The development on Bonair Crescent in the Auckland suburb of Millwater has been controversial since the beginning. Photo:
Kāinga Ora has given up on a controversial social housing development in Auckland, saying is no longer financially viable.
The development on Bonair Crescent in the northern suburb of Millwater has been controversial since the beginning, with the state landlord earlier apologising for "missing a step" and not opening the project for community consultation.
The development was initially the construction of two-storey townhouses on Millwater Street and would add 37 two-bedroom units to the social housing list.
However, after complaints and a petition from the community against the social housing development, Kāinga Ora paused the construction before it even started.
In December, the state landlord said it decided to take a "wider look" in the region.
In a statement sent to RNZ on Thursday, Kāinga Ora deputy chief executive for Auckland and Northland Caroline Butterworth said delivering public homes in that area was no longer financially viable, and the state landlord was going to sell the land.
"Costs facing builders and developers across the country have risen significantly and the economic environment and property market have changed since Kāinga Ora purchased this land in 2020.
"We need to make sure we're investing in the right places, at the right time - and this investment no longer stacks up."
The cost of building materials and labour had gone up by nearly 40 percent since Kāinga Ora bought the land, Buttterworth said.
"And our preferred construction methodology does not suit the site. When we looked again at the project, it was not the most cost-effective option to build public housing on the land.
"Selling the land makes the best economic sense in the current environment.''
She said Kāinga Ora remained committed to exploring opportunities to increase the supply of public housing in the Hibiscus and Bays Local Board area.
"The feedback we have received from the local community over the past 18 months will be kept in mind when we weigh up future opportunities for increasing the public housing stock."
Kāinga Ora was "investing heavily" in public housing across Auckland and had 2005 homes under construction, Butterworth said.