Soaring property prices which have locked many New Zealanders out of home ownership are part of an even bigger housing problem. Social issues reporter Simon Collins outlines the long term threat to retirement savings and the pressure on families who cannot afford to rent, let alone buy.

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West Auckland grandmother Lee Hickey is moving out of her house to make room for her daughter, son-in-law and their two children. "I live in the house, but I'm down to one room, and I'm about to move into a sleepout that I'm having built because there is just nothing out there that they can afford," she says. "He's on the minimum wage. He works hard, from 7am to 5.30pm and sometimes on Saturdays, but I've seen his pay packet and it's barely clearing $500 a week after tax. Rents are that anyway, let alone all the bills that they require, and they have two children." The young family is part of the unseen face of Auckland's housing crisis - a crisis at two levels. The upper level is the skyrocketing price of buying a house, which has closed off home ownership to thousands of people who don't have wealthy parents to help. Auckland's home ownership rate has dropped from a 1986 peak of 73.9 per cent to 61.5 per cent in 2013; in the rest of the country it's down slightly less, from 73.6 per cent to 66.2 per cent. There is also a lower level: growing numbers who are doubling up with relatives and friends because they can't afford even to rent independently. Almost one in seven Aucklanders (13.3 per cent) live in households with two or more families or other relatives, up from 9.3 per cent in 2001, compared with an increase in the rest of the country from 4.1 per cent to 5.9 per cent. Some double up by choice, especially in non-European ethnic groups where multi-generational households are the norm. But others, like Hickey's family, are there because they can no longer afford to live independently. Why housing matters Arguably home ownership does not matter. Shamubeel and Selena Eaqub point out in their book Generation Rent that some of the world's richest countries, such as Switzerland, have very low home ownership rates but tenants have long-term security unless a landlord has a good cause to evict them. What does matter is that people have adequate shelter, along with other basic elements of wellbeing such as food. Kate Amore of Otago University suggests adequate shelter requires three elements: structural habitability; privacy and control; and the security of being able to stay there. Houses that are structurally uninhabitable, such as leaky or uninsulated homes, are harmful for health. Research has found people go to the doctor and to hospitals less often, and have fewer sick days off work or school, after their homes have been insulated. People in overcrowded houses are much more likely to get infectious diseases such as meningococcal disease and rheumatic fever. And people in more secure housing are more likely to build what social scientists call "social capital". Matthew Roskruge of Waikato University found in 2011 that New Zealanders who owned their own homes or lived in state houses were more likely than those in private rentals to participate in sports and other community activities and to believe that other people could be trusted. "Social capital is the linkages between people," he says. "The idea is that networks matter because you get information from them and the more information you get, the better you are at finding the best prices, finding jobs, and getting support or help. "I guess too it means that children are staying in schools longer, people are staying on community boards, they start volunteering and participating in those sorts of activities. It improves community cohesion, lowers crime, and you have better governance and educational outcomes." His finding that state house tenants were just as involved in their communities as homeowners predated the end of Housing NZ's "home for life" policy in 2014. All state tenancies are now reviewed regularly. Where we've come from Historian Ben Schrader says declining home ownership threatens what has been a central part of the New Zealand dream. "It challenges that whole idea that has been there since 1840 that you could come to New Zealand and get your own piece of land and build your own house on top of it and that was your castle," he says. By 1916 more than half of all Kiwis, compared with less than a quarter of Britons, owned their own homes. The NZ History website says: "The proportion of New Zealanders owning their own homes rose from 52 per cent in 1916 to 61 per cent in 1926, giving this country possibly the highest home-ownership rate in the world." The state financed more than half of all new housing through state houses and lending money for families to buy houses from 1936 until the late 1960s. National prime ministers Sid Holland and Keith Holyoake spoke proudly of our "property-owning democracy". By the peak years of 1986 and 1991, when 73.5 per cent of New Zealanders owned their own homes, renting for most people was only a brief prelude to ownership. Philip Morrison of Victoria University has shown that 84 per cent of people aged 60 to 65 in 1991 owned their homes, leaving only a small minority entering retirement in state, council or private rentals. Where we're heading State support for home ownership ended abruptly. Governments stopped lending for housing, and sold off existing mortgages and some state houses, from 1992. Home ownership has fallen in every census since 1991, dropping below Britain by 2001, and at 64.8 per cent is now at its lowest since 1951. The decline has been steepest in Auckland. Reducing home ownership and reviewable state tenancies are undermining the stability that builds social networks. In Auckland 35 per cent of renters, but only 14 per cent of homeowners, moved in the year up to the 2013 census. Most new houses are much bigger than older houses, but the Building Research Association's 2010 housing conditions survey found 89 per cent of homes built since 1990 are owned by the people who live in them, compared with 76 per cent of the homes built before 1990. Renters, who now make up 31 per cent of NZ households and 35 per cent in Auckland, tend to get the older, poorer-quality houses. The 2010 survey rated 44 per cent of rented homes, compared with 25 per cent of owner-occupied homes, as in "poor condition". Otago University research rates the quality of state rentals below owned houses, with the average quality of private rentals even lower than state houses. These trends may, of course, change in the future. But home ownership has been declining steadily now for 25 years nationally, and for 30 years in Auckland. Auckland University property expert Laurence Murphy says the decline will continue as long as housing is left to the market. "The market is good at supplying market demand," he says. It builds houses for those who can afford them. "But it's not necessarily good at meeting our housing needs." The future: children The social effects of declining housing security are lagged. Most of today's young adults, like Lee Hickey's daughter, grew up in secure family-owned homes. Even in 2013, 65 per cent of Aucklanders in their late forties - Lee Hickey's generation - lived in owner-occupied homes, down from 83 per cent of the same age group 30 years ago. The biggest crash in ownership has been for people in their early thirties, where the ownership rate in Auckland has plunged from 70 per cent to 45 per cent. This is exactly the same age group in which people are now most likely to become parents. Their children, who are now being born, will grow up with much less security. On average they will move more often, their schooling will be disrupted, and they will be more likely to live in densely-packed, poor-quality overcrowded rental housing that will be bad for their health. "We've been there before, in the period after the [Second World] War, when people often had to stay with their relatives because there wasn't enough housing," says Philippa Howden-Chapman of Otago University. "It's pretty stressful ... It's very hard to study in a crowded house unless people really prioritise a place for the kids to be quiet.". The future: adulthood By the time today's newborns reach adulthood in 20 years, researcher Ian Mitchell forecasts that fewer than half of Aucklanders will own their own homes. Again there will be lagged effects. Roskruge notes that in the last World Values Study in 2009, New Zealand still had the world's highest level of participation in community activities, and the fourth-highest level of trust in other people - a legacy, at least in part, of high historical home ownership. As housing security weakens, so may social cohesion. "Home owners are significantly more likely to trust in others and participate in various activities," he says. "The international literature shows a relationship between increased trust and lower crime, and you do find social cohesion is related to [lower] crime.". The future: retirement Retirement Commissioner Diane Maxwell says our NZ superannuation, at $385 a week after tax for someone living alone, "is based on the idea that you are mortgage-free in a home". "As we see more people come through and reach 65 either not homeowners or with larger debt against that home, then we are going to have some challenges," she warns. "The reason why I spend 65 to 70 per cent of my effort on people under 65 is that we can see this coming. Older New Zealanders in all the statistics are the group least in poverty, they are predominantly homeowners, and they have benefited from this huge growth in house prices." The problem - described by Ian Mitchell as "a ticking time bomb" - also means that while the next generation may get into a house through inheritance, that inheritance is coming later as people live longer. Susan St John of Auckland University's Retirement Policy and Research Centre says it is also less certain, now that people living into their late eighties and nineties are more likely to have to spend their savings on care for dementia and other ailments. "So you are not getting the pass-down happening early enough to be of use," she says. Maxwell worries that people reaching retirement still with a hefty mortgage will have to use their KiwiSaver funds, which become accessible at 65, to pay off the house. "So it will mean that KiwiSaver, though it's a good sum of money, will be deployed on debt, which is partly what they are seeing in Australia," she says. Human cost of the housing crisis As Howden-Chapman says, we have been here before. But we did something about it. "After the war the central government passed money down to councils to help house all those people staying in Nissen huts on the Domain," she says. "That was when there was a big boost in councils building housing. It was a very good idea, but it needed central government money to do it."