An era ended yesterday. The idea that a state house was awarded to tenants for life has been consigned to history. Legislation that put an end to this idea passed through Parliament late last year, remarkably with little comment. The law came into effect yesterday just as quietly. From now on, tenants will face a review every three years to see whether their income or circumstances have improved.

The absence of much protest suggests the public attitude changed long ago. Yet it shows some courage on the Government's part. Sooner or later an elderly person is going to be evicted from a house she loves in a neighbourhood where she has lived most of her life, so that a family may be given the three-bedroom home she has occupied alone, and she will be on television.

Normally Housing New Zealand would be able to offer her a smaller but reasonably alternative home. But another historic change that took effect yesterday means the corporation no longer decides who gets a house.

The role has been passed to the Ministry of Social Development, which will assess applicants' housing need as part of all forms of assistance they require. That makes sense and should make the system fairer.


However, the reforms go further. When the ministry decides a family needs housing and cannot afford a market rent, it will not necessarily send them to Housing NZ. A number of other agencies, such as the Salvation Army or iwi authorities, will be invited to provide "social housing" for tenants with a state subsidy. Private landlords, too, could become approved providers if their standards of accommodation and care are up to the mark.

The Government hopes to create a market in the supply of rent-controlled housing. Housing NZ will be just one of several agencies competing for the ministry's clients, allowing the ministry to do business with the agency offering the highest quality for the lowest cost. That is the theory. In practice, some of the ministry's clients will be much more appealing tenants than others. Will the providers be able to choose? If so, will the most difficult tenants be forced on Housing NZ? In that event, the contest between providers would not be fair.

In fact there are few social housing agencies as yet. The Government is trying to incite a few more into business. It might take some state houses from the corporation to get them started.

Housing NZ has only 5447 tenants paying an estimated market rent or close to it. It has 63,187 who pay rents fixed at 25 per cent of their incomes. The rent reviews will start with about 800 of the tenants paying market rents. Those chosen will have no children living with them and they will be in areas with plenty of private rental housing available. They could include elderly and even disabled tenants who earn a good income but have a state house adapted to their needs.

It will be a delicate exercise and the Government deserves credit for taking it on. Clearly nervous at the possibility of adverse publicity, it promoted legislation that reserved the right for ministers to grant some groups exemptions from tenancy reviews. The Cabinet has decided not to exclude any groups at the outset. Social Development Minister Paula Bennett says it wants to learn more about people's circumstances through the process.

It may learn the hard way, though she adds that no disabled or elderly will be asked to give up a state house "in the coming year" unless they wish to.

13 Apr, 2014 9:00am
5 minutes to read

That takes the Government past the election, but eventually a hard case will test its resolve. It will need to stand by the principle that state housing is temporary help, not lifelong security. It is a big change.