State housing, or “social housing” more generally, is often in the news for one reason or another. Governments over the years have all had their own policies. In this post series, I won’t really be looking at the pros and cons (at least not much) – I’ll mainly be looking at some of the numbers.

Part 1: Social Housing Today

“State housing” is a term we hear a lot of. Over the years, the ‘state’, or government, has had a major role in housing. They’ve built homes, and continue to own a large number. Housing New Zealand owns or leases around 68,000 homes at present.

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‘State housing in Otara’, URL: http://www.nzhistory.net.nz/media/photo/state-housing-in-otara, (Ministry for Culture and Heritage), updated 21-Jul-2014

“Social housing” is a less common term. In New Zealand, the state has always been the dominant provider of social housing. Other providers exist, but maybe a bit below the radar. They’re nowhere near the size, and often focus on a particular region, or a particular community.

Who is involved in providing social housing?

  • Central government (mainly Housing New Zealand)
  • Local government (many councils are involved in social housing, often focusing on ‘pensioners’)
  • Other social providers (Salvation Army, churches, Maori groups, and various other non-profits)

The National government wants these other providers to take a greater role, partly through selling them some existing state housing. It’s fair to say that the process hasn’t gone smoothly so far. The controversial bit is the implication that, as other social providers step up, the government will step back, so there’s no net gain. It’s not really clear how this will pan out.

So, the state owns (or leases) 68,000 homes. Councils own at least another 11,000, based on census information. The Wellington, Christchurch and Auckland councils have the largest portfolios. In fact, the other two councils have more social homes than Auckland (around 2,200 each vs our 1,450).

It’s harder to find statistics on ‘other social providers’, but they seem to provide around 5,000 homes.

By comparison, there are about 1.8 million dwellings (homes) in New Zealand, with about 1.7 million households. So there are probably around 5% of households who live in social housing nationwide. I’ll give a bit more context to that in later posts.

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Garrison Henshaw, Three Kings. 22 apartments for elderly and disabled tenants, completed in 2013. They replaced 4 older units on the property. Source: Housing New Zealand

Partly because of the government’s desire to broaden the social housing sector, the distinctions between the providers above aren’t always clear cut. For example:

  • The Tamaki Regeneration Company is a 59/41 partnership between the government and Auckland Council, and all the 2,800 Housing New Zealand homes in the area have now been transferred to it. The ‘regeneration’ will include a mix of state, other social and ‘market’ homes.
  • Hobsonville Land Company is owned by Housing New Zealand and therefore the government, but it has its own structure. It isn’t providing for social housing in Hobsonville – and actually hasn’t built any homes itself – but does still have wider goals besides just maximising profits. The HLC is now also working on the redevelopment of state houses in Northcote, which will include social housing.
  • The government wants to sell some of its Housing New Zealand homes to other social providers, but will still be involved to some extent, as well as providing a level of funding.
  • Auckland Council’s pensioner housing (1,452 units) is being transferred into a joint venture with The Selwyn Foundation, since the housing wasn’t eligible for government funding support if it stayed under direct council ownership.
  • Christchurch City Council is doing something similar, and other councils may well follow suit.

I’ll focus on quantitative issues in this post series, mainly looking at numbers of homes. My approach treats every home as equal, but of course they’re all different. A standalone house in Pukekohe is different to an apartment in Tamaki. A recently refurbished state house is different to one which is still waiting its turn, damp and cold. Knocking down a three-bedroom house and replacing it with three one-bedroom units means more homes, but not more bedrooms.

Qualitative issues are also important: social housing is about people, not buildings. I won’t look at these issues, it’s not an area I know much about, but here are some of the questions that people may have:

  • Where existing homes are being redeveloped (e.g. Tamaki), are existing residents being treated fairly?
  • Are the people with the greatest need for housing able to be identified and housed?
  • Should people with less need be provided with social housing, or given some other kind of support, or left to fend for themselves?
  • How much is the tenant paying to live in social housing? Is that amount fair?
  • Are people getting the other (non-housing) support they need?

Some of these are operational issues – part of Housing NZ’s job is to make sure they identify the people with the greatest housing need. Some of these issues are strategic ones for social housing, and often they’re political issues too.

Some of these issues reflect what we as a society feel is ‘right’, and of course our value judgments can change over time. The quote below shows the shift in focus for state housing over the years:

“Under Labour [in the 1930s-1940s] state houses were advocated as an alternative form of tenure for all New Zealanders, under National [in the 1950s] state housing became a residual provision for those locked out of homeownership”.

It’s probably safe to say that ever since the 1950s (and certainly today), state housing has aimed to provide for the more vulnerable people in society, rather than a broad cross-section of New Zealanders. However, the government continues to have a role in many other housing incentives: Accommodation Supplements, Kiwisaver withdrawals and HomeStart subsidies, Welcome Home Loans etc.

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17 comments

  1. Use of the term ‘social housing” is part of this Government’s ideological neoliberal plan to degard and eventually eliminate state housing in favour of charities providing housing, and kn favour of contuning the housing bubble.

    There are two important roles for the state re housing provision: — rental housing for people who cannot ohterwise afford it; and affordable houses to sell.

    Unfortunately that doesn’t suit this Government’s ideology.

  2. this is enlightening, I recently viewed a media coverage of a woman and partner whom also had a large number of offspring, whom finally signed a mortgage agreement that was substantially less than the previous rental agreement she had. Her conclusion was that – she was previously ‘homeowner iliterate’. with the mindset the she could never afford decent rental propertys within Auckland let alone her own home.
    I think this is somewhat a product of societal understanding and it seems a generational one also.

    1. Of course mortgage payments can often be less than rents. But the problem is that to buy an average home in Auckland you need a $200k deposit. It’s nothing about literacy. Unless you’re lucky enough to have had some sort of windfall to start you off, saving that is pretty much impossible for most people. Especially as, for each year of saving, the deposit required increases by around $20k. To be able to afford a deposit in ten years (ten years!) you probably need to be saving around $40k a year.

  3. Good intro.
    I was doing policy papers last year, focussing on housing policy as an example of ‘wicked’ policy problems – the problem crosses policy areas in health, welfare & housing, often with the result that agencies try to offload the problem, competing betwee themselves to foist the up housed family/person onto another agency: this is happening in an environment of ‘austerity’ budgets & frontline sinking lids for operational funds.
    There is anectodotal evidence from advocacy groups who deal with homelessness, that MSD/WINZ/HNZ have shadow policies around providing bonuses to staff who reduce the branch monthly caseload.
    There have certainly been perverse incentives to empty HNZ tenanted properties, and spurious grounds used to enable boarding up said vacated tenancies, with an eye to marketing whole blocks of emptied houses.
    This has been observed since around 2011, so it was a deliberately pursued policy from shortly after Minister Paula Bennett gained control of MSD, and started cutting benefits, including accommodation allowances.

    The Homelessness Inquiry submissions publicly available on their website are worth perusing if you wish to read qualitative reports.
    NGO’s as well as individuals submitted, and the submissions make grim reading; bias on the part of frontline staff, including manipulating NGO’s often staffed with volunteers, is reported time and time again, along with breaches of the Social Security Act 1964 & it’s ammendments .

    E-mail me if you’d like some .pdf’s of Select Committee submissions I made myself, or that paper on Housing I wrote, which has a lot of relevant research cited, going back thirty years, pointing out the ways in which privatisation of state housing would inevitably fail.

    “The poor you will always have with you”, to quote a certain social justice campaigner that the righteously judgemental are fond of.

    1. “‘The poor you will always have with you’, to quote a certain social justice campaigner that the righteously judgemental are fond of.”

      A little judgmental yourself there I think.

  4. For social mobility, the government should encourage a lease to buy option for social housing.

    1. That allows government to recover the initial capital to fund more new houses.

    2. People who owns their house will naturally take care of their own home and maintain it, installing insulation and renovating. Adding value to the the surrounding streetscape and community. (instead of dirty homes, growing meths, smashing walls, stealing stuff etc)

    3. A area with concentrated low social-econ residences will slowly be replaced with middle-class home owners who feel confident about their retire capital. That will solve the issue with area of high concentration of poor people.

    4. The minimum lease to pay for the lease to buy can be set according to owner income at different times. When the owner paid off a certain percent of ‘mortgage’, they will be allow to sell the house to open market and share the capital gain with the housing provider.

    5. By recycling capital and transferring the maintenance cost to home owners, the initial state house fund will be sustainable to build more houses.

    I believe it will be a win win.

    1. How would you allocate them though? Is it fair for the poor to be given a hand onto the housing ladder while slightly higher income earners are subjected to a lifetime of rent?

  5. State housing as a proportion of the housing market and on a per capita basis is at its lowest since the 1950s, which is ridiculous given how bad the housing crisis is. Whatever else is done to fix housing affordability building more state houses has to be in the mix. We need to do it if we want to consider NZ a civilised society.

    1. A massive increase in supply of houses for sale, and assuming the current tenants aren’t capable of buying, no increase in demand. Government could use the sale money to fix transport issues and other infrastructure.
      It might sound a bit mean to current tenants but i think a properly free market free of government interference would do better than the current setup. The government don’t supply food or electricity, why housing?

    2. “I say sell the lot at market value. That would end the housing crisis.” has to be one of the more idiotic statements I’ve ever heard on this forum. You must vote for the ACT party? It would not end the housing crisis, but it would definitely transform it. It would not only “change the owner of the house” as Mr Plod says, but the new owner would most likely be a “property investor” (as first home owners cannot get a foot on the ladder) and then kick the existing tenant out, and either put the rent up (likely), or do it up to live in themselves (less likely). The former tenants would then be added to the list of the homeless, except now they have nowhere to fall back to, no backstop to rely on. No extra houses have been created, so the housing crisis is not solved, but houses at affordable rental prices have now been removed from the pool, thereby making the situation worse. Affordable, subsidised housing is the sign of a civilised country.

      1. While I admit it is an extreme idea, I don’t think it is completely daft:
        A) the government is not good at things like running telecommunications, power companies, food shops and housing. This is why so many state houses in Auckland are still sitting on massive under-utilised sections. Private investors would have subdivided them years ago adding lots of vital housing.
        B) I think if the government did put 20,000 houses on the market tomorrow it would definitely drop house prices and allow first time buyers back in.
        C) if affordable subsidised housing is so great why is almost every housing NZ area so awful.
        D) all the worst performing markets in NZ are the ones that the government are meddling in
        E) if the government and council stopped regulating/subsidising/planning and left housing to the free market I bet we wouldn’t have stupidly high house prices.

  6. In June 2016 there were 403 state houses empty due to P contamination, and in the year prior more than 400 tenants had been evicted due to P contamination. http://www.stuff.co.nz/business/81265274/meth-contamination-forces-south-canterbury-state-housing-tenants-out-of-homes
    I wouldn’t want my kids living in a contaminated house. Increasing the contamination limit would not make me feel better about a house.
    Where to the people who smoke P in a house or cook P live after they’re evicted?
    This is a large problem looking for a solution. Those contaminated houses could have benefited a lot of people.

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