties are better aligned with high need providing advice and information to customers in need to support them to make the right housing choices. The Corporation s progress towards achieving this overarching outcome is demonstrated through performance against its impacts and objectives and through the following performance measures. Key Performance Indicators /12 target /12 actual The percentage of the portfolio occupied by tenants who have high and complex housing needs increases The variance between the supply of state rental properties and demand from high needs applicants reduces New measure for /12 baseline to be established using /12 result New measure for /12 baseline to be established using /12 result 57.1% Reduction of 39% Return on equity 1.5% 1.7% 2 1 Baker, M and Zhang, J. The Health Effects of Social Housing: Results of the Social Housing Outcomes Worth (SHOW) Study. Wellington: He Kainga Oranga: Housing and Health Research Programme, University of Otago, June. 2 The financial impact of the Canterbury earthquakes has been excluded. 10 housing new zealand corporation annual report -

13 Medium-term Information Performance explanation The percentage of the portfolio occupied by tenants who have high and complex housing needs increases The Corporation s role is to ensure that households in high housing need have access to state rental properties for the duration of their need. During the time they are in a state rental, a tenant s needs and circumstances can improve from the time of their initial needs assessment. The intention of this indicator was to report on the current level of need of those occupying state rentals. On 1 July, the Corporation introduced reviewable tenancies for all new tenants. This will allow it to periodically re-assess tenants ongoing need for a state rental property and better understand its tenants current circumstances and level of need. These reviews will occur after 3 years or earlier if a change of circumstances occurs. Legislative changes are necessary so the Corporation can review tenants ongoing need under the Social Allocation System framework. As a proxy, results for this indicator have been calculated using the Corporation s customer segmentation criteria to assess tenant need. It is a proxy because it is based on information taken at the time of the initial needs assessment. Customer segments are found by taking information that comes out of tenants needs assessments to identify more detailed need profiles that take into account factors such as disability, addiction and discrimination. Tenants are then classified into one of the following segments: Complex, Circumstantial, Financial, or External Factors, which refers to the need profile of the tenant. The measure result is the percentage of customers who are classified as having a Complex need. This information has been gathered from needs assessments data over the last twelve years, since the Social Allocation System was introduced. As a result, tenants circumstances may have changed over the time they have occupied state rentals. The intention of this approach was that this indicator be used as a proxy until the Corporation could truly measure current levels of need through tenancy reviews. Customer segment Segment dimensions (summary) Percentage Complex needs Circumstantial Financial only Adequacy, permanent medical needs, permanent change of circumstances, social functioning needs, disability Crowding, change of circumstances, insecure tenure, unexpected change, limited social skills, medical needs, personal needs, some mobility limitations, requires access to some services or facilities Affordability, financial needs, financial management needs, start up costs, insecure tenure temporary 57.1% 7.9% 0.5% External Availability of private sector alternatives, discrimination 2.0% Not classified Tenants who commenced their tenancies prior to the introduction of the Social Allocation System in December 2000 and have not undergone a needs assessment 32.5% The variance between the supply of state rental properties and demand from high need applicants reduces This measure is expressed as the net percentage increase or decrease in the A and B waiting list. The Corporation is working to reconfigure its portfolio to ensure more of its properties are in the right places. This, combined with effective tenancy management initiatives, is likely to contribute to a reduction in the variance between supply and demand as an adequate supply of appropriate properties means more high need applicants can be moved off the waiting list and placed into Corporation properties suited to their needs. Over /, the Corporation s A and B waiting list reduced by 39 percent from 3,754 to 2,285 applicants. Since December, applicant demand has begun to rise again. housing new zealand corporation annual report - 11

14 Housing New Zealand s Overarching Outcome continued Changes in demand have affected some performance measures that are driven by the state rental stock s alignment with demand, including allocation and asset performance. The Corporation is actively working to reconfigure the state rental portfolio over the next 10 years relative to demand to provide the right property, in the right location, and in the right condition. Number of applicants on the waiting list 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 C&D A&B Return on equity In /, the Corporation generated a return on equity of 1.7 percent, which was higher than the Statement of Intent target of 1.5 percent. This return has been achieved through lower lease costs, and the successful implementation of efficiency savings around maintenance and interest expenses. Return on equity 1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 2007/ / / /11 /12 12 housing new zealand corporation annual report -

15 Impact Statement 1: 1 Medium-term Information New Zealanders who request state housing are well informed of their housing choices, and those in greatest need have access to a state house for the duration of that need Key achievements include: Assisting 7,028 applicants into state rentals, of which 94 percent had a priority need (designated as A or B priority) Providing an income-related rent to 60,144 households, or percent of tenants Housing A priority applicants within an average of 10 days and B priority applicants within an average of 13 days Implementing changes to the Social Allocation System to focus on housing those in high need Customer satisfaction with the Corporation s tenancy management service level increasing to 74 percent Providing 16,553 people with advice about their housing options Supporting 69 tenants to move to a more suitable state rental or into housing independence in the private rental market or into home ownership Selling 25 state rentals to tenants Re-organising the Corporation s service delivery model and systems to provide better services to its customers Implementing the suspensions policy for tenants Freeing up 312 properties for households in need, through a continued focus on investigating instances of fraud Focusing on housing those in high need The Corporation plays an important role in ensuring that households in high housing need have access to good quality, suitable state rentals for the duration of their need. Revision of the Social Allocation System to ensure those in high need are housed The Corporation is focused on housing those in high need. Since 1 July, the Corporation has had the mandate to house only new applicants with high-priority needs (applicants designated as A or B priority). Moderate and low-priority applicants (applicants designated as C or D) are no longer placed on the waiting list for a state rental 3. Instead they are offered assistance through the Corporation s Options and Advice Service to help identify the range of housing choices available to them. The Corporation housed 7,028 applicants during the / year, compared with 8,127 during the previous 12 months. Of the total number of applicants housed during the year, 94 percent were priority A or B applicants compared with 88 percent in 2010/. The following chart shows the trend in the proportion of A and B applicants housed over the 3 years to 30 June. The Corporation manages its waiting list to ensure applicants are housed within the quickest possible timeframe. By the end of /, priority A applicants were being housed, on average, within 10 days, while priority B applicants were being housed within an average of 13 days. 3 Applicants confirmed on the Corporation s waiting list as a C or D priority before 1 July remain eligible for a state rental. housing new zealand corporation annual report - 13

16 Housing New Zealand Impact Statement 1: continued The length of time an applicant waits for a state rental depends on their individual circumstances, their current housing situation, and the availability of the right property to meet their needs, as well as their need relative to other applicants on the waiting list. The following chart illustrates the average time taken to house A and B priority applicants. Average number of days taken to house A and B applicants A applicants B applicants Proportion of those housed who were priority (A or B) applicants 100% 95% 90% 85% 80% 75% 70% Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Corporation tenants are eligible to pay an income-related rent, which is set at 25 percent of their net income up to the New Zealand superannuation threshold. Fifty percent of any income above this threshold is also paid as rent, until the market rent for the property is reached. The Crown pays the Corporation the difference between the amount paid by the tenant and the market rent of the dwelling. As at 30 June, percent of state rental tenants pay an income-related rent, compared with percent at 30 June. This proportion is expected to increase as the Corporation continues to house more tenants in high need. 14 housing new zealand corporation annual report -

17 Greener pastures for Hawke s Bay family Medium-term Information Implementation of reviewable tenancies for new tenants On 1 July, the Corporation implemented reviewable tenancies for all new tenants. The Corporation will review new tenants circumstances every 3 years to ensure they continue to need a state rental, or earlier if a tenant s circumstances change. Tenancy reviews will take into account the needs of vulnerable tenants such as older people and those with disabilities. Over the last year, the Corporation has also taken opportunities where available to assess tenants needs and support them to move on to independent accommodation. For example, when a tenant applies for a transfer to another state rental, there is an opportunity to reassess the tenant s needs. The Corporation has also supported tenants who request a transfer to a Corporation property better matched to their needs or who want to transition in to independent accommodation. Legislative changes are necessary so the Corporation can review tenants ongoing need under the Social Allocation System framework. Until amendments are made, the Corporation will continue to work with tenants so that it understands their individual needs better. The Corporation also offers new tenants the opportunity to set voluntary action plans to identify their housing goals and the barriers they face to achieving housing independence. This helps set the expectation that state rentals are for the duration of their need. Providing advice to customers about their housing options Before April, all customers who approached the Corporation for housing were assisted through the Options and Advice Service, except where they showed an urgent need for housing. When the new service delivery model was implemented in April, the process changed. Now every customer who approaches the Corporation for housing is first pre-assessed by housing advisors at the Corporation s Customer Services Centre, and then only customers ineligible for a state rental are assisted through the Options and Advice Service. With three children and another on the way, former Hawke s Bay tenants Paula and Mervyn wanted to move away from a problem neighbourhood to raise their children in a more family-friendly area. So they contacted Housing New Zealand to see what their options were. Paula and Mervyn spoke to staff about what type of neighbourhood they wanted to live in, and what their best options were for moving. We talked about our housing aspirations, what was best for the children and what we wanted in the long term, said Mervyn. We talked about our housing aspirations, what was best for the children and what we wanted in the long term. It turned out that, through the right support and help, the family could move into a private rental home in a neighbourhood of their choice. Corporation staff put the family in touch with real estate agents and provided them with a tenancy reference. The family are happy and relaxed in their private rental home, and have inspired friends living in Corporation properties in their old neighbourhood to move into private rentals also. The properties they have moved out of are now tenanted by families from the waiting list who are in high need. This is appropriate given that the circumstances of priority A and B customers mean they cannot sustain other housing options outside of a state rental tenancy, and therefore the information provided by the Options and Advice Service would be of limited or no value to them. housing new zealand corporation annual report - 15

18 Housing New Zealand Impact Statement 1: continued The Options and Advice Service includes information on renting a home from a private landlord, home ownership products, and if an applicant wants to stay where they are, the Corporation will look at options to improve their circumstances. During /, 16,553 people were provided with advice about their housing choices. Assisting tenants to housing independence The Assistance to Housing Independence programme targeted tenants who were paying market rents and those occupying a state rental too large for their needs. During /, housing advisors in Auckland, Hamilton, Napier/Hastings, and Wellington worked with customers to help move them towards housing independence. Between September and June, 570 Household Action Plans were created to support tenants towards housing independence. Over this time, 69 tenants transferred to a state rental better matched to their household composition or exited a state rental completely. Six of these households left as a result of purchasing their own home, while 15 moved into private rental accommodation. In total, the Corporation provided $60,794 to support those 69 households to move. The payments were used to help with rent in advance, bond, utility connections, legal fees and moving costs. On 30 June, the programme closed, and the knowledge gained will be integrated into the Corporation s tenancy management operations. Tenant Home Ownership Programme The Corporation s Tenant Home Ownership Programme provides tenants with the opportunity to purchase the state rental they live in 4. Since the programme started in September 2009, 84 state rentals have been sold to tenants, and 25 of these sales were settled in /. The programme not only offers the opportunity for tenants to achieve housing independence, but has also raised almost $20 million for the Corporation to reinvest in properties in areas of high demand. Freeing up state rentals Fraud investigations The Corporation has continued to commence investigations where appropriate to ensure that those with genuine housing needs receive the right level of benefits at the right time. Through investigations during /, the Corporation freed up 312 state rentals for applicants in high need, with 120 tenants convicted for fraud and $9.6 million in Crown debts established for overpaid subsidies. The following graph shows the number of tenancies ended as a result of fraud investigations over the past 4 financial years. Number of state rentals freed up for people in high need through Corporation action / /10 / /11 4 Only properties available for sale can be sold to tenants. These are typically standalone, freehold properties, where the sale will not compromise the Government s other objectives for housing and where the properties are not essential for the Corporation s asset plans. 16 housing new zealand corporation annual report -

19 Medium-term Information Suspensions The Corporation s Suspensions policy was implemented in November and works hand in hand with the Encouraging Good Neighbour Behaviour policy, which outlines the Corporation s approach to dealing with situations where tenants display anti-social behaviour. Under the new Suspensions policy, tenants who allow serious anti-social behaviour at their property or who commit a serious breach of their tenancy obligations (including fraud) may have their eligibility for a state rental suspended for up to 1 year. Visitors to the property who display anti-social behaviour may also be suspended from eligibility. As at 30 June, 31 tenants have been suspended as a result of anti-social behaviour, unlawful activity or, in the majority of cases, fraud. Further cases are being considered for suspension and are pending final decision. Improving the way the Corporation works with its customers In /, as part of its broader Transformation Programme, the Corporation deployed a new service delivery model that will ensure it is focused on providing tenancy management services as fairly and efficiently as possible. This includes reorganising the Corporation s frontline services, and delivering new technology to provide services more consistently and cost-effectively In the past, customers had to visit or phone the Corporation s local offices to address their enquiries. Key features of the new service delivery model include: Increasing the size of the Corporation s Customer Services Centre and the range of services it provides to ensure better assistance for customers. Most routine enquiries will be able to be managed quickly and over the phone Freeing up tenancy managers from dealing with routine enquiries to focus on actively managing properties and tenancies Shifting some functions to specialist centres to improve the management of maintenance, debt, income-related rent administration, and tenancy tribunal issues. Under the new model, the Customer Services Centre is now the first point of contact for customers and Corporation offices are open only for scheduled and emergency needs assessments. This provides a more consistent service to customers, and is freeing up tenancy managers to spend more time in their communities managing tenancies. The Corporation anticipates that eventually tenancy managers will be able to increase their face-to-face time with tenants from 40 percent to 70 percent, as they will spend less time on administration and responding to phone calls. The Corporation also increased the number of Customer Services Centre staff and extended the range of services available to customers. All queries are now initially routed through the Customer Services Centre and customers can get an immediate response for all enquiries, 24 hours a day, 7 days a week. Performance at the Customer Services Centre has steadily improved since changes were implemented in April. Customer Services Centre performance to June The following table highlights how call volumes significantly increased as a result of the implementation of the new service delivery model in April as the Customer Services Centre became the first point of contact for customers. July 5 April (go-live date) June Number of incoming calls 72, , ,174 Percentage of calls abandoned 14% 45% 21% Average time to answer N/A 6 6 minutes 53 seconds 3 minutes 27 seconds Number of pre-assessments N/A 2,119 2,621 5 The Corporation s reporting tools for capturing this data, as well as the services offered through the Customer Services Centre, changed in February so results prior to then cannot be directly compared with results after February. 6 Results for average time to answer are not available, but the percentage of calls answered within 40 seconds was 52.7 percent. housing new zealand corporation annual report - 17

20 Housing New Zealand Impact Statement 1: continued Progress made during / Key Performance Indicators /12 target /12 actual The percentage of Options and Advice Service customers who are better informed of their housing choices increases The percentage of high need applicants that are housed within the target number of days to house increases 72% 59% 75% 71% The turnaround time (down time) between tenancies decreases Within 30 days 68 days Performance explanation The percentage of Options and Advice Service customers who are better informed of their housing choices increases Of the customers surveyed, 59 percent stated that they felt better informed. It may be that some of those who stated they did not feel better informed already had good knowledge of the housing options available to them before accessing the service. In addition, some of these customers may not be distinguishing between being better informed about their housing choices and being dissatisfied at finding they are not eligible for a state rental. The percentage of high need applicants that are housed within the target number of days to house increases 7 One of the reasons for missing this target is the mismatch of available properties to demand. There can also be delays because an applicant expects maintenance to be completed before they begin their tenancy. With the benefits expected from the new service delivery model related to the management of vacated properties, the Corporation expects the performance of this measure to improve. The turnaround time (down time) between tenancies decreases The turnaround measure calculates the time from the moment a property is let and counts back to the time the property was previously let. This is then averaged to give a national figure. Thus when properties that have been vacant for a long time are eventually let, this adversely affects the overall turnaround time result. There is a natural tension between reducing turnaround time and matching applicants to the most suitable property. If the Corporation places emphasis on achieving the best match for tenants, properties remain vacant for longer periods. Consequently, when longterm vacant properties are eventually tenanted, this adversely affects the turnaround measure result. Through its reconfiguration programme, the Corporation is increasing the proportion of its properties that are in the right locations and of the right configuration to meet demand. Over time, this will contribute towards reducing the number of days to turnaround properties. The Corporation also expects that implementing the new service delivery model will improve the management of vacant properties, and this will have a positive impact on the average turnaround time. 7 The target number of days to house is less than 10 days for A priority applicants and less than 15 days for B priority applicants. 18 housing new zealand corporation annual report -

21 Impact Statement 2: 2 Medium-term Information The state housing portfolio is reconfigured to align with demand, and the number of houses that are fit for purpose is increased Key achievements include: Improving alignment of the state rental portfolio so properties are located in areas of demand (from 81 percent in 2010/ to 83 percent in /) Delivering 9,242 upgrade interventions to improve the condition of properties Continuing the rebuild of Christchurch, including completing 6,926 urgent health and safety repairs during / Providing ongoing rent relief for Canterbury state rental tenants in the worst affected suburbs following the 22 February earthquake Developing regional action plans that take into consideration local opportunities and constraints to make better decisions about the Corporation s properties Developing a tool to measure the quality of properties more effectively Assessing 633 buildings across the country for their earthquake risk The Corporation currently manages approximately 69,500 properties, which represents around 5 percent of the total housing stock in New Zealand. As a social landlord, the Corporation makes asset management decisions that recognise the needs of its tenants. This means that when the Corporation acquires properties, it makes sure they are located in areas where need is the greatest and are close to amenities such as schools and public transport. The current configuration (the location and size of properties) of the portfolio means that in some areas the Corporation is unable to meet priority demand. Many of the Corporation s state rentals are in the wrong place or are the wrong size to meet future needs. While there are regional variances, the national trend is demand for smaller properties from people with complex needs. However, in Auckland, there is an increasing need for larger state rentals as well as smaller properties. Demand for the traditional three-bedroom rentals has dropped dramatically and the Corporation now has too many properties of this type. The following diagram shows the configuration and location of the Corporation s properties across New Zealand. housing new zealand corporation annual report - 19

22 Housing New Zealand Impact Statement 2: continued Configuration of the state rental portfolio today TOTAL 15,468 OWN 14,379 LEASE 1, Northland, Auckland (North, Central & West) % TOTAL 17,339 OWN 16,262 LEASE 1, % Auckland (East & South) Waikato, Coromandel, King Country, Bay of Plenty, East Coast, Taranaki TOTAL 9,944 OWN 9,421 LEASE % Wellington, Hutt Valley, Manawatu, Wanganui, Hawke s Bay TOTAL 10,246 OWN 9,855 LEASE % TOTAL 14,830 OWN 14,650 LEASE % TOTAL 1,580 OWN 1,526 LEASE 54 COMMUNITY GROUP HOUSING % South Island 0-1 bedroom TOTAL PORTFOLIO 69,407 2 bedroom OWN 66,093 LEASE 3,314 3 bedroom 4+ bedroom Data as at 30 June % 20 housing new zealand corporation annual report -