In the early 21st century government housing policy was centred on ensuring a sustainable housing supply. In the early 2000s population growth created a housing shortage, especially in large cities and resort areas. This led to skyrocketing prices that made housing unaffordable for many first-time home buyers. Rising house prices flowed through to increased rents, further decreasing housing affordability.
To improve affordability the government provided two major forms of assistance:
- direct assistance in the form of state housing and income-related rents that provided for people in greatest need
- indirect assistance in the form of the accommodation supplement for those whose housing costs were too high to be met by their own income alone.
Nation of homeowners?
Between 2002 and 2005 New Zealand house prices increased by about 53%. This benefitted existing homeowners and investors at the expense of first-time home buyers, many of whom were priced out of the market and forced to rent. The long-term trend in house prices widened the wealth gap between those who owned property and those who did not.
Community housing sector
The government has supported the growth of the community-housing sector, sometimes called the third sector (after government and private provision). It consists of non-government organisations such as community trusts, Māori and iwi organisations, and socially oriented businesses. The government’s Housing Innovation Fund gave grants for such providers to build or buy community rental housing and supply affordable home options. An umbrella organisation, Community Housing Aotearoa, was set up in 2004 to provide leadership and services to the community housing sector.
In 2010 the government supported low- to moderate-income earners to buy homes through a number of schemes.
- The Welcome Home Loan gave home loans to people with low or no deposits. The government provided participating lenders with mortgage insurance.
- The Gateway Scheme enabled first-time home buyers and community providers building or buying houses on government land to defer payments on the land for 10 years.
- Kāinga Whenua loans were available to Māori to build homes on multiply owned ancestral land.
- KiwiSaver provided subsidies to home buyers who had contributed to the government-subsidised superannuation scheme for at least three years.
Private rental market
As home ownership became less affordable, the proportion of renters increased. In 2010 the private rental market was characterised by short-term tenancies, making it difficult for tenants to maintain schooling and community participation. The government was working with landlords and investors to improve renting as a tenure choice through such things as long-term leases.
The Tenancy Tribunal is a special court that rules on disputes between landlords and tenants who are unable to reach agreement in formal mediation.
An important aim of government was raising the quality of New Zealand’s housing stock. Many houses were cold, damp and energy-inefficient, leading to annual winter spikes in respiratory and other illnesses. The early 2000s leaky building crisis – where poorly built new houses developed leaks and rotted – was partly blamed on insufficient regulation. In response the government:
- updated regulatory frameworks and building standards, such as the Building Act 2004
- implemented energy efficiency initiatives
- supported innovation in design and development.
In 2009 the government launched its ‘Warm Up New Zealand: Heat Smart’ scheme. It aimed to enhance energy efficiency in more than 180,000 homes by providing a subsidy to improve ceiling and under-floor insulation. This would achieve warmer, drier and healthier homes.
Better housing mix
The government also promoted a broader housing mix to better meet the needs of New Zealand’s diverse population. The standard three-bedroom home of the past was often not suited to single-person households or communities who preferred intergenerational housing. Housing for disabled people was another area of growing need.
In 2010 the government announced that financial constraints meant that state rental housing provision would be restricted to families in greatest need. New tenants would have regular tenancy reviews to ensure their home still best suited their housing needs. Those whose circumstances had changed would be placed in more suitable homes, or evicted. This policy increased the importance of the community-housing sector in providing affordable rental housing for those locked out of government, council and private provision.