Housing Minister Phil Twyford, left, has decided not to restructure Housing New Zealand.

Housing New Zealand will not be restructured into a Government department, as Labour promised during the election.

Labour Housing Minister Phil Twyford said in Government he has realised that the social housing provider is already moving in the right direction, and that a restructure could just end up slowing things down.

The state social housing provider is currently run as crown entity, housing 64,500 families.

"Housing New Zealand is full of people who are motivated by the best of intentions," Twyford said.

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"It's about being pragmatic."

Since taking over Twyford had been impressed by two strains of work: better tenant care and rapid house construction.

"We are developing a new approach to the Housing New Zealand landlord role, based on the idea of sustaining tenancies and taking a more compassionate approach."

In practice, this has meant a recent loosening of the rules around pets so that tenants can own dogs and cats.

"Pets can be incredibly important to people and their quality of life, and HNZ has had a pretty tough policy in the past - where owning a dog was an exception not the rule. We are flipping that around."

There has also been a shifting of attitudes when it came to methamphetamine.

"The first reaction now to meth consumption is not to make them homeless by kicking them out but to treat them for addiction."

"That's really about recognising that state house tenants in some cases have complicated lives. A good landlord does everything it can to sustain people's tenancies and not end them."

Twyford said he was surprised to find that many Housing New Zealand employees were already doing pastoral care work with their tenants outside of work hours. He wants to see this tenant care work become a part of the main job.

The other strain of work Twyford does not want to slow down is Housing New Zealand's rapid construction programme, run out of the corporation and a subsidiary which built Hobsonville Point.

"They have really been gearing up for this challenge and have developed impressive capacity," Twyford said.

"It's a priority for us that they continue that work with all possible speed."

Twyford didn't rule restructuring the body at a later date, but this wouldn't be in the short to medium term.

The decision was made by Cabinet on Monday and Twyford was keen for staff to not have a restructure hanging over them through Christmas.

The commitment to reinvest any surplus Housing New Zealand generates in more housing rather than taking a dividend remained.

National's housing spokesman Michael Woodhouse said this was "yet another backtrack from Labour."

"They were warned at the time that restructuring Housing NZ would only slow down house building, not speed it up."

"It's become more and more obvious that Labour's house building plan involves doing exactly what the National Government was doing."