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The Missing Middle

chris-glaudelChris Glaudel

Deputy Director | Community Housing Aotearoa

Housing continues to receive lots of attention in the media, government and in everyday conversation.  The availability and cost of both rentals and homes for purchase is a challenge in many communities.  Government programmes are targeted to the ends of the housing continuum with increased funding to help those who are homeless and first home buyers.

However, there is a gap in support for affordable rentals and pathways into ownership.  Community housing organisations have traditionally worked to provide these opportunities.  For many years, Housing New Zealand served those with the lowest incomes who qualified for the Income Related Rent (IRR) subsidy.  Community housing organisations provided below market rate rental homes and assisted home ownership for those who did not qualify for the IRR.  Government supported these efforts through capital grants and favourable loans from the Housing Innovation Fund and then the Social Housing Fund.  Private developers provided market rate rentals and ownership homes.

This changed in 2014 when the Government ended the Social Housing Fund and extended access to IRR funding to registered community housing providers.  It also developed grant schemes for first home buyers.  This resulted in support at both ends of the continuum but disconnected the pathway in between.

The lack of investment in affordable rental homes is contributing to the growing pool of families living in tenuous situations.  Government is now feverishly adding new supply for emergency housing and social housing at one end of the housing continuum while private developers are building large, expensive new homes to purchase at the other end.  The KiwiBuild programme is supporting developers, but not delivering homes at prices that are truly affordable to the average family (monthly mortgage expense at around 30% of income).

Very little is being done to increase the supply of warm, safe and dry new homes affordable to average Kiwis.  Increasingly, key workers like teachers, nurses, firefighters and police officers are challenged to find affordable homes in our growing cities.  If we don’t act, what is currently a housing crisis will evolve into an economic and social crisis as the people we all depend upon to make our communities work, are no longer able to afford to live there.

New tools are required to provide affordable rental and assisted ownership opportunities.  A form of inclusionary zoning has been successfully operating in Queenstown Lakes for a decade.  When land is rezoned for new development, a percentage of the site is gifted through Council to the local Queenstown Lakes Community Housing Trust.  The value of the land contributed has enabled the trust to deliver affordable rental and assisted home ownership.  This same tool can be applied to other communities facing similar affordability challenges.

Christchurch City Council established a 100% development fee rebate programme for new social and affordable homes developed by registered charitable trusts.  Other councils may be considering similar schemes.  Wellington City Council provides a $5,000 rates rebate for first home buyers buying newly built homes.  Both Christchurch and Wellington have also sold surplus land under favourable terms to registered charitable trusts to facilitate the development of new affordable rental and ownership homes.

We need to act now to encourage the broad adoption of these types of tools across all communities.  The mix of tools and incentives should be tailored to the local housing market and needs of the community.  Government needs to enable and support these efforts to re-establish the pathway to connect the two ends of the continuum that are currently the focus of attention.  We need to work together to fill in the missing middle.

 

This blog has been contributed by a member of the ComVoices network. The views presented here are not necessarily those of ComVoices.  

ComVoices is a Wellington based network of national community and voluntary sector organisations. It was established so that sector organisations would have a more powerful voice at Government level and in the community. 

Click here for our website:  http://comvoices.org.nz/