The new Government is stepping up the campaign to sell off its stock of state houses.
Finance Minister Bill English said governments and councils were not good owners of social housing and new ways need to be found of meeting people's needs.
The Government's 69,000 state houses are worth about $17 billion, but it has indicated it's keen to increase the number of non-government agencies providing social housing.
At present, local councils own 11,000 social housing units and community agencies about 5,000.
Listen to Bill English and Bill Hiku on Nine to Noon
Mr English, who was given responsibility for Housing New Zealand in National's third-term Cabinet announced yesterday, said some properties will go to organisations that already provide social housing.
Bill English Photo: RNZ
The Government had set a target of non-Government agencies providing 20 percent of social housing, but Mr English told Nine to Noon it would be happy to increase that amount.
"I suspect what will happen is that some of these groups will get together into consortia where they'll get involved with construction companies or with financiers so that they can move to a bit more scale than another hundred houses or another two hundred houses."
Mr English said it was not so much about targeting a particular number, but getting more dynamism in the provision of social housing.
"Housing Corp has done its best with the policy settings governments have given them over the last twenty or thirty years.
"But you've just got to drive round the countryside, or round the cities and suburbs to see that it hasn't always had the best results. So we just want to get more people helping us to solve the problem of serious housing need."
The minister expects intense commercial discussions over the next six months with providers, who are saying it costs much lot more to run the houses than the government thinks, and that they will need a bigger subsidy or to buy the houses at a discount. "That's a legitimate negotation position," he said.
Cannons Creek Residents and Ratepayers Association chairman Bill Hiku said he was concerned by Mr English's comments at a time when there is a huge need for social housing.
Mr Hiku said he knew of people forced to stay with friends or under bridges because there was no hope of getting a state house.
Social services director for the Salvation Army, Major Campbell Roberts, is open to the idea of the sale of state houses but would not support putting them on the open market.
"We, at the present in New Zealand, don't have enough social housing, so to reduce that number further would be a major problem," he said. "What there needs to be is an increase in the numbers of social houses."
Child Poverty Action Group co-convenor Alan Johnson said a transfer would not address the wider problem of not enough social housing.
Reviews to continue
Paula Bennett Photo: SUPPLIED
New Social Housing Minister Paula Bennett said people would will continue to be moved out of state housing to free up accommodation for those genuinely in need.
The Government has been reviewing tenancies and asking people who can afford it to move into private-sector accommodation.
Listen to Paula Bennett
Ms Bennett told Morning Report the reviews will continue as the Government tries to find homes for those on the waiting list.
"We've also got people living in state houses that shouldn't be - at the end of the day they're paying market rents, they are able to sustain private rental and there's this expectation that the house will be theirs for life."
Ms Bennett said the Government also wants to encourage an expansion of community housing.