John Key’s state of the nation announcement of the Government’s intention to divest itself of state houses to help social housing providers has struck a problem. The Salvation Army, touted as one of the likely recipients, has expressed significant reservations. From the Herald:
A charity tagged as a likely buyer of state houses says it is reviewing its involvement unless it can get either more capital from the Government or a very low price for the houses.
Salvation Army social policy director Major Campbell Roberts says the army has brought in consultants to crunch the numbers and found that it could not do any better than Housing NZ unless the Government put up some of the capital required to bring state properties up to acceptable living standards.
What is encouraging is that the Salvation Army has also expressed concern for the tenants and thinks it be desirable that they be involved in management of the housing.
[Roberts] says it would be morally wrong for the army to force tenants out for redevelopment without their consent, and that any state houses that are sold should go to genuine local community organisations part-governed by the tenants themselves.
“I think it’s essential … tenants are engaged in this whole exercise. If [not] it’s going to be a disaster.”
The article also contains some historical and international information which provides valuable context to the debate.
New Zealand’s social housing sector is small, with only 5 per cent of all occupied homes owned by Housing NZ, councils or community groups. That is the same share as in Australia, and double that of the United States, but far below some European countries such as England (18 per cent), France (19 per cent) and Sweden (21 per cent).
A 2010 report said 32,000 of what were then 69,000 state houses were built between 1937 and 1949, and the state funded two-thirds of all house-building via state housing and cheap home loans into the 1970s. In 1960, 64 per cent of new homes were priced below the median value of existing homes.
However state home-lending ended in the 1990s. The Productivity Commission says new homes priced below the median value of existing homes plunged from 51 per cent in 1989 to 15 per cent in 2011. We virtually stopped building houses for the poorer half of the population.
So historically the State has constructed a huge number of homes and internationally state ownership of housing is not unusual. Yet this Government refuses to even think about doing something active to address our significant and growing housing crisis.