Statement of Intent 2009/10

Transcription

1 Statement of Intent 2009/10

2 Contents Purpose 01 Chair s Foreword 02 Chief Executive s Introduction 03 A Medium-term Information 04 B The operating environment 04 New Zealand context 04 The Corporation s operating environment 06 The Corporation s purpose 08 The Corporation s formal mandate 08 The Corporation s subsidiaries 09 Outputs lead to outcomes 09 The Corporation s strategic direction 10 The two outcomes 10 Priorities for 2009/10 11 The Corporation s Outcomes Framework 12 Medium-term operating intentions 13 Outcome 1 14 Outcome 2 17 Key strategies to achieve our outcomes 21 Measuring progress against our outcomes 22 Annual Information Statement of Responsibility 43 Statement of Forecast Service 44 Performance Introduction 44 Summary of output expenses 44 Output Class 1: Advisory Services 45 Output Class 2: State House Tenancies 47 Output Class 3: Policy Advice 49 Output Class 4: Financial Assistance 51 Housing Output Class 5: Property Management 54 Agency Services Organisational health and capability 27 Increasing value for money 27 Performance excellence 28 People 28 Health, safety and security 29 Information systems and technology 29 Risk management 30 The Corporation s key risks 30 Physical assets and capital intentions The state housing portfolio Organisational property and equipment Consultation and reporting to the Minister Statement of Forecast Financial 56 Performance Forecast financial highlights for 2009/10 56 Forecast financial statements 57 Statements of underlying assumptions 61 Statement of accounting policies 67 Appropriations 74

3 Purpose This Statement of Intent sets out the strategic direction of Housing New Zealand Corporation (the Corporation) over the next three to five years, and our planned operating performance for 2009/10. It explains how our activities will contribute to achieving our outcomes and how the Corporation will measure progress towards those outcomes. Housing New Zealand Corporation - Statement of Intent 2009/10 01

4 Introduction to the Statement of Intent Chair s Foreword The Corporation manages a portfolio of more than 69,000 houses, currently valued at $15.1 billion. How we manage this multi-billion dollar asset in the current economic climate will have to change. In the past, growing the housing portfolio has been the Corporation s top priority, resulting in fewer upgrades of Corporation houses. The focus now is on improving the housing portfolio by upgrading state houses to a modest but modern level of amenity. Deteriorating economic conditions and rising unemployment will lead to increased demand for Corporation housing from those in the greatest need, who will struggle to find suitable housing in the private sector. This means better utilisation of our housing portfolio is also a priority. For those on waiting lists and others seeking assistance from the Corporation, a Housing Options and Advice Service to be developed this year will provide access to a wider suite of public and private sector housing options. Existing Corporation tenants who could access other renting or buying opportunities will also be offered this advice. This will free up state houses for families in greater need. The opportunity for some Corporation tenants to buy the homes they rent will be made available this year. This not only encourages better utilisation of assets but gives those who no longer need a state home another pathway to independence. The funds earned from these sales will be reinvested in buying or leasing state homes in areas of need. In October 2009, earthworks are scheduled to begin at the first of six precincts planned for Hobsonville. The need for the Corporation to do things differently also extends to changing our approach to working with communities. Successful redevelopment of communities can reduce state housing concentrations, and facilitate blended communities with a mix of incomes and housing tenures. The Tamaki Transformation Programme in Auckland demonstrates this. The programme involves redeveloping state housing in the Tamaki area (Glen Innes, Point England and Panmure) and providing affordable housing for rent and home ownership options. It is supported by an interagency approach aimed at improving social and economic outcomes for Tamaki residents. Tamaki represents the way of the future as we all strive to make the most of our resources. I look forward to the Corporation delivering on this Statement of Intent. Pat Snedden Chair Increasing housing supply and creating affordable options for first-home buyers are also Government priorities. The Corporation s subsidiary, the Hobsonville Land Company, is continuing the development of the greenfields site in west Auckland that will ultimately provide 3,000 new homes. 02 This Statement of Intent is available to download from

5 Chief Executive s Introduction It is essential for public sector agencies to look at ways of working smarter, working together, sharing ideas and finding innovative solutions. The Corporation is playing its part. We recognise we have a role to play in supporting New Zealand s economic recovery by maximising the economic impact of our operations, and expanding the reach and effectiveness of our services in a time of increasing need. The Corporation s continued focus on value for money spending will contribute to multiple government outcomes through housing and housing-related services. In February 2009, the Corporation received $124.5 million of additional funding from the Government s fiscal stimulus package to spend on state housing over an 18-month period to July The money is being used by the Corporation to build new state homes and improve existing ones across the country by making them warmer, drier and healthier. An immediate challenge for the Corporation from the slowing economy is that the waiting list is expected to increase. This is particularly an issue in Auckland. The Corporation is responding to this challenge through the development of a Housing Options and Advice Service and through its Housing Pathways Strategy. The Housing Pathways approach involves working with applicants, tenants and others, and recognises that while people find themselves in need of social housing, changing life circumstances may affect their housing options and choices over time. This approach maximises both applicant and tenant outcomes, and the Corporation s ability to house those in the greatest need. Increasing the supply of affordable housing is another Government priority. The Corporation is working across Government on new initiatives, including the Gateway Housing Initiative, and the ambitious Tamaki Transformation Programme. As we develop these initiatives, we are mindful of the needs and home ownership aspirations of our Māori and Pacific peoples tenants. Thirty-six percent of our tenants identify as Māori, and 25 percent as Pacific peoples. In Auckland, where many Pacific peoples and Māori tenants live, home ownership is projected to drop to 58 percent by Home ownership is lower for Māori (43 percent) and Pacific peoples (34 percent). The Corporation s Housing Strategy for Pacific Peoples and our Māori Work Programme respond to these issues. An important aspect of our work is helping people to sustain tenancies and address tenant behaviour. Our new policy on Encouraging Good Neighbour Behaviour supports staff in their management of more than 69,000 tenancies. We are telling tenants what our expectations are in regard to their property, their neighbours and the consequences of anti-social behaviour. After all, our purpose in providing the benefit of a state house is to help people manage their own circumstances and contribute to community life. We work actively with other agencies to help our tenants achieve this. A well-performing, focused public sector is critical to helping New Zealand move forward. This Statement of Intent has been developed in consultation with the Minister of Housing and the priorities identified are consistent with the policies and performance expectations of the Government. By making the investments it has, the Government has entrusted the Corporation with a major responsibility over the next year. We intend to fulfil it. Dr Lesley McTurk Chief Executive Housing New Zealand Corporation - Statement of Intent 2009/10 03

6 Medium-term Information The operating environment Housing contributes to economic and social outcomes. Good quality, suitable and affordable housing is linked to health, educational performance, wealth and personal security. New Zealand context Economic conditions are deteriorating Economic conditions have deteriorated globally and locally. The Treasury forecasts two years of negative economic growth. Weaker exports and domestic demand will result in fewer jobs and higher unemployment. The New Zealand population is changing Population growth Between 2001 and 2006, New Zealand s population grew by about 8 percent. The Auckland region accounted for 47 percent of this growth. The New Zealand population is forecast to reach five million within 20 years. Higher growth is expected in urban areas. Auckland s population is projected to increase by 53 percent to 2.1 million by 2031, placing increasing pressure on housing 1. Ageing population New Zealand s population is ageing. The number of New Zealanders aged 65 and over is projected to increase from 12 percent in 2006, to more than 20 percent by An ageing population will increase the demand for health and aged-care services. Appropriate housing is needed to support independence, maintain health and well-being, and prevent early entry into residential care. Population aged : 10% of population aged : 12% of population aged : 20% of population aged 65+ Increasing diversity New Zealand is becoming more ethnically diverse. By 2026, it is forecast that the population will be 15 percent Māori (up from 14 percent in 2006), 9 percent Pacific peoples (up from 7 percent in 2006), 14 percent Asian (up from 9 percent in 2006) and 62 percent European/Pākeha (down from 71 percent in 2006) 3. Increasing diversity results from immigration and the comparatively younger age structure and higher fertility rates of New Zealand s Māori, Asian and Pacific populations. This will result in more varied housing needs, such as a need for more larger houses. Smaller households The average number of people per household is projected to decline from 2.6 people in 2006 to 2.4 people in As a result, the number of households will increase faster than the population with an increasing proportion of 1 The Royal Commission on Auckland s Governance, Statistics New Zealand. National Population Projections: 2006 (base) 2061 Series 5. 3 Statistics New Zealand. These shares are all based on Series 6 of the national ethnic population projections compared with Series 5 of the national population projections. 4 Statistics New Zealand. National Household and Family Projections: 2006 (base) This Statement of Intent is available to download from

7 A 2006 Population diversity Population diversity Home ownership 71% 67% 62% 58% Māori Pacific Asian European and other 14% 7% 9% households with one person and couples without children, and a decrease in households with three or more children. Women are having children later, delaying family formation, meaning that more single people and couples in their fifties are raising children. The housing market Māori Pacific Asian 71% European and other 15% 9% 14% 62% Home ownership rates are declining In 2006, 67 percent of homes in New Zealand were owneroccupied, down from 71 percent in Projections suggest that owner-occupied housing will decline to 62 percent by Regionally, Auckland has lower home ownership, projected to drop to 58 percent by Home ownership is lower for Māori (43 percent) and Pacific peoples (34 percent) New Zealand Auckland Housing affordability is fluctuating House prices increased up to November More recently, house prices and interest rates have declined, and houses have become more affordable. House sale prices fell about 9 percent in the year to February The Treasury predicts house prices will fall further in 2010, reflecting lower demand as a result of tighter lending criteria, investor uncertainty, low net migration and a weakening labour market. Landlords who may have sold are now more likely to hold property; renters are less likely to be willing or able to buy. This uncertainty is expected to continue for the next 2 years. The report of the House Price Unit (Department of Prime Minister and Cabinet) described an emerging intermediate housing market: those currently in the private rental market who cannot access state housing and cannot afford to purchase a modestly priced house. 5 Due to rounding, figures may not add to 100%. 6 Census 2006 and Housing in New Zealand, CHRANZ and Building Research, August QV New Zealand Ltd. Housing New Zealand Corporation - Statement of Intent 2009/10 05

8 Medium-term Information Private rental market will be impacted Declining home ownership means more renters. Most of the 33 percent of New Zealanders who rent are in the private sector. The remainder rent from the Corporation or other social housing providers, such as community-based organisations and iwi. The Accommodation Supplement and the Income-Related Rent Subsidy are the two main state interventions that support housing affordability for low- to modest-income households. Without these, housing affordability would burden many households. Low- to modest-income private renters face challenges such as low security of tenure and discrimination, despite assistance from the Accommodation Supplement. Landlords in New Zealand have enjoyed tax-free capital gains but, because of falling house prices, capital gains for landlords are unlikely in the medium term. Landlords may try to raise rents to maintain overall returns. However, an excess supply of tenants is needed for rents to rise significantly. At present, it seems that the rental market is in good balance and rents are not rising significantly. New Zealand s housing is under-maintained Much of New Zealand s housing stock requires maintenance and does not adequately meet occupants needs. New Zealand houses compare poorly to houses in countries with similar wealth and income. In 2005, the Building Research Association of New Zealand estimated the cost of more urgent maintenance at $3,700 per house. The average annual expenditure on maintenance is less than $1,300 per house. The Corporation spends, on average, about $2,900 per house a year on responsive and planned maintenance. Poor quality housing results from poor construction, poor materials, a lack of maintenance or the property being used for a purpose that was not intended (for example, people living in garages). In winter, New Zealand home temperatures average 6 C below World Health Organisation recommendations. Forty-five percent of all New Zealand homes are mouldy a cause of respiratory illness. Links between poor housing quality and health are clear, as are the benefits of insulation and heating. Overcrowding may increase Overcrowding is expected to increase as families face difficult financial times, resulting in higher rates of disease transmission, a more difficult study environment for children and an increase in household stress. Overcrowding has declined nationally but is increasing in South Auckland, where the number of households is growing faster than houses are built. Building and construction activity is falling Building activity has fallen to a level last seen in Employment in building and related industries has fallen, and this will have a flow-on effect on consumer demand. The Corporation s operating environment The economic recession and housing market described above will impact on the Corporation as a landlord, its ability to assist people buying their first homes and its ability to help community-based organisations provide social housing. Impact of a slowing economy Deteriorating economic conditions and rising unemployment will lead to increased demand for state housing from the worst-off private renters who struggle to find suitable housing in the private sector. The more immediate challenges for the Corporation from a slowing economy are: an increase in the number of households in high housing need a decrease in the turnover of Corporation tenancies as lower tenant incomes (including the loss of part-time work) reduce tenants ability and desire to rent privately overcrowding in Corporation houses when family or friends experiencing difficulty move in with the tenant household difficulties in securing development partners owing to problems securing finance. This impacts on the Corporation s ability to both buy and lease more rental housing. 06 This Statement of Intent is available to download from

9 A Fluctuating housing affordability Fewer working households and community-based organisations are able to purchase a modest dwelling without assistance. Meeting stewardship obligations Many state houses need significant upgrading to achieve a modest but reasonably current standard. Upgrades relate to the amenity, efficiency and usability of the house. This is distinct from expenditure on maintenance. Maintenance maintains the basic health and safety of the house and fixes parts of the house that are broken or have been damaged. Upgrades may involve activities such as insulation, improved ventilation and heating. The cost of upgrading the housing portfolio is currently estimated at $2 billion. Meeting longer-term demand changes Changing household composition challenges the Corporation to provide an appropriate mix of housing. A growing and ageing population, increased ethnic diversity, and changing household types will increase demand for both larger and smaller houses. The Corporation is already experiencing more demand for smaller homes for single people and couples. There is also more demand for larger homes from quota refugees and other larger families (often Pacific peoples), particularly in Auckland. Intervening to change communities While economic issues dominate the short-term outlook, the Corporation must consider longer-term impacts on the community. Concentrations of low-income households in deprived areas result in more hardship, lower educational attainment, poor health, overcrowding and crime. Addressing this is important because individuals are heavily influenced by the neighbourhoods in which they live. Impact of the operating environment on the Corporation The deteriorating economy challenges the Corporation s ability to meet both increased and changing demand for housing and to upgrade existing stock. Changes in tenant demand will occur faster than the asset response, although more effort will be put into forecasting demand. As noted above, buying or leasing new houses is expected to be more difficult, although contractors for upgrades should be more readily available. Over the same time, the changing needs of current tenants and future applicants will challenge the Corporation to provide a greater variety of housing. The current housing portfolio is not meeting the needs of applicants and tenants. There is a shortage of two-bedroom and four-bedroom houses, and a need to upgrade the current portfolio. A combined asset response of both upgrades and additional stock in areas of high demand requires careful planning. The Government has provided additional funding for upgrades and new housing in areas of high demand, but also requires the Corporation to sell to tenants able and willing to buy their state house. The following table shows the expected net impact on the housing portfolio over the next 3 years (subject to annual review). The impact will vary regionally. Regions with lower demand may have a net loss of houses, while areas of high demand (eg South Auckland) will experience an increase in overall housing stock. Changes in housing stock over the medium term 2009/ / /12 Houses acquired Houses disposed of (421) (398) (368) Net impact Cumulative impact ,000 Housing New Zealand Corporation - Statement of Intent 2009/10 07

10 Medium-term Information The Corporation s purpose The Corporation is responsible for giving effect to the Crown s social objectives by providing housing and housing-related services in a businesslike manner to those most in need. The Corporation has a clear mandate to address the challenges posed by its operating environment over the next three to five years. The core functions of the Corporation are tenancy allocation, tenancy management and asset management to provide an appropriate and affordable house to those in the greatest housing need. The Corporation buys, builds, leases, maintains and upgrades state houses. Affordability is delivered through an income-related rent, well below the market rent for most tenants. The core tenancy role accounts for almost all of the Corporation s operating appropriations, income and expenses. Most of the Corporation s staff are involved in the core tenancy role. The Corporation also has responsibility for delivery of the Government s housing initiatives and contributes to the Government s wider social objectives, including: providing housing for community-based organisations, offering housing and support services, and working with community social housing providers, Māori housing providers and iwi to address local housing problems assisting people who are buying their first homes by developing and providing home ownership products and services advising the Minister of Housing on housing policy and housing-related services, and conducting research and monitoring trends in housing managing property on behalf of the Crown that has been transferred to direct Crown control within the Housing Agency Account. The wider housing sector functions and advisory roles, while important, account for relatively little of the Corporation s total operating expenses and capital expenditure. For example, the operating appropriations for Housing Support Services such as Healthy Housing, Weathertight Loans, Housing Innovation Fund, Mortgage Insurance Scheme (Welcome Home Loans) and KiwiSaver Deposit Programme come to just over $12 million of the more than $600 million of operating appropriations for 2009/10. The Corporation s formal mandate The Corporation is a Crown entity. The Housing Corporation Act 1974 sets out the Corporation s objectives and functions as follows 8 : a to give effect to the Crown s social objectives by providing housing, and services related to housing, in a businesslike manner, and to that end to be an organisation that: i exhibits a sense of social responsibility by having regard to the interests of the community in which it operates; and ii exhibits a sense of environmental responsibility by having regard to the environmental implications of its operations; and iii operates with good financial oversight and stewardship, and efficiently and effectively manages its assets and liabilities and the Crown s investment; and b to ensure that the Minister of Housing receives appropriate policy advice, other advice, and information, on housing and services related to housing. 8 Housing Corporation Act 1974 as amended by the Housing Corporation Amendment Act 2001, section 3B(a) and (b). 08 This Statement of Intent is available to download from

11 A The Corporation s subsidiaries The Corporation has subsidiaries to the Housing New Zealand Corporation parent company, including: Housing New Zealand Limited A wholly-owned subsidiary of the Corporation that owns the state housing portfolio (excluding Community Group Housing, which is held by the parent company) and provides rental housing. Housing New Zealand Corporation Property Development Limited A wholly-owned subsidiary of the Corporation that holds land intended for development or on-sale by the Corporation. Hobsonville Land Company Limited A wholly-owned subsidiary of the Corporation. It is managing the project planning for the development of the former airbase site at Hobsonville, Auckland. Development activity in Hobsonville is funded through the Crown s Housing Agency Account. The Output Class review captures activity undertaken by the Corporation, including property management and development services undertaken on behalf of the Crown (for example, the Hobsonville development). The Output Class review is the first step of a two-step process to align the Corporation s Output Class structure and appropriations, to deliver a more transparent presentation of what the Corporation will achieve and how internal and appropriated funds are spent. The first stage, completed in 2009/10, maps the Corporation s outputs and provides the basis of the 2009/10 Output Agreement with the Minister. The second stage will be to align the new Output Classes with appropriations in Vote Housing. This will be done in the 2009/10 financial year for the 2010/11 Statement of Intent and Estimates of Appropriations. Outputs lead to outcomes 9 The Corporation delivers outputs that contribute to outcomes. This Statement of Intent describes both the measures and standards required to meet the Corporation s outcomes, and an outcomes framework that outlines how the Corporation will measure the changes in outcomes for its tenants and communities. The Corporation is undertaking a comprehensive review of its outputs (the Output Class review). All activities undertaken by the Corporation that are final goods and services are grouped into Output Classes of similar activities. These new Output Classes are the basis for revised performance measures in this Statement of Intent. 9 An outcome is the change in the economy or society directly or indirectly attributable to the Corporation s outputs. An output is a final good or service produced or provided by the Corporation. Housing New Zealand Corporation - Statement of Intent 2009/10 09

12 Medium-term Information The Corporation s strategic direction The Corporation s vision is to work for New Zealanders by creating housing opportunities and strengthening communities. Its mission statement defines its purpose as providing access to decent homes, and helping New Zealanders manage their own circumstances and contribute to community life. The Corporation contributes to the achievement of the Government s wider social, economic and environmental goals by working to achieve housing outcomes for New Zealanders. The Corporation does this in partnership with other government agencies. The Corporation is playing a role in the delivery of the Government s Jobs and Growth Plan to stimulate economic growth, through the additional $124.5 million being spent on upgrades and new state houses. The Corporation will continue to focus on value for money spending which will contribute to multiple government outcomes (for example, upgrades will stimulate employment while also improving housing) through the delivery of housing and housing-related services. The two outcomes The Corporation has identified two outcomes where it expects to deliver results through the Corporation s services. 1. Where the Corporation has a significant influence, people will have access to decent, affordable housing. 2. Where the Corporation has a significant influence, people will live in safe, inclusive communities. The outcomes are interrelated and within the Corporation s sphere of direct intervention and influence. The Corporation s Outcomes Framework describes what the Corporation seeks to achieve through housing and how this will impact on New Zealanders. The Outcomes Framework describes how the Corporation contributes to the wider social outcomes of the Government. These outcomes cannot be achieved by the Corporation alone, as many other government agencies and nongovernment groups also work towards them. To deliver the best value for public money, the Corporation will work closely with government, private agencies and other stakeholders on housing-related outcomes or activities. 10 This Statement of Intent is available to download from

13 A Priorities for 2009/10 The following priorities represent how the Corporation will focus its investment to achieve its outcomes. Improving housing affordability for low- to middleincome earners This involves development and implementation of the Gateway Housing Initiative and a mechanism for tenants to purchase their state houses. Improving value for money The Corporation must continue to seek ways in which it can use its resources in the most efficient and effective manner to achieve the Government s social objectives for housing. The Corporation s Outcomes Framework The Outcomes Framework on the next page illustrates the relationship between the Government s broader societal outcomes and the Corporation s outcomes for housing. Upgrading state housing stock to a decent standard The Corporation must continue to improve its management of the overall state housing portfolio. The priority is to raise the quality of housing to an appropriate standard. Developing a Housing Options and Advice Service The Corporation is developing a Housing Options and Advice Service that supports improved outcomes for those seeking homes. This will result in the provision of better advice about the range of options available to those who approach the Corporation for assistance and to existing tenants, including those looking for opportunities to buy. Expanding social housing options This will involve ensuring high-quality expenditure within the Housing Innovation Fund to support the growth of the social housing sector. Facilitating improvement in communities where state housing dominates The Corporation will work with community agencies and other government agencies to revitalise areas with high concentrations of state housing and social need through housing redevelopments. Housing New Zealand Corporation - Statement of Intent 2009/10 11

14 Medium-term Information The Corporation s Outcomes Framework Government outcome Housing New Zealanders have access to affordable, good quality housing appropriate to their needs Economic development Health Safety and security Education Social well-being The Corporation s objective To give effect to the Crown s social objectives by providing housing and services related to housing Outcomes Where the Corporation has a significant influence, people will have access to decent, affordable housing Where the Corporation has a significant influence, people will live in safe, inclusive communities Priorities 2009/10 Improving housing affordability for low- to middleincome earners Upgrading state housing stock to a decent standard Developing a Housing Options and Advice Service Expanding social housing options Facilitating improvement in communities where state housing dominates Improving value for money 12 This Statement of Intent is available to download from

15 A Medium-term operating intentions This section sets out the outcomes where the Corporation expects to make a difference, its priorities and specific actions for change, and how it will measure progress. This section outlines the outcomes the Corporation will work towards, and why these are important to the Corporation. This is followed by an outline of how the Corporation intends to achieve the outcomes through its priorities, and how it will measure progress in achieving these outcomes over the next 3 to 5 years. The medium-term operating intentions highlight change in the short to medium term, rather than business as usual activity. Under each priority, the specific actions the Corporation will take to meet that priority are detailed, and each action is linked to the relevant output as described in the Statement of Forecast Service Performance. What is the Corporation seeking to achieve? The Corporation s purpose is to give effect to the Crown s social objectives by providing housing and services related to housing. The Corporation seeks to help people achieve positive economic and social outcomes through a stable foundation of affordable, appropriate housing within healthy and economically sustainable communities. Access to good quality housing has a significant role in an integrated government response to improving social outcomes for individuals and communities. Why is this a priority for the Corporation? Housing is strongly linked with health, educational performance, wealth and personal security Home ownership, as one type of long-term investment, can contribute to personal independence and security. Many New Zealanders rent. Secure and appropriate rental housing creates stability and makes it easier to maintain school routines, contact with health professionals and community participation. Housing is the largest item in most family budgets, and high housing and heating costs leave less for other essential expenditure and potential savings. A lack of income may force people to live in lower quality housing. Poor and overcrowded housing negatively impacts on tenant health and is associated with respiratory infections, asthma, injuries and poor mental health 10 and impacts indirectly on other outcomes, such as educational achievement. New Zealand houses (including Corporation houses) are often cold, poorly insulated, damp and draughty. The resulting social and economic costs are borne by all New Zealanders. 10 Housing, Crowding and Health Study, a study by University of Otago Wellington School of Medicine and Health Sciences. Housing New Zealand Corporation - Statement of Intent 2009/10 13

16 Medium-term Information What will the Corporation do? The Corporation will deliver housing and housing-related services to achieve its two outcomes. 1. Where the Corporation has a significant influence, people will have access to decent, affordable housing. 2. Where the Corporation has a significant influence, people will live in safe, inclusive communities. Outcome 1 Where the Corporation has a significant influence, people will have access to decent, affordable housing. What is the Corporation seeking to achieve? The Corporation s direct relationship with applicants and tenants gives it a significant influence on their housing choices, including access to other housing options and services. Where it has a significant influence, the Corporation aims to provide: housing to those in greatest need well maintained, safe, healthy and energyefficient homes houses that meet the needs of tenant households, including a variety of large and small house types and sizes, and proximity to amenities and employment support for our customers to make sound housing choices opportunities for affordable home ownership. Why is this outcome a priority for the Corporation? Most New Zealanders meet their own housing needs. Others face temporary or permanent barriers to finding safe, secure and sustainable housing. It is this group that is the focus of the Corporation s involvement as a landlord. Housing quality is an issue for the Corporation. The social housing portfolio is ageing, with the majority built before 1978, and most not up to modern standards. Poorly maintained housing will reduce the impact of other government and community agency interventions to improve social and economic well-being. What will the Corporation do to achieve this outcome? Priority: Improving housing affordability for low- to middle-income earners Achieving home ownership is a challenge facing many New Zealanders. This priority recognises the contribution the Corporation can make to create opportunities for affordable home ownership. The Corporation s role in supporting home ownership is evolving. It has developed a number of programmes to improve access to finance, and build the skills and knowledge needed to buy and maintain a home. The Corporation is expanding its role to deliver home ownership through the development of Corporation and Crown land. 14 This Statement of Intent is available to download from

17 A To achieve this priority, the Corporation will: Develop and implement the Gateway Housing Initiative on Corporation and Crown-owned land to provide affordable home ownership opportunities (including Hobsonville) Implement sales of state houses to tenants Revise policy and operation of housing on multiple-owned Māori land Improve substandard owner-occupied housing, including housing in remote rural Māori communities Work with the Department of Building and Housing to identify housing supply issues, and make proposals to improve housing affordability, supply and urban development This priority will be delivered under: Output Class 3 Policy Advice Output Class 4 Financial Assistance Housing: Output Co-ownership Arrangements Output Class 5 Property Management Agency Services: Output Housing Development Project Hobsonville (Crown) State Housing Portfolio - Divesting Properties (Corporation) Output Class 4 Financial Assistance Housing: Output Loans and Grants Output Class 4 Financial Assistance Housing: Output Loans and Grants Output Class 3 Policy Advice Priority: Upgrade state housing stock to a decent standard This priority relates to the Corporation s role in managing the overall state housing portfolio. The Corporation manages more than 69,000 houses across New Zealand, valued at $15.1 billion. The cost of upgrading the current housing portfolio is estimated at $2 billion, reflecting a significant deferral of upgrades over recent years. Many state houses need significant upgrading to reflect a modest but reasonably current standard so that homes are suitable for modern-day living, bringing the Corporation portfolio up to a reasonable standard. Accelerated investment in upgrading an ageing portfolio is critical to the Corporation providing warm, well ventilated, energy-efficient homes that meet the Corporation s stewardship obligations while also providing work opportunities in the housing sector. The Corporation has funding for additional upgrades in 2009/10 as part of the Government s Jobs and Growth Plan. The Government s expectation is that the Corporation will balance the continued upgrade of current housing stock with acquiring additional houses in high need areas, and making better use of larger houses and underutilised sections. The Corporation is accelerating upgrade activity over 2008/09 and into 2009/10. By the end of 2009/10, about 28 percent of the housing portfolio will have had some form of upgrade in the preceding 2 years. The increased level of upgrades in 2009/10 will reduce but not eliminate the total upgrade backlog. Energy efficiency retrofits, however, will be completed in An estimated 1,000 houses will be added to the portfolio over the 3 years to 2011/12. The Corporation is forecast to build or develop 1,020 houses, sell or demolish 887 and lease another 867 houses. Leasing will meet the gap between houses sold and acquisitions, as sales proceeds will not be sufficient to buy replacement houses. Housing New Zealand Corporation - Statement of Intent 2009/10 15

18 Medium-term Information To achieve this priority, the Corporation will: Accelerate the upgrade of the housing stock with an emphasis on insulation, ventilation and energy efficiency Deliver additional stock in high-need areas (such as South Auckland) Better utilise state houses, including redeveloping sections to better match housing to the tenant profile, disposing of high-value properties and reinvesting proceeds, and reducing the housing stock in areas of low need This priority will be delivered under: State Housing Portfolio Upgrading Existing Properties (Corporation) State Housing Portfolio Adding to the Housing Portfolio (Corporation) State Housing Portfolio Adding to the Housing Portfolio (Corporation); Divesting Properties (Corporation); Housing Redevelopment Projects (Corporation) Priority: Developing a Housing Options and Advice Service The Corporation s core role is to provide state housing and housing services to those in the greatest need. The Corporation s direct contact with tenants and applicants also provides an opportunity to link them with agencies and services they may otherwise may not be aware of or consider contacting. With more than 69,000 tenancies, Corporation tenants have a variety of needs and abilities to function in the private housing market. Many households may require ongoing assistance from the Corporation, but equally other households may be able to move into the private sector as their circumstances improve. The Corporation will develop a Housing Options and Advice Service to help tenants who are able to do so to move into the private sector or to buy their own home. The Corporation will also continue to work with tenants whose housing needs have changed over time, to find a house that better matches their current needs. Overall, this Service will maximise tenant and applicant outcomes, as well as enabling the Corporation to house those in the greatest need. 16 This Statement of Intent is available to download from

19 A To achieve this priority, the Corporation will: Deliver an extended advisory service to applicants and tenants on housing options (state housing, private renting and home ownership) available across the housing sector, including options for low-priority applicants in the private sector and more appropriate housing for those who may benefit from non-housing support Improve the customer focus for its applicant and tenancy management services so that houses are allocated to those most in need and improve the ongoing tenancy relationship with households Measure and then increase the effectiveness of service delivery to Māori This priority will be delivered under: Output Class 1 Advisory Services: Output Advisory Services Housing Options Output Class 1 Advisory Services: Output Advisory Services Housing Options Output Class 2 State House Tenancies: Output Tenancy Management Output Class 1 Advisory Services: Output Advisory Services Housing Options Output Class 2 State House Tenancies Output Class 4 Financial Assistance Housing Outcome 2 Where the Corporation has a significant influence, people will live in safe, inclusive communities. What is the Corporation seeking to achieve? Where it has a significant influence, the Corporation is seeking to: support revitalisation, through housing redevelopment, of communities with high concentrations of social housing and social need into areas that have a strong sense of community pride, more employment and less crime develop partnerships with the community, government agencies and local authorities to improve social, education, employment and health outcomes support community-based organisations to deliver specialist services in the community, including increased emergency and transitional housing for organisations such as Women s Refuge, through an increase in the Community Group Housing portfolio assist iwi and other social housing providers to increase the supply and quality of social and affordable housing work with other agencies on supporting higher-needs occupants of social housing, and to help prevent the future concentration of higher-needs tenants. Why is this outcome a priority for the Corporation? New Zealanders today are better educated, healthier and more prosperous than previous generations. The Corporation, however, is landlord to some of the poorest and most disadvantaged households. These households, particularly in larger urban areas, are grouped in neighbourhoods that are marked by high levels of social deprivation. Families and households living in these communities often have low incomes and experience social exclusion, poor education and poor health. In general, there is a strong correlation between social housing and the geographical locations of high social need communities. Housing New Zealand Corporation - Statement of Intent 2009/10 17

20 Medium-term Information Continuing hardship for such communities can result in long-term social polarisation, and anti-social or criminal behaviour. The challenge is to help lift outcomes for such communities and prevent new areas of deprivation from forming. Because the Corporation has a presence and role in many deprived areas, it can have a positive impact on the lives of those in greatest need beyond the simple provision of rental housing. Improving outcomes beyond housing requires a combined approach from government and non-government agencies, and support for determined action by the communities themselves. What will the Corporation do to achieve this outcome? Priority: Expanding social housing options The non-government social housing sector is small, with only a few larger providers. There is an opportunity over the longer term for increased social and affordable housing solutions for the growing number of New Zealanders on low to medium incomes. Other social housing providers deliver housing services tailored to meet the needs of their local communities. These providers offer an alternative to state housing and assist people with rental or home ownership products. This priority focuses on supporting growth in communitybased housing organisations and iwi to provide an increased supply of social and affordable housing. Funding will be used to support providers that are able to contribute resources, are well established and demonstrate the ability to grow. The Corporation will review how to get further value from the fund before making future financial commitments. The commercial assets of iwi, hapū and whānau are key resources that could support the development of housing. Mutually beneficial partnerships between the Corporation and Māori entities will help address growing demand for affordable housing and help Māori achieve their housing aspirations. Strong partnerships will enable the development of joint venture housing developments with iwi that increase the affordability of housing for Māori. The first five Māori Demonstration Partnerships will be initiated by June The Gateway Housing Initiative, currently under development, will provide more affordable housing for community groups by enabling them to develop housing on Corporation and Crown-owned land (including Hobsonville), with the opportunity to buy the land at a later date. The Corporation supports social housing through Community Group Housing and the Housing Innovation Fund. Community Group Housing rents houses to providers 11 who support people with physical, intellectual or sensory disabilities, or people unable to live in their own homes owing to violence or abuse. The Housing Innovation Fund supports providers to build their own houses. 11 The Corporation does not charge market rent to most Community Group Housing providers, resulting in an implicit subsidy of approximately $4 million per annum based on 2007 QV estimates. 18 This Statement of Intent is available to download from

21 A To achieve this priority, the Corporation will: Work with other organisations to develop policies on funding to support higher-needs occupants of social housing including Community Group Housing Target Housing Innovation Fund loans to providers with a proven track record of helping people into affordable rental accommodation and home ownership Establish Māori Demonstration Partnerships that support Māori to use their assets to develop affordable and sustainable housing Remove unreasonable legislative impediments to building on Māori land This priority will be delivered under: Output Class 3 Policy Advice Output Class 4 Financial Assistance Housing: Output Loans and Grants Output Class 1 Advisory Services: Output Advisory Services Capability Building Output Class 4 Financial Assistance Housing: Outputs Loans and Grants and Co-ownership Arrangements Output Class 3 Policy Advice (working with Te Puni Kōkiri, the Māori Land Court and territorial local authorities) Extend the Welcome Home Loan product to facilitate lending for papakāinga housing and for nongovernment organisations Develop and implement the Gateway Housing Initiative on Corporation and Crown-owned land to provide affordable ownership opportunities to communitybased organisations Output Class 4 Financial Assistance Housing: Output Mortgage Repayment Assurance Output Class 3 Policy Advice Output Class 4 Financial Assistance Housing: Output Co-ownership Arrangements Output Class 5 Property Management Agency Services Priority: Facilitating improvement in communities where state housing dominates There is a strong correlation between concentrations of social housing and high social need. Improvement requires attention to the quality of housing, the layout of neighbourhoods, and should address the anti-social behaviour of a minority of tenants. Community development involves working with communities to help them do the things that improve the lives of the people in the community. The Corporation is not a community development agency but rather a housing agency promoting community development in the context of facilitating improvement in communities where state housing dominates. The Corporation has implemented the Community Renewal Programme since 2001 in areas of very high deprivation and high concentrations of state housing. Community Renewal Programme projects are delivered in partnership with government agencies, local authorities and the community. Aspects of community development such as activities to improve neighbourhood safety always occur alongside housing upgrades. Examples are initiatives to reduce low-level crime (such as graffiti) and after-school and holiday programmes and community gardens facilitated by the Corporation but run by the community. Housing New Zealand Corporation - Statement of Intent 2009/10 19

22 Medium-term Information Community development enhances the neighbourhood as a whole and reduces vandalism and other crime. The Corporation also links with other government and non-government agencies, at little cost to the Corporation, with benefits to all tenants and other local residents. On bigger projects, the cost of community development activities represents under 1 percent of the total project expenditure. Successful redevelopments can increase dwelling intensification to reduce state housing concentrations and create blended communities, characterised by a mix of incomes and housing tenures. An example of successful cross-agency collaboration is the Healthy Housing Programme, where the Corporation works in partnership with the Ministry of Health to improve housing conditions in communities where health risks are high. Another example is the Tamaki Transformation Programme in Auckland which will involve redeveloping state housing in the Tamaki area (Glen Innes, Point England and Panmure) and provide affordable housing for rent and home ownership options. The Tamaki Transformation Programme takes an interagency approach aimed at improving social and economic outcomes for local residents. To achieve this priority, the Corporation will: This priority will be delivered under: Deliver the Tamaki Transformation Programme in partnership with other government agencies, the private sector, non-government agencies and the local community Identify and implement new Community Renewal projects Implement the Healthy Housing Programme in Central Auckland, South Auckland and the Hutt Valley to improve the Corporation s housing in communities with health risks Improve processes so that tenants in Corporation neighbourhoods are not exposed to tenant neighbours who are disruptive, violent or abusive. This process includes reviewing and closely monitoring tenants who have shown serious anti-social behaviour. A new national tenancy agreement has been implemented to clearly define a tenant s rights and responsibilities to their neighbours and community Output Class 2 State House Tenancies State Housing Portfolio Redevelopment Projects (Corporation) Output Class 1 Advisory Services: Output Advisory Services Capability Building Output Class 2 State House Tenancies: Output Tenancy Management State Housing Portfolio Redevelopment Projects (Corporation) Output Class 2 State House Tenancies: Output Tenancy Management State Housing Portfolio Upgrading Existing Properties (Corporation) Output Class 2 State House Tenancies: Output Tenancy Management 20 This Statement of Intent is available to download from

23 A Key strategies to achieve our outcomes The Corporation has developed the following key strategies to guide how it meets its strategic priorities in a particular location or for a certain population. These strategies focus the Corporation on areas where action will address a known deficit or deliver the most improvement in housing and housing-related outcomes. The strategies include annual programmes of action. The strategies build on existing programmes and resources to ensure they meet housing need and provide further housing opportunities for significant subgroups of the population, including Māori, Pacific peoples and households in Auckland. For example, the Asset Management Strategy provides an integrated framework to manage its short- and long-term asset objectives. Auckland Housing Strategy The Auckland Housing Strategy outlines how the Corporation will operate in the region over the two decades to 2029, the timescale needed to achieve long-term change, and how it will address the challenges facing the region. The Corporation will: accelerate the upgrade of the Auckland state housing portfolio to improve housing quality and provide warm, well ventilated and energy-efficient homes work in partnership with government agencies, community organisations, local authorities and the community to improve outcomes for Auckland communities of high social need where state housing dominates support Auckland s growth by promoting affordable housing supply and by better use of state housing and other social housing providers to meet projected higher levels of future demand. Māori Strategic Plan The Corporation s Māori Strategic Plan Te Au Roa has been created to help improve the housing outcomes of Māori. Te Au Roa defines the Corporation s commitment to improve Māori housing outcomes. The priority areas are to: develop and maintain strategic partnerships with iwi, Māori and other key stakeholders increase the effectiveness of delivery to Māori enhance the Corporation s capability to respond to Māori as customers. Housing Pathways The Housing Pathways approach provides a framework for the Corporation s interaction with its tenants, and involves working with applicants, tenants and other Corporation clients (such as people in the Welcome Home First Steps programme) to support them to improve their housing outcomes. It recognises that while people find themselves in need of social housing, changing life circumstances affect people s housing options and choices over time. The Corporation will maximise both applicant and tenant outcomes, and its ability to house those in the greatest need. The Housing Pathways approach will guide how the Corporation relates to, and engages with, tenants and communities. The Corporation has started identifying interventions such as the Housing Options and Advice Service that can help people to realise housing options over time as their circumstances change. The strategy will set the vision, outcomes and direction, and identify how the Corporation will operate in the future. The Auckland Housing Strategy outlines a staged implementation plan from Housing New Zealand Corporation - Statement of Intent 2009/10 21

24 Medium-term Information Housing Strategy for Pacific Peoples Pacific peoples have low home ownership rates compared with other New Zealanders. This is reflected in correspondingly high percentages of Pacific peoples renting privately and from the Corporation. Research also shows that there are higher levels of overcrowding in Pacific peoples households. The Housing Strategy for Pacific Peoples will provide a framework to deliver the right services and opportunities to meet the housing needs and aspirations of Pacific peoples. The strategy aims to deliver the following: Pacific peoples have access to good quality, suitable, affordable and stable rental housing. Pacific peoples have opportunities to achieve their home ownership aspirations. Pacific peoples and the Corporation understand each other. Pacific communities have strong and long-lasting relationships that enhance their housing outcomes. Asset Management Strategy The Asset Management Strategy provides a framework for the Corporation to manage its rental houses to meet social housing needs. The strategy sets out the key asset objectives and provides both short- and long-term strategies to help achieve the objectives. The objective is to reduce the risk that there will be unmet demand, by using a well-researched framework to manage the Corporation s assets. The two critical determinants of the asset response are the levels of current and future demand, and the market supply of housing. The Asset Management Strategy includes robust investment analysis so that rental cash flows and returns over the life of the asset guide the Corporation s asset configuration and determine how the Corporation will go about future divestments and acquisitions. Measuring progress against our outcomes The Corporation has identified a set of outcome indicators to track trends towards achieving the outcomes. The outcome indicators will allow the Corporation to assess the effectiveness of its services and activities in achieving its vision of working for New Zealanders by creating housing opportunities and strengthening communities. The indicators assess the outcomes for customers and, where possible, a comparison is made with outcomes for the general population. The indicators are influenced by the actions of the Corporation, the actions of other agencies and the socioeconomic environment. The Corporation will acknowledge the influence of these contributing factors when reporting on progress. The strength of the evidence linking housing activities to each of the Corporation s outcomes differs. However, in each case, there is compelling evidence to support the relationship. Indicators relevant to achieving the Corporation s outcomes are based on a number of established sources such as the University of Otago Wellington School of Medicine and Health Sciences, the Ministry of Social Development s Quality of Life Survey and the Corporation s administrative database. The following tables show the indicator, scope of the indicator, rationale and baseline measure against each outcome and indicator. This provides the final part of the line of sight between outputs (the goods and services provided by the Corporation) and outcomes (the impact of these goods and services on the Corporation s tenants and other customers). Measurable changes in society or groups of households happen incrementally over a number of years. Some of the outcome measures reflect established surveys that measure the whole population and allow for comparison of both the absolute and relative change in tenants circumstances. 22 This Statement of Intent is available to download from

25 A Outcome 1 Where the Corporation has a significant influence, people will have access to decent, affordable housing Outcome domain Indicator Rationale Baseline Healthiness and safety of housing stock Proportion of Corporation houses meeting the Corporation s Property Quality Standards Scope of indicator: Based on an inventory of asset quality against a pre-determined standard. Proportion of houses meeting this standard provides an indication of the Corporation s contribution to improving the health outcomes of tenants. There is a link between the quality of housing and the health and safety of tenants. A set of housingrelated illnesses has been identified where there is a proven causal link between illness and the quality of housing (eg dampness and prevalence of mould). Will be available in the second half of Outcome trend sought: increased proportion of Corporation houses meeting the Property Quality Standards; reduced proportion falling into the worst condition category. Source: Corporation administrative data (Initial Property Survey and Compliance Assessment) Hospitalisation rates Scope of indicator: Based on an annual age standardised rate per thousand of total contacts with the hospital. This will be refined to potentially avoidable, housing-related hospitalisations as soon as the data is available. Some hospitalisations result from illnesses, conditions and injuries that can be described as housingrelated. For example, an evaluation of the Healthy Housing Programme indicated a 37 percent reduction in potentially avoidable, housing-related hospitalisations following the Healthy Housing intervention. Data as at May 2003 June Will be updated in Tenants: 350 hospitalisation cases per thousand hospital contacts per year. Applicants: 400 hospitalisation cases per thousand hospital contacts per year. Other New Zealanders: 200 hospitalisation cases per thousand hospital contacts per year. Outcome trend sought: reduced hospitalisations per thousand hospital contacts for Corporation applicants and tenants, reducing the gap with other respondents. Source: University of Otago Wellington School of Medicine and Health Sciences (Health Impact of Social Housing study commissioned by the Corporation) Housing New Zealand Corporation - Statement of Intent 2009/10 23

26 Medium-term Information Outcome 1 Where the Corporation has a significant influence, people will have access to decent, affordable housing Outcome domain Indicator Rationale Baseline Housing fit Household crowding Scope of indicator: Based on percentage of Corporation applicant and tenant households that have a one, two or more bedroom deficit calculated using the Canadian National Occupancy Standard. Can be expressed based on households or people. Household crowding is a major risk factor for some infectious diseases and may contribute to poorer educational attainment. Current: crowding, as measured by the need for more bedrooms, has remained relatively constant between 2004 and 2007 as follows: Corporation tenants Households Individuals Extra bedrooms required Percent At least or more 6.5 At least or more 13.0 Corporation applicants NZ resident population Households Individuals Households At least or more 18.9 At least or more 24.0 At least or more 3.5 Match between Corporation housing stock type and household demand Scope of indicator: Indicates the level of alignment between the Corporation s housing portfolio and future applicant and tenant demand (geographical distribution and household characteristics). Matching of house to household affects the appropriateness of housing and can be a factor in under- or over-utilisation of housing stock. Outcome trend sought: reduced incidence of overcrowded applicant and Corporation tenant households and individuals, particularly in the 2 or more bedroom category. Source: University of Otago Wellington School of Medicine and Health Sciences (Health Impact of Social Housing study commissioned by the Corporation) and the Ministry of Social Development Social Report Baseline data will be available following the completion of the Corporation s Demand Forecasting project. The project includes a comprehensive data profiling of our tenant base, which differs significantly from the general population. Outcome trend sought: improved match between acquisitions and high-need applicants, by household type and location. Source: Corporation administrative data 24 This Statement of Intent is available to download from

27 A Outcome 1 Where the Corporation has a significant influence, people will have access to decent, affordable housing Outcome domain Indicator Rationale Baseline Housing fit (continued) Level of satisfaction with Corporation houses Scope of indicator: Quarterly telephone survey with tenants, which seeks feedback on their level of satisfaction with Corporation houses. This is a key indicator of how well the Corporation achieves the objective of providing good quality housing. Combined rolling average results over four quarters from Tenant Satisfaction Monitor (1,000 each quarter), National Contact Centre Monitor (300 each quarter) and Maintenance Contractor Monitor (1,200 each quarter). Q: How satisfied are you overall with the house and property you live in? Benchmark: 64 percent satisfied or better. Q: How satisfied are you overall with the standard Housing New Zealand maintains your home to? Benchmark: 55 percent satisfied or better. Outcome trend sought: increase in tenant satisfaction with house and property, and maintenance. Source: Corporation customer satisfaction research Housing options Number of households assisted into affordable homes Scope of indicator: This is a proxy for the contribution the Corporation has made in assisting families into housing appropriate to their needs. Qualitative information from the Corporation s longitudinal study of tenants and applicants will provide a contextual understanding of the drivers behind these satisfaction ratings, for example, understanding if there are communication issues, unrealistic expectations or lack of delivery etc. The Corporation assists households into homes directly (state houses) and indirectly through financial and educational initiatives. New state tenancies (achieved through the reletting of vacant properties and acquisition of new state houses): 7,584 per annum (2008 calendar year). Households assisted into home ownership (including Welcome Home Loans, Shared Equity Scheme): 897 per annum (averaged over 3 years). Households assisted into non-corporation sustainable renting (eg through Mangere Integrated Case Management Pilot): not collected nationally at present. Outcome trends sought: increase in households assisted into home ownership and sustainable, non-corporation renting. Source: Corporation administrative data Housing New Zealand Corporation - Statement of Intent 2009/10 25

28 Medium-term Information Outcome 21 Where the Corporation has a significant influence, people will live have in access safe, inclusive to decent, communities affordable housing Outcome domain Indicator Rationale Baseline Social cohesion Social connectedness in our tenant communities Scope of indicator: Quarterly telephone survey with tenants, which seeks feedback on their perceptions of their social connectedness. Social connectedness is an important goal (Social Report refers) in creating an inclusive society where people are able to access information and support. Q: Rolling average over four quarters from Tenant Satisfaction Monitor (1,000 each quarter). How satisfied are you that your neighbourhood is a neighbourhood where you and your family feel part of the community? Benchmark: 74 percent satisfied or better. Quality of Life 2006 and 2008 combined. 6.8 percent of Corporation tenants (n=368) and 3.44 percent of all other respondents (n=15,332) rated themselves as having a very low social connectedness Outcome trend sought: increased tenant satisfaction with community; decrease in tenants with very low social connectedness. Source: Corporation Tenant Satisfaction Monitor and Quality of Life Survey Safety from crime Perception of safety in our tenant communities Scope of indicator: Quarterly telephone survey with tenants, which seeks feedback on their perceptions of their safety in our communities. The Corporation can influence the perception of safety in communities by community renewal, urban planning and good neighbour policies. Q: Is your neighbourhood a safe place for you and your family to live in? Benchmark: 73 percent agree or strongly agree Quality of Life Survey may be used in the future as a point of comparison for the general population. Outcome trend sought: increased tenant rating of neighbourhood as a safe place to live. Source: Corporation Tenant Satisfaction Monitor 26 This Statement of Intent is available to download from

29 A Organisational health and capability New Zealanders expect the Corporation to strive for excellence, delivering exceptional customer service and providing value for money. The Corporation has started a programme of change to achieve its vision and outcomes, and to drive performance excellence. This encompasses a more innovative and broader focus on housing solutions, working closely with communities and other agencies to deliver housing services, and placing customer needs at the heart of those services. Operational efficiency and flexibility is required to manage the risk of undue pressure on frontline staff from an increase in applicants and in the waiting list. Increasing value for money A more focused, efficient and productive state sector will support New Zealand s economic recovery. The Corporation will continue to become more efficient and effective and deliver more from existing resources so that every taxpayer s dollar is well spent. The Corporation has already identified savings of $22.6 million in 2008/09 and $22.4 million in 2009/10 as part of a line by line review of its appropriated expenditure. In addition to the savings available from appropriations, the Corporation has identified a further $18.25 million before tax from its internal budget in 2008/09. The Corporation will undertake in-depth value for money reviews and maintain tight budget control. This will help to ensure any internal surpluses identified during the year can be either reallocated to high priority needs or included in the payment of a dividend to the Crown. The Corporation is placing an ongoing focus on areas of discretionary spending including active management of vacancies, and reducing travel. Value for money is an ongoing and permanent focus as the Corporation improves how it delivers services to New Zealanders. The Corporation will continue to reassess its services, products and policy initiatives against the Government s objectives. It will set tight, realistic budgets, manage within those budgets, and improve its ability to measure and report on performance. The Corporation will: identify savings, efficiency gains and asset utilisation improvements review its programmes and activities so that they are run in the most efficient way compared to alternative delivery methods and deliver measurable results review current practice around tenant behaviour exercise restraint in staffing in line with Government policy to cap the size of core government administration, so that priority is given to frontline services. In addition, the Corporation will work with the Department of Building and Housing and the Treasury in: reviewing the Corporation s balance sheet structure ensuring efficient use of the state housing asset developing appropriate efficiency and effectiveness indicators. The Corporation will deliver a gross operating profit, as a percentage of total assets, equivalent to a minimum of 0.53 percent in 2009/10. It will also focus on increasing value for money in operations and improving the quality of the portfolio. The Corporation will examine ways of improving the return on the Government s investment in state housing and will develop appropriate performance measures. The Corporation will include the results of this work within the 2010/11 Statement of Intent. Further detail will focus on the operating surplus and also other commercial and social returns to the Crown from the Corporation s management of state housing assets. Housing New Zealand Corporation - Statement of Intent 2009/10 27

30 Medium-term Information Performance excellence The Corporation has chosen performance excellence as its continuous improvement framework. The framework is based on the New Zealand Business Excellence Foundation model, which is aligned to and calibrated with the proven Baldrige Criteria. The Corporation will use performance excellence to develop excellence in strategy, business practices and stakeholder-related performance, and to benchmark itself against world best practice. The results of an initial baseline assessment of the Corporation s performance undertaken in 2008/09 will be used to establish priorities for improvement in 2009/10. People An organisational development strategy has been developed that focuses on building the required people capabilities to support the Corporation as a high performance organisation. The strategy focuses on three areas fostering the right culture, building leadership capabilities and developing skills to enable new ways of working, and to continually improve what we do. The strategy seeks to achieve three outcomes: an organisational culture that supports high performance, and community- and customer-centric ways of working staff with the right skills in the right place at the right time staff who are highly engaged, feel valued and are committed to the vision. To achieve these outcomes, the Corporation has identified three key strategies with priorities for 2009/10. Build leadership develop and enhance leadership and expertise continue to implement an employee engagement programme to improve results Develop skills develop and implement a learning and development framework to support staff in their roles implement workforce planning so the organisation s people capability is aligned to its business objectives Foster a supportive culture align the Corporation s core values and organisational culture to support new ways of working and for the delivery of innovative approaches to the Corporation s customers review and align performance management and remuneration systems. Measures are being identified and will be implemented over the next year to monitor progress against the three strategies. The Corporation is considering a series of measures around people capacity, capability and engagement. The Corporation will monitor its frontline and overall staff numbers against the 31 December 2008 target agreed with the Government. Increased organisational performance correlates with the level of employee engagement. In 2008, the Corporation undertook the Gallup Q12 TM Employee Engagement Survey, which resulted in a baseline measure. An improvement target of 5 percent over the 2008 grand mean score has been set for 2009, along with a measure that action planning is undertaken. A longer-term target is that by 2012, the Corporation will be positioned at or above the 75 th percentile of New Zealand state sector organisations. The Corporation is defining a range of people-related benchmark metrics to measure capability. These metrics will be based on a mix of specific surveys and traditional human resources metrics, and will include monitoring of unplanned turnover, vacancy management, unplanned absenteeism, learning and development investment, entry and exit surveys, job satisfaction and performance management. These measures will result in benchmarks being established. 28 This Statement of Intent is available to download from

31 A Health, safety and security The Corporation is committed to achieving excellence in health, safety and security performance. The health, safety and security of staff, contractors and customers are of utmost importance and will not be compromised. The Corporation is dedicated to working towards an accident-free workplace. In order to achieve this goal, the hazards present in our work environment must be identified and effectively managed. This is best achieved through a systematic approach that supports the Corporation s safety culture and business activities. The Corporation has adopted a Health, Safety and Security Management System Framework that is aligned to national and international standards. This framework is central to achieving excellence and continuous improvement in health, safety and security performance. The pursuit of continuous improvement through best practice includes the remodelling of office premises and the adoption of technology to better manage security risk where it is most needed. Underpinning physical security upgrades is a national security training programme so that all frontline staff are aware of and equipped to manage the day-to-day challenges they face. Information systems and technology The Corporation s computer systems are past their expected lifespan. They are overdue for replacement and require redevelopment and potentially a complete rebuild. Other business systems and processes also pose risks. The current tenancy and asset management system is outdated. It needs to be replaced before service delivery is compromised and to provide better performance. Other risks include inconsistent information, inefficient and ad hoc manual processes, and reduced reporting capacity on Corporation activities. The Corporation is acting to reduce the risk that current business processes and computer systems will constrain a more customerfocused, flexible and effective delivery approach. A business case is being developed, within current budget limits, and will be agreed in Requests for proposals for an integrated technology solution have been sought, and the Corporation is currently in the second phase of the tender process and business diagnostic. A core part of this programme of change, the Enterprise Transformation Programme, is under way. It will identify and implement necessary changes to business processes and seek the integrated software to support this change. Improvements to documents and records management are also planned to assist with compliance with the Public Records Act 2005, as well as business intelligence capability and customer service. Following a successful pilot, Corporation-wide implementation will start in the 2009/10 financial year. Other improvements, including an enterprise data warehouse, will deliver better customer service, increased support for frontline staff, improved business information, increased responsiveness to customers changing needs, and reduced costs and risk. Housing New Zealand Corporation - Statement of Intent 2009/10 29

32 Medium-term Information Risk management The Corporation has adopted a risk smart culture that includes the early identification and analysis of risks to inform planning decisions. Part of the Corporation s planning and risk reporting approach is to provide for early warning of potential adverse outcomes. The Corporation identified and prioritised the key risks relative to the delivery of the strategic priorities outlined earlier. A further key risk mitigation strategy adopted by the Corporation was the development of a risk-based, 3-year internal audit plan by the Board s Assurance Committee. The following table outlines these risks. A consistent approach for assessing the likelihood and consequences of risk events occurring has been developed. The Corporation s processes for achieving its risk management culture include the Board s risk management policy, the documented degree of risk the Board will tolerate in pursuit of delivering the strategic priorities, and a 3-year risk management work plan. The Corporation s key risks Risk Gap in the Corporation s ability to deliver owing to the Government s and the Board s expectations expanding beyond funding levels Service failure caused by the Corporation s inability to meet increasing service demand owing to: increasing demand through economic conditions new Government initiatives with tight timeframes the Corporation s inability to realign resources within short timeframes constraints in existing Corporation policies failure to correctly apply existing Corporation policies and procedures Management Strategies Realignment of resources Value for money improvements Communication/relationship management Improving housing affordability for low- to middle-income earners Developing a Housing Options and Advice Service Communication/relationship management Realignment of resources Value for money improvements Portfolio management Frontline management response Improving housing affordability for low- to middleincome earners Developing a Housing Options and Advice Service Risk Management Framework 30 This Statement of Intent is available to download from

33 A Risk Houses may be unhealthy for tenants, which may result in unacceptable health issues. This risk includes the capacity of the asset improvement programme to keep ahead of the worsening condition of the housing stock Failure to revitalise communities with high concentrations of social housing where those communities are not functioning effectively Inability to keep pace with tightening market conditions, including the current credit crunch, and being exposed to private sector risks with public sector funding/accountability Funding levels may not enable the Corporation to maintain housing stock to agreed property quality standards Maintenance budget may be insufficient to maintain standards and levels of service Corporation staff, contractors or tenants sustain intimidation or physical injury due to inappropriate tenant and/or third party behaviour Management Strategies Upgrade existing homes Maintain and manage the portfolio Strategic advice to Government upgrade versus acquisition Reprioritise total funding Asset Management Strategy Long-term Asset Management Plans Government Jobs and Growth fiscal stimulus package Community Renewal Programme Improving housing affordability for low- to middle-income earners Developing a Housing Options and Advice Service Tenancy management process Development of Tamaki and Hobsonville models Frontline management response Asset programme contingency planning Review of leasing programme Adding to the property portfolio Government Jobs and Growth fiscal stimulus package Government Jobs and Growth fiscal stimulus package Better defining the standards and levels of service Value for money improvements Improving housing affordability for low- to-middle income earners Developing a Housing Options and Advice Service Asset Management Strategy Health, Safety and Security Management System Framework Organisational Development Strategy Customer Risk Indicator Project Housing New Zealand Corporation - Statement of Intent 2009/10 31

34 Medium-term Information Physical assets and capital intentions the state housing portfolio The Corporation manages, maintains, upgrades and grows the state housing portfolio on behalf of the Crown to achieve the Government s social objectives. State housing is the second largest Crown asset with about 66,000 state homes (the housing portfolio, excluding leased houses) and land valued at $15.1 billion as at June Rental properties were valued at $6.6 billion, and the freehold land at $8.5 billion (including the sections occupied by state houses). The following section outlines the challenges facing the Corporation in managing the state housing portfolio, the Asset Management Strategy and associated activities it is pursuing in response and, finally, how the Corporation will measure and report on whether it has met these challenges. Asset challenges The Corporation faces challenges to meet future housing need. An ageing housing stock Housing upgrades involve improvements such as ventilation, insulation, energy efficiency retrofits, renewing bathrooms and kitchens, painting and re-carpeting. The Corporation is responsible for the cost of maintaining and upgrading about 66,000 owned houses. The Corporation s portfolio is a mix of old and new, including houses built before 1940 (3 percent of houses) and post-2000 (7 percent). The majority are over 30 years old, built between 1940 and 1960 (31 percent) and 1960 and 1980 (37 percent). They are built from a range of materials and have been upgraded at different times over the years, affecting the upgrade requirements of each house. The challenge for the Corporation is twofold: the Corporation has deferred upgrades over time and has a significant backlog of immediate and major upgrades; and the nature of tracking what is needed for each house and phasing of upgrades across 66,000 houses is complex. Upgrading is an ongoing activity, with upgrades required at different stages of the economic life cycle of a house to maintain the standard over time. The extent of each upgrade varies. It is currently estimated that about $2 billion of upgrade activity is needed to bring the current portfolio up to a modern but modest standard. The Corporation is accelerating upgrade activity over 2008/09 and into 2009/10. In 2008/09, the Corporation partially or fully upgraded over 5,000 houses (8 percent of the portfolio). In 2009/10, the Corporation is expected to upgrade about 13,000 houses (20 percent of the portfolio). By the end of 2009/10, about 28 percent of the housing portfolio will have had some form of upgrade in the preceding 2 years. The increased level of upgrades in 2009/10 will reduce but not eliminate the total upgrade backlog. Energy efficiency retrofits, however, will be completed in Mismatch of housing to demand A large proportion of older state houses are the wrong size and type to meet the increasing demand of smaller and larger households. There is also a mismatch between the areas of greatest housing demand and the location of many state houses. The Corporation needs to replace three-bedroom houses with some more four- to six-bedroom houses, and many more one- and two-bedroom houses. Acquiring housing in a challenging economic climate The housing market has slowed and economic conditions have deteriorated. Developers are less able to finance building and some developments have stalled. This makes it difficult for the Corporation to find suitable development partners. Sales to tenants will not generate sufficient revenue to maintain stock numbers and will result in an increased reliance on leased houses. 32 This Statement of Intent is available to download from

35 A Asset response Asset Management Strategy The Corporation is required to prudently manage the housing stock and to chart a strategic direction for investment over the long term. It is challenging to match an asset response to the changing needs of tenants. Each year, there are proportionately few additions and disposals compared with the total portfolio of 69,000 owned and leased houses. To meet this challenge, the Corporation undertakes a range of strategic planning and analytical activities over different time horizons under its Asset Management Strategy. This includes a long-term capital plan to develop the Corporation s long-term view, short-term asset responses within a 3-year time horizon, and annual reviews of these plans. These strategies cover how and where the Corporation will add to the portfolio, undertake maintenance and upgrades, and sell and redevelop existing housing and land. Redevelopments range from single section subdivisions to longer-term, larger-scale revitalisation of suburbs. To improve capital planning, the Corporation is involved in the Treasury-led Capital Asset Management process. The Corporation completed a core standard submission in October To achieve a higher level of compliance with the Treasury s guidance and more advanced capital planning, the Corporation will: develop a more systematic approach to performance monitoring and analysis attain the next moderate standard of compliance, to be delivered to the Treasury in September 2009 develop more robust risk management including disaster recovery and business continuity plans. Expenditure intentions and activities There are four areas of focus within the Asset Management Strategy: adding to the portfolio of properties owned by the Corporation including redevelopment projects managing existing houses upgrading existing houses divesting houses that no longer meet needs. Expenditure in each of these areas is summarised in the following table: Expenditure Intentions Adding to the portfolio Community Renewal/ Auckland Pensioner Housing Replacing divested properties Managing existing houses Upgrading existing houses 2009/10 Forecast $m 2010/11 Forecast $m 2011/12 Forecast $m Divesting properties (30) (26) (25) Total Housing New Zealand Corporation - Statement of Intent 2009/10 33

36 Medium-term Information Measuring the asset response Accruing assets is an intermediate output; that is, providing houses of an adequate standard for the final Output Class of creating state tenancies. The following text further describes the activities taken under each intermediate sub-output followed by a table of measures for each sub-output. Adding to the housing portfolio (Corporation) Adding new houses to the existing property portfolio involves: purchasing existing houses (including from new housing developments); building new houses; leasing privately owned houses; and purchasing land for building houses in the short to medium term. Adding houses includes any initial upgrade and changes to newly acquired properties to make them suitable for social housing purposes and community-based organisations. It concludes when the houses become available for allocation, at which time management of the asset transfers to Managing existing houses (Corporation). Leasing houses from third parties includes negotiating terms and conditions of leases with the owners (private, community-based organisations and the Crown, held under the Housing Agency Account). Performance Information Adding to the housing portfolio (Corporation) 12 Measure Standard 2009/10 Standard 2008/09 Net additions to the state housing portfolio (excluding leased units) new houses available for tenants: by 30 June 2010 including: state housing acquisitions Community Group Housing acquisitions by 30 June 2011 by 30 June 2012 The profile of net units to be added to the portfolio reflects a total target over 3 years. Net additions to the state housing portfolio (leased units only) by 30 June 2010 by 30 June 2011 by 30 June 2012 Location and configuration of new houses new land holdings will be in areas identified in the Asset Management Strategy as high-demand localities Housing quality new houses will meet the Corporation s specifications, design guides, and generic design briefs prior to becoming available for tenants units 30 units/$9 million 9 13 units/ $5.8 million (15) 15 units (15) 15 units units units units At least 95 percent At least 95 percent s s 12 In the 2007/08 Annual Report, the Corporation showed managed stock at 30 June 2008 of 68,644 units. In 2008/09, this is expected to increase by units to give a total opening managed stock for this Statement of Intent of 69,169 69,199 units. 34 This Statement of Intent is available to download from

37 A The Corporation expects a continuing shortfall in its purchase of houses in high-demand areas and in its ability to offset this with sales in low-demand locations, including the redevelopment of under-used housing and the replacement of houses sold to tenants. Sales of state housing to tenants will be based on ability to purchase. Although policy is yet to be finalised, sales will provide an opportunity for the Corporation to reinvest in areas of high demand. If the houses sold are of lower value, it will be a challenge to replace the housing stock sold. Managing existing houses (Corporation) Managing the existing portfolio of houses owned by the Corporation to maintain its current amenity value includes: meeting routine/ongoing holding costs; meeting legislative requirements; undertaking planned maintenance programmes; and setting (and reviewing) market rents. Management of the existing portfolio includes the ongoing management of leased houses and meeting the Corporation s obligations under lease agreements. Managing existing houses is undertaken up to the point where a decision is made to divest, or change the status or configuration of specific assets, at which time management of the asset transfers to Upgrading existing houses (Corporation), Divesting properties (Corporation) or Housing redevelopment projects (Corporation). Performance Information Managing existing houses (Corporation) Measure Standard 2009/10 Standard 2008/09 Investment in planned maintenance planned maintenance programme Housing quality houses maintained consistent with the Corporation s specifications and maintenance standards $135 $145 million 19,200 20,800 units At least 88 percent of portfolio will have 9 or fewer defects s Rent management benchmark rents consistent with market rents Updated quarterly Development projects Property Quality Standards development and progressive implementation of Property Quality Standards, including the Decent Home Standard and supporting information during 2009/10 Housing New Zealand Corporation - Statement of Intent 2009/10 35

38 Medium-term Information The Corporation will continue to undertake urgent and planned maintenance arising from both normal wear and tear, and damage. The Corporation s maintenance is undertaken in accordance with its Asset Management Strategy and to comply with legislation and regulations and the Corporation s policy standards. Upgrading existing houses (Corporation) The upgrade of individual housing assets to improve the amenity value of Corporation houses to a level that is suitable for social housing, for both current and future tenants, includes: altering existing Corporation houses by, for example, changing the number of bedrooms to better meet need; and upgrading internal service areas such as living areas, kitchens, bathrooms, toilets and laundries to provide improved amenity. Upgrades are undertaken up to the point that the housing assets become available for allocation or existing tenancies are restored to uninterrupted occupation, at which time management of the asset transfers to Managing existing houses (Corporation). Performance Information Upgrading existing houses (Corporation) Measure Standard 2009/10 Standard 2008/09 Energy Efficiency Retrofits general retrofits to properties (funded by appropriation) Energy efficiency heater installations Energy Efficiency Retrofits and heater installations general retrofits to properties and heater installations (funded by appropriation) Upgrades: Healthy Housing households assisted Jobs and Growth fiscal stimulus package Healthy Housing Jobs and Growth fiscal stimulus package operating Jobs and Growth fiscal stimulus package capital Auckland Pensioner Housing Upgrades: Healthy Housing - appropriation and Ministry of Health funding - Jobs and Growth fiscal stimulus package Upgrades: - Jobs and Growth fiscal stimulus package operating - Jobs and Growth fiscal stimulus package capital Auckland Pensioner Housing 6,000 6,250 1,100 1, $21.5 $25.5 million $6.5 million 1,250 1, ,800 2,000 6,000 6, $15 million $6.5 million $20 million $65 million $8 million s s This Statement of Intent is available to download from

39 A Performance Information Upgrading existing houses (Corporation) continued Measure Standard 2009/10 Standard 2008/09 Upgrades under way milestones specified for upgrade projects met At least 90 percent Housing quality upgrade work consistent with Corporation specifications, design guides and generic design briefs Development projects: At least 95 percent Compliance assessment survey of all units in the Corporation s portfolio completed by 30 June 2010 The Corporation will upgrade houses to make tenants homes safer, warmer and drier, and to raise the standard of amenities to meet the needs of modern households. There has been a positive shift in the Corporation s approach to upgrades, reflected in stronger performance measures above to differentiate immediate upgrades (for example, a new carpet only) from significant upgrades (for example, new kitchen, bathroom, carpet and other flooring). A higher proportion of houses in South Auckland fall below the Corporation benchmarks, and upgrading in these areas of deficit will take a higher priority. The Corporation will increase its upgrade programme using funding from the Government s Jobs and Growth fiscal stimulus package. Divesting properties (Corporation) Divesting properties involves preparing existing properties for divestment, including through sale and demolition. This includes taking all actions necessary to meet the statutory obligations that the Corporation has with respect to the disposal of surplus properties. Divestment begins at the point that a property is available for divestment, and includes fulfilling all holding and maintenance obligations, and meeting all related costs, until the sale or demolition is concluded. Performance Information Divesting properties (Corporation) Measure Standard 2009/10 Standard 2008/09 Divestments consistent with Asset Management Strategy work programme: revenue-generating sales non-revenue generating disposals (demolitions) Development projects: $28 $32 million units units s Implement sales of state houses to tenants policy developed by 1 July 2009 Housing New Zealand Corporation - Statement of Intent 2009/10 37

40 Medium-term Information The Corporation will continue to sell houses that are no longer appropriate or needed for social housing. Disposals include the demolition of houses to facilitate land redevelopment. Corporation houses in high-value locations may be sold to free up capital for investment in high-demand areas. The Corporation will identify suitable land for development to provide Gateway Housing Initiative opportunities. Housing redevelopment projects (Corporation) Housing redevelopment projects involve the delivery of new or upgraded houses, the development of infrastructure, and managing the impact on the community. Housing redevelopment projects are medium- to long-term projects that have a focus beyond housing, and involve other central government agencies, territorial authorities, private sector entities, non-government organisations and local communities in undertaking comprehensive redevelopment of geographically defined areas. Housing redevelopment projects involve adding new properties through combinations of: purchasing houses to be included in a redevelopment project upgrading existing houses divesting unsuitable or otherwise surplus houses demolishing existing houses in preparation for redevelopment developing the infrastructure to support new sites. Redevelopment projects also require active engagement with members of local communities to clarify needs, gain and retain support for the projects, and build the capacity to sustain strong communities. Performance Information 13 Housing redevelopment projects (Corporation) Measure Standard 2009/10 Standard 2008/09 Redevelopment projects under way Projects general Community Renewal Programme upgrades and redevelopments Milestones completed or properties available major redevelopment projects: McLennan Tamaki strategic acquisitions completed properties refurbished Housing quality new properties meet Corporation specifications, design guides and generic design briefs units houses Resource consent applications lodged 5 40 At least 95 percent s s 13 Note that these numbers have already been included in other areas, eg new acquisitions, upgrade work. This table is showing the component allocated to these specific projects. 38 This Statement of Intent is available to download from

41 A Physical assets and capital intentions organisational property and equipment The Corporation manages more than $29 million worth of physical assets throughout New Zealand, including cars ($7 million), information technology ($15 million), furniture and equipment ($3 million) and leasehold improvements ($4 million). The Corporation is committed to ongoing improvement of facilities by: occupying appropriate premises that are located to meet business demand relocating premises as necessary improving existing facilities to provide safe, secure and pleasant work surroundings for both staff and customers. Motor vehicles Motor vehicles are replaced no later than 5 years or 100,000 kilometres. The Corporation s replacement cycle is based on achieving cost effectiveness, motor vehicle safety and fuel efficiency. The purchase of vehicles will meet government procurement guidelines. Information technology The Corporation manages $15 million worth of information technology assets. The Corporation s information technology intentions are discussed under Organisational Health and Capability. Leasehold improvements The Corporation operates out of 48 leased locations nationwide and has a presence in a further 63 locations (mostly premises shared with other government and community agencies). The Corporation will continue to rent properties in appropriate locations and environments to support our service delivery, including providing new community link sites where a need is identified. Furniture and equipment Only furniture with a 10-year-plus life span is purchased to meet the needs of customers and staff. Sustainable timber and fabrics are specified, and health and safety issues are factored into the decision making. Essential replacements of copiers, fax machines and other machinery are being carried out over the next 2 years. Housing New Zealand Corporation - Statement of Intent 2009/10 39

42 Medium-term Information Consultation and reporting to the Minister As an advisor to the Government on housing and housing-related services, the Corporation regularly engages with the Minister of Housing and the Corporation s monitoring agency, the Department of Building and Housing. The Corporation will consult the Department on funding requests, financial risks or performance concerns. The Corporation will report quarterly to the Minister of Housing and the Minister of Finance on: delivery against the Statement of Forecast Service Performance, including the Housing Agency Account and the Hobsonville Land Company performance against all the main financial and nonfinancial targets set out in the Statement of Intent progress against the Minister of Housing s strategic priorities organisational capacity and capability. The Corporation will also report to the Ministers on: The Corporation will also: respond promptly and fully to requests from ministers for information about the Corporation meet deadlines for planned reports from the policy work plan (attached to the 2009/10 Output Agreement) and the Statement of Forecast Service Performance report on New Zealand and international housing trends and developments prepare and provide a Statement of Intent to ministers, with the content and process in line with sections 138 to 149 of the Crown Entities Act 2004 provide a list of information requested by ministers and reports identified in the schedule to the 2009/10 Output Agreement. the Property Quality Standards framework in 2009/10 the upgrade of Wellington City Council social housing infrastructure implementation as required by Cabinet the Asset Management Strategy for 2009/10 the long-term capital plan, including expenditure associated with the Corporation s Information Technology Investment (Enterprise Transformation Project). 40 This Statement of Intent is available to download from

43 Annual Information B Annual Information Housing New Zealand Corporation - Statement of Intent 2009/10 41

44 Annual Information B Annual Information Statement of Responsibility 43 Statement of Forecast Service 44 Performance Introduction 44 Summary of output expenses 44 Output Class 1: Advisory Services 45 Output Class 2: State House Tenancies 47 Output Class 3: Policy Advice 49 Output Class 4: Financial Assistance 51 Housing Output Class 5: Property Management 54 Agency Services Statement of Forecast Financial 56 Performance Forecast financial highlights for 2009/10 56 Forecast financial statements 57 Statements of underlying assumptions 61 Statement of accounting policies 67 Appropriations This Statement of Intent is available to download from

45 Annual Information B Statement of Responsibility The information in this Housing New Zealand Corporation Statement of Intent is for the year ending 30 June In signing this statement, as the Corporation s Chair, I acknowledge my responsibility for information contained in it. The forecast service performance for each Output Class is agreed with the Minister responsible for Vote: Housing, administered by the Department of Building and Housing. The forecast financial performance statements are as agreed with the Minister of Housing, who is responsible for the Corporation s financial performance. The information contained in this Statement of Intent is consistent with existing appropriations, and with the appropriations set out in the Appropriation (2009/10 Estimates) Bill. Signed: Countersigned: Pat Snedden Chair Lope Ginnen Deputy Chair 12 May May 2009 Housing New Zealand Corporation - Statement of Intent 2009/10 43