Sale of social housing stock won’t save costs

Written By: - Date published: 2:00 pm, November 16th, 2014 - 20 comments
Categories: assets, housing, Social issues, superannuation - Tags: , , , ,

Hamilton City Council currently has plans to sell of its remaining pensioner housing stock. It already sold off a block of them in 2012. Of those sold, only 12 out of 53 units are available for seniors to rent at affordable rates. This is because 27 were sold as there was no social service provider able to buy them. Of the ones that were bought by Habitat for Humanity, well they needed an interest-free loan from a funder to even do that.

So now Council want to sell the rest. Here are the current proposals:

  • invite social housing providers to buy its pensioner housing for on-going use as social housing

  • if not sold to social housing providers after six months, offer the pensioner housing for sale on the open market

  • no longer provide pensioner housing as a Council service

There has been considerable protest, including this rally in the form a funeral for the housing stock. Submissions on the proposal closed on 31 October: there were 275 against and only 15 in support. You can find my submission here, hardly a masterpiece but it was done late on 30th October, and at least I had my opposition officially noted.

So today were the oral presentations to Council. It was a pretty hostile environment – questions from Councillors & the Mayor were leading and often pretty aggressive. As a process that is supposed to encourage the public to have their say, it wasn’t encouraging at all. Making any kind of public submission tends to be pretty daunting for most people and you would think that Councillors would try to make it easier. But I guess they were too busy thinking we were trying to score political points to actually listen to our genuine concerns.

Today I talked about the fact that Council did in fact have a responsibility to provide social housing. Council is responsible to & for the people living in the city, and there is clearly a need for such housing.

The private sector doesn’t provide adequately, because we find that vulnerable people are living in poor quality housing with inadequate maintenance which leads to poor health and educational outcomes.

The need for social housing for the elderly will rise, and not just because of an aging population. There are other factors such as:

  • this generation being burdened by student debt which makes it harder for them to save for a deposit;
  • expensive education not necessarily leading to quality work with high-paying salaries
  • minimum wage jobs not being enough to live on, let alone to build up savings
  • the casualisation of work and the rise of zero-hour contracts, which mean variable work hours from week to week and therefore variable (& insufficient) incomes

All of these factors have already had an impact, because we know that currently we have the lowest rate of home ownership ever and those rates continue to fall. So it is much more likely that these people will reach old age still in poverty and without savings.

The sale of pensioner housing is a short-term measure to pay off current debt, and there is no indication that Council has in place any planning for long-term future social housing needs.

I accept that this is not just a local government responsibility, and I know that one of the drivers of the sale is central government policy to no longer give housing subsidies to any local government nor to any CCO. Our Councillors need to be raising their voices against this policy, in a very visible way. They are not without power, they can co-ordinate with Councils in other areas and provide a strong objection. It is the job of Councillors to advocate for the people of their city and I can’t understand why they wouldn’t do that.

Other Councils are trying to find ways to work around the central government funding policy and this Council should be talking to them to find solutions.

If we lose the social housing stock, then there will be costs to ratepayers. It’s nonsense to say that the sale of this stock will save money. If there isn’t sufficient safe and adequate housing, then there will be increased health costs that have to be paid for. Or accommodation costs will be passed on to ratepayers from central government in the form of a higher level of accommodation supplements. Either way, they will have to pay so it is false to say that there are going to be savings. The only difference is that if the housing stock is sold, then those costs will be more hidden and indirect, and therefore easier to ignore.

As I’ve said above, previous sales have led to the loss of homes available for housing the elderly. So where are these people supposed to go?


20 comments on “Sale of social housing stock won’t save costs”

  1. Barfly 1

    So where are these people supposed to go?…

    They’re supposed to die…….

  2. BM 2

    Hamilton has a lot of debt due to a number of bad council decisions.

    Cuts need to be made and the focus has to be put back on core council business.

    I don’t think pensioner housing should be part of that.

    • Areobubble 2.1

      German has a civic understanding that means profiting from renting isn’t a priority, govt and private interests have mutual benefits in keeping housing affordable. Productivity risess as housing stress abates. Also a high rental sector means greater worker move,went, also great for the economy. So any discussion about housing without the complimentary discussion about wealth acquistion by the middle classes and the zero tax rate on capital gain…

      So given this light, all Hamtion is doing is increasing supply, and those groups, the poor and old who have less to lose by moving can, to cheaper regional areas. Of course we live in hope that the new expansion of housing in the NE will provide, finally, small housing options that the present market will not build.

      NZ decided to make profits from it citizens even when this harms society, equality, productivity, and skills availability – as workers find it more costly to move. Its no surprise really that a generation of ignoramouses who believe govt is at the root of all evil, have ignored the consequences.

      Take Hooten today on Q&A first he could not understand mechanisms designed to disincentivise large rental portfolios via tar getting income from rent, and linking it to borrowing rates. But then had to peddle utter nonsense, that coal was akin to food for the purposes of carbon taxation. Coal and seeds maybe, but the joke was misses, that we import computers and aren’t paying carbon taxes on the coal.

      Hooten is there to scupper democratic debate, as this assists the stay the course conservatism that have always loathed change undermining their rent seeking.
      TV1 is not serious about the problems of NZ while it invites Hooten with his pre-packaged nonsense precooked to destroy analysis and democracy.

    • and yet they have a river development plan that is going to cost $35 million (if i remember correctly). they could keep the housing & not spend on what is essentially cosmetics, on the basis that people matter more.

    • stever 2.3

      If looking after citizens isn’t core council business then way is?

      And why don’t you think pensioner housing should be part of core council business?

      • BM 2.3.1

        Should be governmental not local.

        Local should be about city infrastructure issues not social needs issues, once you move into social issues you’re starting to use rates as a tax revenue source which is not what rates should be about.

        • McFlock

          And when it’s about the role of central government rather than local government in housing, you say:

          Part of the reason they can get away with it is because the main opposition party no longer believes in state housing for life either.

          Fantastic news.
          Less wet nursing, more self reliance, I like it.

          Rather than hiding behind the tired “core business” bullshit (after all, the social wellbeing of the community should be a primary concern for local councils, unless you think towns and cities are populated by robots), be honest: you don’t give a shit if the homeless remain homeless and pensioners are kicked into the street.

    • “Hamilton has a lot of debt due to a number of bad council decisions.
      Cuts need to be made and the focus has to be put back on core council business.
      I don’t think pensioner housing should be part of that.”

      Because the city badly needed a white elephant stadium, or an event center which operates at a loss, or to do main street upgrades twice to attract shoppers to the cbd which they killed by allowing out of town shopping in the first place etc… etc…

      Yeah, don’t need old people’s homes, but that’s what happens when small business types consistently get hold of local power.
      Don’t know why the greens and labour don’t stand official candidates and build a connect with voters at ground zero.

    • BMW 2.5

      Hamilton has a lot of debt due to snouts in the trough.

      Cuts need to be made and the focus has to be put back on core council business.

      I think pensioner housing should be part of that.

  3. greywarshark 3

    I remember Hamilton being very keen to enter the free market neo liberal world from the beginning of Rogernomics. It is still apparently a smug little city based on agricultural interests with a little intellectual pretension but little understanding of civic fairness and responsibility.

    • excuse me? i’m a hamiltonian and i’m not like that. nor are the many, many people who are protesting this & other measures. can we not have generalisations like this please.

  4. greywarshark 4

    @ stargazer
    Well you aren’t the majority or you wouldn’t have a Council doing this sort of sale of public assets. Better get your indignation stoked up and fire it at the Council other Hamiltonians have saddled yourself with.

    • Murray Rawshark 4.1

      Not necessarily, gws. The majority were against asset sales, yet Key went ahead anyway. I’m not sure the majority agreed with what Len Brown let the port do, either. A majority of the people in the Kaipara didn’t want Mangawhai to saddle them with the costs of an expensive sewage system.

      • b waghorn 4.1.1

        Well the majority need to think more deeply before they vote, don’t no about most of your example s but any one who voted right in 2011 has no right to bitch about asset sales.

  5. Treetop 5

    More people going into a rest home earlier will occur and the government will need to pick up the tab. As well more people will need to access the maximum allowable Accommodation Supplement (AS) and go into Work and Income every three months for Temporary Additional Support (TAS) to cover rent. The formula for AS and TAS uses the main benefit component of any main benefit, the NZ Super rate is about a third more than Supported Living and Supported Living is at a higher rate than most of the other benefits.

    There is no comfort or humanity for some in old age. There maybe an increase in suicide stats for those over age 65. An increase in rent usually means less food in the pantry/fridge, waiting longer to see the GP and then not having enough time at the consult to discuss everything and using less electricity during the cooler months.

    Housing in this country is a national disgrace, its not as if there is no land to build on.

    • Barfly 5.1

      My understanding is that superannuation is counted only at 50c in the dollar when calculating additional support ..therefore its higher payment rate doesn’t count against superannuitants.
      Suicide stats by age group in 5 year bands for people in the 65-70 and 70-75 age groups are approximately half the rate of other bands
      I agree that the government be it central or local or a combination thereof must provide adequate social housing for the elderly

      • Treetop 5.1.1

        Regardless of what the formula for TAS is, when there is an increase of rent TAS maybe required. I did hear earlier in the year that there is an increase in the suicide rate for the elderly. You state that the rate is approximately half of other bands. The point I was trying to make was that an increase may occur when accommodation becomes too expensive for the elderly, inparticular those with complex health conditions.

  6. SPC 6

    Expect the pattern to be repeated at the national government level. After all the governments example in selling off assets (and enabling profit making corporate utilities that can be on-sold on the international market) is one they want local government to emulate.

    In the 1990’s National charged market rents for state housing then started to sell off houses.

    Many units of the housing stock are being left untenanted and readied for sale to private developers (rebuilds) or those looking to do up a place and flick it on for an untaxed CG.

    By this means expect about 10% of the stock to be sold within the next 3 years (and another 10% in the 3 years afterwards etc). Till now they have been selling off some units and reinvesting the money in either stock renovation upgrades and some new housing. But that was just to condition us to accept change (rationalisation of the state housing stock) before their privatisation began – as per 1990’s market rents preceding a subsequent sell down.

    Apparently they see a proposed sell off of housing to social providers as the means to distract us from this. Social providers will naturally seek a good price so they can keep the rents low. So we will be assured that those on low incomes will have affordable housing.

    However unless the stock on-sold has been upgraded to WOF standard before on-sale, there will be a looming crisis. If a future government initiated a WOF scheme and social providers could not afford the cost, this would either undermine WOF legislation or require the government to pay for the upgrades (thus constrain WOF implementation till government could afford it).


    1. If social providers sold the housing they could not afford to upgrade it would no longer be available to low income tenants.
    2. WOF legislation being a threat to the profits of rental property businesses could result in legal action by corporates under TPP rules.

  7. Sabine 7

    like the others can’t afford a house/apartment/garage/car they should go into the local parks and start pitching tents.
    Unless we are happy to have people just simply die away in ditches. That of course would be an option.

    But really I believe that we could start up the sexy trend of Key-Villes, modelled after the Hoovervilles from the great depression. There is enough cardboard in this country to build a shack for everyone. Right on the Cricket Lawn or the Rugby Field, in the middle of the domain, complete with a dairy shack, a fast food shack and a medical shack.

    I am so looking forward to my golden age.

  8. KJT 8

    Asset sales have never been about reducing costs.

    Like Charter schools, rental subsidies and the highest interest rates in the Western world, they are all about more profits in the hands of the people pulling the strings, of National’s puppets..

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