Story: Housing and government

Page 4. Council housing

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Early municipal initiatives

In the early 1900s city councils in the main cities followed the central government’s lead and became more interventionist. Believing private enterprise had failed in the delivery of some services – from public transport to town milk supply – councils either took them over or set up in competition. A chronic housing shortage in the 1910s led them to move into housing provision as well.

  • In 1916 Auckland City Council built six rental houses in Ponsonby. In 1920 it used a government loan to erect 60 houses in Grey Lynn for young families to buy.
  • In 1920 Wellington City Council built 10 houses for sale in the suburb of Northland. Interested buyers entered a ballot for purchase.
  • In 1921 Christchurch City Council was advanced government finance to build eight rental dwellings in Sydenham. A further six were opened in 1922.
  • In 1924 Dunedin City Council erected seven rental cottages in North Dunedin.

These mirrored the earlier government workers’ dwellings schemes in providing houses for both rent and sale – some councils stressing one over the other. They show how the state supported municipal initiatives.

Home ownership is better

In the early 1940s Wellington City Council supported home ownership over renting. Councillor M. F. Luckie expressed a widely held view: ‘You don’t make good citizens if you make them permanent rentpayers and you don’t have slums where people have their own homes.’1

Schemes expand

There was then a hiatus in building until 1937, when the first Labour government advanced new loan money. Both Dunedin and Wellington opted for subsidised private housing. In September of that year Prime Minister Michael Joseph Savage opened the first three of hundreds of council-built homes in Dunedin. In 1940 Wellington introduced a scheme for low- to middle-income residents. If they could provide a 10% deposit on the cost of the land and house, the council would guarantee a 90% low-interest mortgage. The aim was to provide an affordable alternative to the government’s state rental-housing scheme.

Housing the elderly

Meanwhile, Christchurch’s council had pioneered a new direction. In 1938 it erected the first complex of rental ‘cottages’ (flats) for old-age pensioners. This led to an informal distinction between state and council housing provision, the former focusing on accommodating families and the latter on housing single and elderly people. After the Second World War, councils reduced or stopped subsidising private housing and built up their rental portfolios. One reason for this was to re-house elderly residents displaced by urban renewal projects. In Auckland, large areas of historic Freemans Bay were flattened to accommodate a new motorway, with many affected residents relocated to purpose-built pensioner flats beside it. Inspired by modernist developments overseas, Wellington built several high-rise blocks of flats in the 1960s and 1970s, before reverting to lower-scale developments in the 1980s.

A spruce-up

In 2007 Wellington City Council entered into a $220-million memorandum of understanding with the government to upgrade its housing portfolio over the next 20 years. This included insulating and double-glazing dwellings to improve their warmth, and landscaping their outside areas to make them more inviting and pleasant.


From the 1970s councils diversified provision to accommodate those in most need of housing – such as disabled people. In 2003 Auckland City Council sold its public housing stock to the government to relieve debt; other Auckland councils retained their portfolios and these became part of the assets of the new Auckland Council in 2010. At this time Christchurch City Council was the single largest provider of public housing after Housing New Zealand, followed by Wellington City Council. Smaller municipalities, such as Hamilton, Timaru and Invercargill, also provided public housing – mainly for the elderly.

  1. Evening Post, 2 May 1941, p. 8. Back
How to cite this page:

Ben Schrader, 'Housing and government - Council housing', Te Ara - the Encyclopedia of New Zealand, (accessed 17 June 2024)

Story by Ben Schrader, published 20 Jun 2012