Housing call a message to Government
Bill English says he is not surprised that the Salvation Army has decided against buying state houses from the Government. It might well be asked, therefore, why the church organisation was always at or near the top of the Finance Minister’s list when he was asked what community providers would play a role in the supply of social housing. And if its verdict was unexpected, so must have been the tenor of its accompanying comments.
Campbell Roberts, of the Salvation Army, said it did not believe “the lives of tenants would be sufficiently improved by such a transfer”. Nor did it have the “expertise, infrastructure and resources to successfully manage any social housing transfer of size”. Major Roberts took aim at successive governments’ treatment of Housing New Zealand, saying it had been left in an “appalling state”.
The significance of these statements should not be underestimated. Major Roberts was a member of the Housing Shareholders Advisory Group which, on concluding the state-housing model would not meet future demand, suggested increased community sector involvement. The Government eagerly seized on the idea of other agencies such as the Salvation Army or iwi authorities providing social housing for tenants with a state subsidy. It also envisages private landlords becoming approved providers if their standard of accommodation and care is up to scratch.
Essentially, this would create a market in the supply of rent-controlled housing. Housing New Zealand would be just one of several agencies competing for the Ministry of Social Development’s clients. However, the Salvation Army’s thumbsdown is not the first setback. Community Housing Aotearoa, the private providers’ umbrella group, has flagged a series of initiatives to raise the large sums of capital required to buy state houses. But it has also indicated that it wants the Government to come to the party financially. Without such assistance, many potential providers appear to question whether the return will warrant their participation.
The Salvation Army has concluded it does not have the resources to participate. Its concern about its expertise and infrastructure also underlines the fact that this country, unlike many in Europe, does not have a strong history of community housing. Against such a backdrop, the Salvation Army is wise to question its credentials for involvement in “a very complex operation” and, indeed, whether community-based providers will do a hugely better job for tenants than Housing NZ. It says, however, that it remains keen to pursue housing partnerships, carried out in more of a consortium approach.
All this indicates the Government may have to provide carrots to potential providers to get a market operating meaningfully. This may involve allotting state houses or selling them at a substantial discount. Providers would then be able to get financing to develop more social housing. Alternatively, there could be government financing of community groups’ involvement. Either way, that amounts to a subsidy, leaving taxpayers out of pocket. And it raises the question of the whole point of the exercise.