The state houses the Government is selling in Invercargill and Tauranga will be sold for market value and will not be given away for free, the Minister Responsible for Housing New Zealand says.
The Government announced last month it would begin selling off up to 1600 state houses in Tauranga and Invercargill to social housing groups. These sales are a test run for a nationwide programme.
A spokesperson for the Iwi Leaders Group, Haami Piripi, said some of the houses were in a state of disrepair and were on Maori rural land.
"So it's hard to see a logical argument for a strong market value. In fact, it may be the other way round."
Therefore, he said, iwi should get some houses for free, or considerably discounted.
Mr Piripi said, for iwi, it was not just about providing a house and acting as a landlord but also addressing other needs.
"That should be factored in. Even if we took a cost-benefit analysis of the situation, it would probably cost more to move a house off somebody's land than it would to come up with some kind of formula for the release of it to the owners of that land.
"We already have a track record of working in the area of affordable homes, so we're an obvious opportunity for the Government to utilise."
'We won't be giving them away'
Bill English, who is responsible for Housing New Zealand, said the prices would be set based on fair market values, and the houses would not be sold if they could not attract buyers at those prices.
He said those were still likely to be lower than the book values the houses were currently listed at, which were at the higher end of the range.
"We'll go through a proper process; it may be that some have no value. If you're in a small town in a house that's been a P lab, it might be a wee bit hard to get rid of.
"But look, there's plenty of people out there trying to talk the price down because they'd like to get these houses at a low price."
Mr English said it was a matter of going through a proper and fully transparent process to get the market price for the houses: "We won't be giving them away."
Mr Piripi said that was a responsible approach from a minister who had to look out for taxpayers' interests.
But he said if a house had been used as a P lab, that would obviously affect its value.
"And nobody really knows the effect on the value - it comes down to a relative impact and you discuss that in terms of how you arrive at a value," he said.
"It's a bit early to make hardline statements saying 'we will never do this and never do that' because, as we sit down to discuss these things, these factors will emerge.
"We're not asking for something for nothing; we're just asking for [the] right valuation that reflects both the circumstances and our future ability to contribute."
Mr Piripi said, from iwi's point of view, it still had to be financially viable.
"It's not about giving us money or anything like that. It's about making sure that we can help these families in the way they need to be helped."
He said there was a point where it would not be feasible for iwi to invest.
"For the same reasons the Government has to be careful and diligent, we also have to be - we can't go crazily into it," he said.
"A place like where we are up north, it's quite possible values could even drop, so we want to be careful that we don't get ourselves in a situation where we're taking on a liability."
However, Mr Piripi said iwi were still willing to talk to see if they and the Government could find common ground.
Labour Party leader Andrew Little said this had been a pretty ambitious opening gambit on the part of the Iwi Leaders Group.
"But the Government cannot just see the wholesale transfer and the land that goes with it for nothing, to whatever group it is, whether it's iwi or any other group.
"This has been part of our social and government investment going back decades - there is value in it, the houses were built for a reason to accommodate people who can't otherwise get housing.
"There's no way they should be given away - to anybody."