Kāinga Ora has admitted it made mistakes and could have acted faster to solve problems with tenants described as "neighbours from hell".
Up to a dozen people lived permanently at the Babich Hills address in West Auckland - a number that swelled to 20 at times - and they subjected local residents to a year of misery.
They occupied a six-bedroom property in Ranui, where the average asking price for a large house is $1.5 million, between July 2019 and October 2021.
They moved out after a garage fire made the home uninhabitable.
Kāinga Ora admits during this time it received "a significant number of complaints" about their behaviour.
"There was constant fights at their house and around about 20 people living at the property from time to time," an immediate neighbour - who RNZ has agreed not to identify - said.
"There were many cars turning up and it was starting to become a kind of a junk area, you know, with broken cars being parked on the kerb, rubbish lying on the street, parties breaking out onto the streets.
"Personally, I must have called noise control about 30 times."
There were allegedly also violent threats.
"She came over with a garden spade and threatened my tenants. She came in the front, and then she went around the back and threw open the ranch slider door to the lounge where a four-year-old child was playing. She was absolutely drunk.
"So, she then came around and did some severe damage to the front door to the point that the door had to be entirely replaced."
They spent $6000 replacing the door, and had CCTV installed and a fence built for a further $20,000 because they felt so intimidated.
'A lot of swearing, shouting and fighting'
Another neighbour said their children lived in fear.
"The kids have had anxiety when those neighbours are around. They wouldn't even go out because there would be a lot of swearing, shouting and fighting going on.
"And in the local park as well. A lot of the kids stopped going to the local park because the kids from that tenanted property would go there and cause problems for other kids."
A group of residents met with Te Atatū MP Phil Twyford and Kāinga Ora, but got the impression there was little the housing agency could do.
One neighbour said since the fire, their biggest fear was that the family would be moved back in once the damage was repaired, which appeared imminent.
Twyford said what the residents had endured was unacceptable.
"You know, the residents have had a kind of nightmarish few years, really. They've been putting up with the neighbours from hell, and it's not putting a too fine a point on it to say that their lives have been made miserable by a sustained pattern of antisocial behaviour."
He did not want to see the tenants put back into the home now the fire damage had been repaired.
"The residents have suffered enough and I'd hate to see them go through this anymore."
'A challenging situation'
Kāinga Ora regional director for Auckland north and west Taina Jones admitted the housing agency had made mistakes.
"This was a challenging situation and while we did our best to respond to the concerns raised, we didn't always get it right and could have acted more quickly.
"Since this time, we have made changes to improve our ability to respond to disruptive behaviour when it occurs, and have a range of tools in place to support this.
"This includes tools to support relocation under the Residential Tenancies Act, which are seeing positive results to date."
Jones said despite Kāinga Ora's best efforts, another home large enough to accommodate Babich Hills tenants in a suitable area was not available.
"The family were offered accommodation in two separate homes, which was declined, and as a result, the family was provided with emergency housing by the Ministry of Social Development."
She said they would not be moving back in at Babich Hills.
"We have now repaired the damage caused by the fire and completed maintenance work, in line with our standard process, in preparation for a new family to move in. We are working hard to place a new family in the home and hope to have this process completed soon."
The immediate neighbour was overjoyed.
"I can just say I'm so relieved, I'm just so relieved. We've just been through hell for the last three years, and this is just the best news we could've got just before Christmas."
They were looking forward to meeting their new neighbours.