Security – the security of a home, whether it’s owned by the occupants or rented – has grown as an issue in New Zealand since the 1980s, and especially through the recent years of ballooning house prices.
One proposition raised this year to alleviate rental housing shortages is the build-to-rent concept – effectively, a private sector version of Housing NZ.
Marketers like it, it’s a longstanding format in the US and, in Europe, portfolios of rental housing are regularly traded among corporate investors, but the tenants stay put.
The differences between all those systems & New Zealand rentals are length & security of tenure.
Short-term tenancy is ideal for many renters, but raises problems for families, and particularly for children being constantly upended.
The Ministry of Social Development says in its briefing paper to new ministers on housing, written in July & released yesterday:
“One-third of New Zealand households now rent, and the number of children living in rented accommodation has increased from 26% to 43% since the 1980s. Increasing demand for public housing and a growing reliance on emergency housing highlight the pressure on the private rental market & the lack of new supply, particularly affordable & secure rental housing for lower income households.
“Increased competition for rental housing from a growing number of renters means that the most vulnerable renters (those on low incomes, those with complex needs, those with a poor rental history and those who potentially face discrimination in the rental market) are being increasingly excluded from the private rental market. Private sector rents are increasing, though the level of increase is not uniform across New Zealand…
“A relatively short-term investment horizon means that tenure security is an issue for many private sector renters. In recent times, some private rental stock has been repurposed for travellers & short-term accommodation (eg Airbnb, Bookabach), contributing to increased competition for available rental housing.
“Investors selling residential rental property also face strong demand from first-homebuyers, potentially removing stock from the private rental market, often at the lower end of the rental housing market.
“Alongside this, there is a lack of new supply of rental housing, specifically affordable rental housing for people at the lower end of the rental market. While growing demand for rental housing is putting upward pressure on rents, landlords are also facing increasing costs. Rates & insurance costs are rising well in excess of the consumers price index….
“Much of the existing social housing stock owned by councils needs redevelopment or replacement. As a result of growing financial pressure, some councils are exiting the provision of subsidised housing to vulnerable members of their communities.”
The ministry’s paper highlights the nation’s greatest achievement: dysfunctional, sick families:
“Affordable & appropriate housing is a cornerstone to wellbeing & reducing child poverty. There are clear linkages between poor housing & a range of negative social & economic outcomes.
“Poor housing is linked to health problems for children, including respiratory diseases & infectious diseases. This is exacerbated by overcrowding, which also impacts on school performance. Lack of stable housing can also impact on a child’s development.
“Frequent relocation, or homelessness, takes children out of familiar environments and may involve moving schools & school absences. It can also cause higher rates of stress, anxiety, depression & other mental health problems.
“High outgoings for housing costs, relative to income, is often associated with financial stress for low to middle-income households. Low-income households can be left with insufficient income to meet other basic needs such as food, clothing, medical care & education for household members.
“For example, in New Zealand around 24% of households in the lowest income quintile spend more than half their income on housing. For the period 2007-17, around 15-16% of all households spent more than 40% of their disposable income on housing, up from 5% [doing so] in the late 1980s.
“Major problems with dampness & mould, difficulty in keep the house warm and overcrowding are all issues with housing quality that have impacts on health & wellbeing, especially for children.
“Overcrowding often goes hand in hand with other material hardships – poorer households, those containing children and those containing Maori & Pacific families are particularly vulnerable.
“Pacific peoples are more likely than other groups to be living in crowded households. Obtaining rental housing in the private sector is particularly difficult for larger low-income families.”
Ministry of Social Development briefing paper: Housing – MSD.PDF419.77 KB
Attribution: Briefing paper.