30 January 2015
The Prime Ministers announcement earlier this week that state housing would be significantly modernised is welcome news, but without private development expertise is not likely to achieve the Governments objectives, says Stephen Selwood CEO of the New Zealand Council for Infrastructure Development.
Decades of underinvestment and politicised management of New Zealands state housing service has left an astonishing one-third of the $18.6 billion of state housing stock either in the wrong place or of the wrong configuration to meet need. Of the remaining two-thirds, an undisclosed number would not meet developing requirements for a rental Warrant of Fitness.
It is extremely difficult to reach any other conclusion than that the traditional approach to managing the Governments housing portfolio and providing homes for people in need is not working.
It is therefore encouraging to see the Government looking at different ways to provide better homes for better value.
As outlined this week, the Government intends to boost the community housing sector by extending maximum housing subsidies to approved providers and, over the next year, selling between 1000 and 2000 state houses to the third housing sector to provide a social housing alternative to compliment the activities of Housing New Zealand. In addition, the Government will be considering how best it can redevelop larger holdings of Housing New Zealand property to deliver more affordable housing.
These changes should see a stronger, more financially secure community housing sector emerge which can reinvest in new units. The localised and more hands on approach to tenancy management provided by organisations like the Salvation Army, iwi or other groups will not only see better stock delivered but an improvement in support given to tenants.
The opportunity to add private sector capital, construction and development expertise will grow capacity to deliver social and affordable housing at a scale not seen before in New Zealand.
Redeveloping Housing New Zealand stock will enable the Government to leverage land value to offset the cost of new homes.
Unfortunately, this policy which has huge potential to deliver new social and affordable housing, improve outcomes and achieve much better value for money for tax payers has not been well understood.
In some areas like Tamaki in Auckland, existing Housing New Zealand stock is 50 or more years old and in immediate need of replacement. By aggregating the large sections allotted in the aftermath of the Second World War, three, four or five new units can be delivered on the same amount of land. The number of social houses can not only be retained but potentially even doubled with remaining units sold privately.
This approach carries two benefits. One is financial. Income from the sale of private units can be used to fund more and better social housing.
The second is that by integrating social and private housing units the stigma of state housing can be dispelled. Bundling wrap around social support services into new development can target truancy and anti-social behaviour at the community level to help foster liveable, healthy communities.
But these opportunities will only be realised when the old privatisation dogma is rejected and when the Government, community housing associations and private sector capital, construction and development markets work together in partnership.
These kinds of innovative relationships provide a real opportunity to tackle the social and affordable housing challenge and should be welcomed, Selwood says.