State home boost falling well short
The case to build more state homes is overwhelming. House prices in Auckland and other urban areas remain high enough to keep property well out of the reach for most moderate earners without a leg up from mum and dad. These people are renting later and later into their lives, sending private rental prices steadily up every year, to levels where plenty of people can still pay them but thousands of poorer families cannot.
The ambulance at the bottom of this cliff is supposed to be state or social housing – housing for people for whom the private rental market is simply too expensive or brutal. Governments have long accepted the need for some housing of this kind, which is why we now have some 66,600 state homes.
Private landlords will naturally seek out tenants who can pay as much as possible. They will not generally take on those with terrible credit histories or install facilities like wheelchair ramps for those with high needs.
Most of us believe these people still deserve a roof over their heads. But we haven’t got enough of those roofs. As of March 31, 7890 households that the Ministry of Social Development (MSD) deemed eligible under fairly restrictive criteria were waiting an average of 64 days for a state house. Some families are waiting significantly longer. While they wait, they are getting sick in their cars and in the living rooms of relatives, or the Government is spending thousands to keep them in motels temporarily.
It’s a situation neither main party finds acceptable. National promised late in its term to build
13,500 social homes over the next decade – with an immediate goal of getting the total to 72,000 by 2020, which Housing New Zealand is already working on. Labour, a party with a long history as the champions of state housing, came to power promising
1000 new state homes a year, which was actually less than National’s promise.
Housing Minister Phil Twyford has exceeded this promise, securing funding for 1600 new homes a year, for a total of 6400 by 2021, taking the full inventory to 73,000.
National MPs are naturally arguing this isn’t as much as they were promising. Twyford, also quite naturally, says the party had nine years to build state homes, the net amount actually reduced by
1500 over their time in office, and it hadn’t fully funded the 2020 promise, which he is now doing.
This political point-scoring is understandable but irrelevant to the problem we have here and now: there are not enough homes, and 6400 new ones over four years will not be enough to fix that.
How do we know that? The briefing that greeted Twyford from his own officials when he became minister noted that National’s pledge to get the stock to 72,000 by 2020 ‘‘will not keep pace with recent demand growth’’. It seems unlikely 1000 more by 2021 will change that all that much. You can even do the maths yourself, looking at the huge growth in the waiting list, which has doubled in the last two years. Are 1600 new homes a year really going to bring down a waiting list that grew by 3000 new households in the last year, or even keep it steady?
It wasn’t always like this. In 1991, only 60 per cent of renters lived in a private rental; in 2013, 83 per cent did. This change appears to have largely been driven by a serious decline in state housing. The authors of the Government’s own stocktake blamed this drop for our current homelessness problem.
Yes, the Government is trying plenty of other things to fix the housing market. But KiwiBuild homes will never be affordable for a lot of people, and policies like a ban on letting fees only help so much. Officials say every 1000 new state homes should cost between $100 million to $180m. The surplus is $2.5 billion and growing. Why not use some of it?