Kāinga Ora lists $20m Albany site after scrapping ‘twin towers’ housing plan
A large vacant site purchased by Kāinga Ora eight years ago for nearly $20 million with grand plans for a “twin towers” housing development is back on the market without a single house being built and more than $1.2m of taxpayer dollars sunk on the defunct project.
The 2018 purchase was the subject of a protected disclosure to the Ombudsman by a concerned Kāinga Ora staffer who alleged financial mismanagement of public funds and later left the agency with a confidential payout.
The 1.6ha Albany site is on Don McKinnon Drive, just a short walk from the Albany commercial centre and North Shore District Court.
Kāinga Ora paid $19.255m for the parcel of sloping land with the aim of building hundreds of apartments to accommodate scores of vulnerable social housing tenants.
However, the agency ditched the plans several years ago due to escalating costs. The land has since sat empty while the state housing provider decided on its next move.
In a statement posted to Kāinga Ora’s website last month, the agency announced it had listed the land for sale, “creating opportunities for new development in a prime commercial and residential location”.
“When we look at our overall property portfolio, it doesn’t make economic sense for us to develop social housing on this land, but others will see the broader development potential in this prime location,” said Nick Howcroft, Kāinga Ora general manager of urban development and delivery.
Howcroft told the Herald offloading the land would create opportunities for other developers. The sale proceeds would be reinvested into new, modern homes “that better meet tenants’ needs”.
Concept and preliminary design work already completed by Kāinga Ora would be provided to the purchaser as part of the sale, Howcroft said.
Figures released to the Heraldunder the Official Information Act show that in addition to the purchase price, taxpayers have forked out more than $1.2m on consultants, architectural services, legal advice, valuations, arborists, mowing, geotech reports and council rates.
The actual costs are likely to be considerably more, but the agency did not reveal internal staff costs associated with the project, saying these weren’t recorded.
Asked about the project, Housing Minister Chris Bishop said specific developments were operational matters for Kāinga Ora.
But he said this was an example where millions of dollars had been spent on a vacant site “that ultimately did not make sense to develop”.
“Our turnaround plan is working, and Kāinga Ora is now delivering lower build costs, a strong renewals programme, less rental debt, and higher tenancy satisfaction.”
Housing plans no longer ‘financially viable’
In 2024, Kāinga Ora confirmed that its initial plans for the site – which at one point included two huge apartment blocks dubbed “the twin towers” – had been scrapped after escalating costs rendered them no longer “financially viable”.
The agency was then “considering all available options for the future of the site”, which could include offloading it to developers or a reimagined housing plan with a lower yield “to make the proposition more affordable”.
The decision to sell the land comes after a damning 2024 report by Sir Bill English found Kāinga Ora had exploited easy access to government credit without giving sufficient heed to fiscal discipline.
In response, Kāinga Ora announced a reset plan last year to improve financial sustainability, which included canning hundreds of social housing projects and offloading 20% of its vacant land.
It is also selling its most valuable state homes to reinvest in more affordable housing.
Nearly 20,000 New Zealanders are currently on the state housing waiting list.
The initial plan for the Albany land had been for 186 units across eight apartment blocks of three to five storeys at a cost of about $104m.
Those plans later morphed to a higher-density development including 19- and 23-storey towers featuring several hundred units, before the project was scrapped.
The property is being marketed by Bayleys and is to be sold by deadline private treaty.
The 2018 Don McKinnon Drive purchase was the subject of a protected disclosure to the Ombudsman in 2023.
The whistleblower alleged Kāinga Ora had paid well above market value for the land and that the envisaged twin towers development was never financially viable and likely to result in a ghetto.
The staff member who made the protected disclosure left Kāinga Ora following a confidential settlement.
Lane Nichols is Auckland desk editor for the New Zealand Herald with more than 20 years’ experience in the industry.