The final stage of a large-scale Kāinga Ora housing development in Rotorua is “now under assessment” as the agency realigns spending in response to a new government direction. 

Kāinga Ora bought a 20,000sq m site on the corner of Malfroy Rd and Ranolf St for $6.45 million in June 2021 for a staged housing development. 

The first stage was for 37 homes, including 25 stand-alone homes which were built off-site. This was followed by the construction of three sets of four one-bedroom units - 12 homes in total - which are under way and due to be completed by the end of this year. 

However, Kāinga Ora confirmed the final stage of the development - construction of a further 24 consented apartments was “now under assessment” as the agency aligned its building programme “with Government funding and the direction set through the Public Housing Plan”. 

What new three-storey Kāinga Ora apartments on the corner of Ranolf St and Malfroy Rd proposed to look like. Photo / Supplied 

Another large-scale Kāinga Ora housing development 400m away on Victoria St for 36 homes by early 2026, is going ahead. 

Kāinga Ora Bay of Plenty regional director Darren Toy said Rotorua had 103 new homes under construction and more than 150 contracted to be delivered by the end of June 2025. 

“All contracted work with construction already under way is still going ahead.” 

A report on Kāinga Ora released at the end of last month found the housing agency was facing annual deficits of $700 million. 

Led by former Prime Minister Sir Bill English, the report found Kāinga Ora exploited its easy access to Government credit, bingeing on borrowing without giving sufficient heed to the fiscal discipline taking on such immense debts would require. 

Housing Minister Chris Bishop said the report found Kāinga Ora was “not financially viable without significant savings as well as funding and financing changes”. 

What the container homes look like now and an artist's impression of what they will look like when finished. Photo / Andrew Warner 

Prior to the report being released, Toy said the Ranolf St and Malfroy Rd apartments were on “a complex site” but challenges had been resolved and the project was on target to start construction in the next few months. 

Bishop and Associate Housing Minister Tama Potaka were asked by the Rotorua Daily Post if Kāinga Ora’s decision to put the Ranolf St and Malfroy Rd development “under assessment” was in contrast to MPs saying last month that 330 homes would still be delivered in Rotorua by June. 

Bishop said questions about specific developments were operational matters for Kāinga Ora. 

“At any point in time there will be a range of projects being rephased or paused or not proceeding due to a range of factors. The Government is investing in social housing for New Zealanders in need of a warm dry home.” 

Rotorua MP Todd McClay said he had not been made aware the Ranolf St and Malfroy Rd development was under assessment and nor did he expect to be 

“Kāinga Ora has been asked to do a review of its funding to make sure it’s appropriate and not wasting money.” 

The steel homes as they look today on the corner of Ranolf St and Malfroy Rd. Photo / Andrew Warner 

McClay said it was now clear the previous Government and Kāinga Ora had spent a lot of money and taxpayers deserved to know money was now being well spent. 

“There shouldn’t be a blank chequebook just because we need houses.” 

Referring to the history of the Malfroy Rd and Ranolf St site, McClay said if the private sector struggled to make the “books add up”, Kāinga Ora needed to look at its spending. 

Kelly Makiha is a senior journalist who has reported for the Rotorua Daily Post for more than 25 years, covering mainly police, court, human interest and social issues.