The scheme ultimately failed in 1906 when the workers could no longer afford to pay the high rents asked by the Government for the properties.

On 20 May, Prime Minister Christopher Luxon and Housing Minister Bishop announced on a multi-year revamp of the agency including replacing the leadership board, realigning contractual arrangements across Kāinga Ora and community housing providers, simplifying the agency's directive and requiring the new leadership board to develop a plan to improve financial performance and reduce losses.

Simon Moutter, the former chief executive of Powerco, Auckland International Airport and Spark New Zealand, was appointed Kāinga Ora's new board chair, effective 4 June 2024.

[14] On 21 May, Newshub reported that the Government would scrap Kāinga Ora's NZ$60 million first-home grant programme and redirect the money towards social housing as part of the 2024 Budget.

[15] On 1 July 2024, Kāinga Ora CEO Andrew McKenzie resigned due to disagreements with the Government's overhaul of the housing agency including reducing its scale and accountabilities.

In November 2021, Kāinga Ora drew controversy after Newshub and Radio New Zealand reported that the agency had used Labour Party candidate Arena Williams in a taxpayer funded advertisement in 2020, compromising its political neutrality.

Kāinga Ora drew criticism from Housing Minister Megan Woods and National Party Nicola Willis on the grounds of professionalism and compromising its political neutrality.

By contrast, ACT Party leader David Seymour and Manurewa-Papakura Ward Councillor Daniel Newman welcomed the eviction of unruly state housing tenants.

[48] In mid July 2024, RNZ reported that 14 state housing tenancies had been revoked in the past three months due to behavioural issues or persistent rent arrears.

Housing Minister Bishop praised the increase in disciplinary actions against unruly tenants, saying that "there needs to be consequences for bad behaviour."