The withdrawal of another community housing provider is the next nail in the coffin for the government's state housing sell-off, the Labour Party says.
Photo: RNZ / Alexander Robertson
Habitat for Humanity has pulled out of the tendering process, saying it would be too big a job to manage.
The government wants to transfer several hundred houses in Tauranga and Invercargill into joint ownership.
Habitat for Humanity chief executive Claire Szabo said it currently had about 200 houses in its portfolio and the scale of what the government wanted was out of its depth.
"To take on this size of a portfolio is very significant, it would change the shape and the flavour of our organisation," she said.
"So you want to make a very careful judgement before you step into a project I guess of that size. But we've been thinking our way through that and we've decided not to continue."
Phil Twyford Photo: RNZ / Alexander Robertson
Labour housing spokesperson Phil Twyford said Habitat was taking the same stance as the Salvation Army and the Methodist Mission.
"It's not really a serious effort by the government to build up the community housing groups," he said.
"What the government wants to do is privatise billions of dollars of land and housing and the community housing sector were basically used as a kind of window-dressing for this policy."
Mr Twyford said few community housing groups could make the commitment, which he said was what the government wanted.
He said it was more interested in selling the houses to Australian companies, merchant bankers and property developers.
The Salvation Army announced in March that it did not have the resources to buy any of the state houses under the hammer.
At the time, Prime Minister John Key said plenty of other groups were expressing interest in the government's plan.