Housing New Zealand is being accused of failing the taxpayer after it sold a piece of Auckland real estate for $2.5m - when the land alone is worth three times that.
The downtown apartment block at 44 Symonds Street was built in 1945 to house pensioners, low income single people and couples without children, and it contains 45 apartments which never reached the open market.
It was sold in a private deal by the government for $2.5m to the University of Auckland, despite the land being valued at $7.6m two years ago.
The protected heritage building was said to be earmarked to be used as student accommodation by the university after a $22m renovation, but the university has told ONE News it has no immediate plans to do so.
The minister responsible for HNZ, Bill English, says he has complete confidence in the processes and decisions made.
"Housing NZ clearly thought they had a better use of $20 million than doing up that accommodation," he said.
"It's a bit of an indictment on the fact it's been in public ownership a long time and got in that state - but Housing New Zealand have dealt with it by selling it on to the university who are now going to do it up."
However, Labour associate Auckland Issues spokesperson Jacinda Ardern said it was clearly a dud deal.
"Central Auckland is in desperate need of social housing - I have right now individuals who have been homeless for a year still waiting for housing like this," she said.
"The fact that we have virtually now given away a building in the central city that could have helped house those individuals for the price that Housing New Zealand has - is absolutely ridiculous."