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. Here are parts one and two of the series.
Part 3: Was State Housing ever a big deal?
My last post looked at state housing over the years – with the government building 2,000 homes a year over four decades (the 1940s-1970s). Some state homes were sold off, but the number had still reached 60,000 by 1980, and peaked at 70,000 in 1990.
Those are big numbers. But New Zealand had 400,000 homes in 1940, and 1.6 million today. State homes are a pretty small share of that. Were they ever a big part of the overall housing ‘stock’, or of home construction?
I’ve had to smoosh some different data together to answer this question. Firstly, the number of homes in New Zealand (technically, “total occupied dwellings”) as recorded in each census. Secondly, figures on the number of state homes, and the number built.
Firstly, a graph showing the percentage of all homes which are owned by the government:
The government never owned more than about 7% of the total housing stock in New Zealand, but for many years it owned around 6%. The ‘absolute’ number of homes owned kept growing until 1990, as above, but the percentage stayed pretty stable. In the 1990s, the government of the day sold off more than 10,000 homes, and the percentage (and absolute number) fell. Today, state homes make up just over 4% of all homes in NZ.
The next graph shows the percentage of all homes which were built by the government:
For many years, the government was a bigger player in home building, building as many as 20% of all the new homes between 1945 and 1951, and at least 10% of homes for many other periods. The last gasp was with the Lange government; ever since, state home construction has been quite minimal, especially compared with the amount carried out by the private sector.
It’s interesting to compare this with another country – Patrick managed to find the following chart for England:
It’s obviously hard to compare the UK with New Zealand – it has 14 times the population, and is growing at a proportionately slower rate. The welfare and social policies are quite different.
In the UK, it seems it was “local authorities” rather than the central government which did most of the building. They carried out the lion’s share of all home construction in the post-World War Two years, and remained a major force into the 1970s. Over those three decades, councils delivered about half the new homes built in England. “Housing associations”, which are also non-profits, made a smaller contribution in the postwar period, but have picked up some of the slack from councils since the 1990s.
What changed? Thatcher’s government came in and enacted a “right to buy” law in 1980, so tenants would have the right to buy their homes, and at a big discount to market value. But the councils weren’t allowed to reinvest much of the proceeds in housing (and, in fact, they didn’t even get all of the proceeds themselves). As a result, the number of council homes fell, as did the rate of council home building.
One last comparison: in 2015, the UK completed 2.6 new homes per 1,000 people, and 0.6 of those were social homes. New Zealand completed 5.9 homes per 1,000 people, and 0.2 of those were social homes.