Housing New Zealand's 'house for life' policy and its near-monopoly of social housing ends with major reforms on April 14. Simon Collins reports on the country's first big community- and iwi-led residential project

A $120 million housing project at Weymouth is being touted as a "pathfinder" for what could be New Zealand's first large-scale affordable new housing project in 30 years.

It is not being built by the state like the vast estates created in places like Glen Innes and Otara from the 1930s to the 1960s.

Nor is it a purely private sector project like recent developments in Stonefields or Karaka, where houses have gone largely to the upper end of the market.

Instead, Maori entities and community housing providers are creating a unique "third-sector" project backed by a $29 million Government grant to build a mix of subsidised rental housing for low-income tenants, rent-to-buy and shared-equity homes for the next level up, and homes for sale on the open market.


The 282-unit project is known by Weymouth's Maori name of Waimahia.

"Waimahia is a pathfinder project for us, and a huge outcome of this project has been the partnership between mana whenua [people of the land] and the housing providers and the Maori Trustee," says Paul Majurey, a lawyer of Ngati Maru and Marutuahu descent who chairs the Tamaki Collective of 13 Auckland tribes. "It's the first scale partnership for community housing in New Zealand, and the partnership has a strong desire to take that concept forward for other community housing projects in Auckland."

It is an outcome of two separate strands of public policy - social housing reform, and a long process of compensating Maori for the loss of their land 150 years ago.

Social housing reform

Social housing reform is a logical next step after the Key Government's radical welfare changes. Both reforms recognise that just giving people money and a low-rent "house for life", without conditions and wrap-around support, traps them at a level just above absolute poverty by reducing state support if they try to become independent.

The system has entrenched a poverty of spirit, only partly offset by a widespread culture of cheating. And the cost to taxpayers of housing subsidies alone has reached almost $2 billion a year.

An advisory group in April 2010 found the country's 69,000 state houses were not all being used for the most needy tenants because of the "house for life" policy, and recommended reviewing all tenancies to give social housing to "those who need it for the duration of that need".

To reduce the drain on state finances, it suggested leveraging state funding into "third sector" housing by giving community groups the same subsidy that Housing NZ gets to make up the difference between rent, set at 25 per cent of the tenants' income, and market rents. The subsidy, plus their own philanthropic resources, would enable the groups to borrow commercially to lift their share of social housing from 6 per cent to 20 per cent within five years.

The Government eventually adopted all the recommendations. The key reforms, making all social tenancies "reviewable" and paying community providers the same subsidy as Housing NZ for income-related rents, take effect on April 14.

Two members of the advisory group, NZ Housing Foundation executive director Brian Donnelly and Salvation Army social policy chief Major Campbell Roberts, who is also a Housing Foundation trustee, knew that Housing NZ was sitting on a 16ha block of land at Weymouth that was once a farm for the adjoining Child, Youth and Family residence.


They brought in the Community of Refuge Trust, an Auckland charity that had been part of previous Housing Foundation projects.

"We made some suggestions or proposals to the Housing Minister [then Phil Heatley] in July 2010 that something needed to be done on the land for affordable housing in Auckland," says Community of Refuge chief executive Peter Jeffries.

"The Government then decided to take it off Housing NZ and they went through a surplus Crown disposal process and offered the land on first right of refusal to the Tamaki Collective."

Restoring Maori mana

Mr Majurey says the Government's Social Housing Unit approached the collective in December 2011 under a protocol giving the collective "the opportunity to be the developer" of any Crown land in the Auckland region where the Government plans to develop the land for housing with other partners.

The collective jumped at it. Its 13 tribes, who had once owned the whole of Auckland, had lost almost all of it. Mr Majurey says Maori and Pasifika people now make up the vast majority of state house tenants and applicants in South Auckland.

"So there is a crying need in this part of Tamaki Makaurau [Auckland] to care for our people," he says.

The players

Tamaki Makaurau Community Housing Ltd, incorporated in April last year, has four equal shareholders: Mr Majurey in trust for the Tamaki Collective; the Maori Trustee; the Housing Foundation; and the Community of Refuge Trust.

The Tamaki Collective includes Ngati Whatua tribes at Orakei and in the Kaipara area, which have both settled their own claims with $18 million and $22 million respectively. Mr Majurey expects seven other tribes in the collective to settle this year, and the other four over the next three years.

The collective deal itself involves no money, and even the individual settlements are an infinitesimal fraction of the $352 billion value of the region's land.

"What the [collective] settlement provides is that opportunity as a first right of refusal that enables us, through relationships and partnerships and the institutions that are available, to take that long-term development approach," Mr Majurey says.

The Maori Trustee is there in trust for the Auckland and Onehunga Hostels Endowment Trust, which was endowed by the Government to build a hostel for visiting Maori in Mechanics Bay in the late 1850s.

The trust still owns a block of flats in Bedford St, Parnell, that was built in 1969 for Maori moving to the city for study or apprenticeships. The building was upgraded last year and rented out to earn rental income of over $300,000 a year, which the trust promised to use for "chosen Maori housing projects". At least half of the 12 apartments' rooms were reserved for Maori postgraduate students.

The NZ Housing Foundation was formed in 2003 with support from The Warehouse founder Sir Stephen Tindall and his wife, Margaret, a long-serving volunteer at the Northcote emergency house De Paul House. At balance date last March it had an outstanding $2.6 million loan facility from the Tindall Foundation.

The foundation has filled a hole in the housing market that had been left vacant since the state ended low-interest loans to first-home buyers in 1992 - helping those who are not poor enough to get a state house, but not rich enough to buy a house on the open market.

It has pioneered "shared equity" schemes, where the foundation takes an initial share of the equity (typically 25 per cent) so the buyer only has to stump up three-quarters of the market price up-front. A variation is its "rent to buy" scheme where people rent initially and then use part of the increased value of the house after five years towards a deposit to buy it.

The foundation has built more than 300 homes so far, including 70 in a block on West Coast Road in West Auckland.

The Community of Refuge Trust (CORT) was founded by the Ponsonby Baptist Church in 1987 to help low-income people struggling with escalating housing costs in the inner suburbs. The church still hosts the trust's office and supports tenants' social events.

The trust has had an Auckland District Health Board contract to house people with mental health issues since 2006. It has used Government grants to expand to Glen Innes, Otahuhu and Mt Wellington and now has 218 tenancies paying rents as low as 60-65 per cent of market rates in the inner suburbs, or closer to market rates further out.

The plan

The Waimahia site, sloping down from Weymouth Rd to the Manukau Harbour, sits in a low-income area. Weymouth Primary School is ranked decile 2, with a roll that is 43 per cent Pacific and 34 per cent Maori.

It is in the Manurewa Local Board area, where the home ownership rate in last year's census was 55 per cent, below the Auckland average of 61 per cent. The consortium's aim is to lift that to "close to 80 per cent" in the new development. About 45 per cent (127) of the 282 homes will be sold on the open market for between $325,000 and $475,000. Almost 35 per cent (up to 99) will be developed as shared-equity and rent-to-buy homes by the Hostels Endowment Trust, the Housing Foundation and Habitat for Humanity.

Habitat Auckland director Warren Jack says Habitat will build about 20 rent-to-buy homes. The split of the rest is still fluid. Mr Majurey says the Endowment Trust will build a number "in the tens" as part of its mandate to house Maori people and is already circulating application forms among Maori groups.

About 20 per cent (56) of the total homes will be low-income rentals. CORT will build 20, IHC subsidiary Accessible Homes will build five or six with priority for disabled people, and Mangere-based Monte Cecilia, a Catholic sister organisation of De Paul House, will build two or three. Major Roberts says the Salvation Army is also keen to be involved, possibly with some housing for the elderly and some for low-income families.

Mr Donnelly says about 90 per cent of the homes will be two-storey, on lot sizes for the 92 houses in stage one averaging 274 square metres - enough for everyone to have "their little plot of land".

He says consultation with local residents found an "overwhelming" desire to own their own homes and gardens.

"We had battles early on with the Government saying, 'We want you to target a lot more of the low-income rental market'," Mr Jeffries says. "If it was the state, it would have been a much higher density."

Who's paying

Housing Minister Nick Smith announced a $29 million grant for the project from the Social Housing Unit last October, including $8.9 million to buy the land. The land's rateable value in 2011 was $11.6 million.

Mr Donnelly says the rest of the $120 million will be met by every participating entity putting in its own capital and borrowing from banks and other commercial lenders, and eventually selling most of the homes.

The site was the first "special housing area" designated by Auckland Council, putting it on a fast track for resource consents which were granted for earthworks and subdivision late last year.

Mr Donnelly expects the first homes to start in May-June and be ready to move into in August or September.

No more 'house for life'
* All state tenancies will be reviewed regularly from April 14, ending the policy of providing a state-owned "house for life''.
*People's needs for any "social housing'' - state- or community-owned - will be assessed regularly by the Ministry of Social Development.
*Tenants will pay only 25 per cent of their incomes in rent in both community and state housing.
*Community housing providers will get the same subsidy as Housing NZ to cover the gap between income-related rents and market rents.

* Upheaval for state tenants.

Tribes out to influence look of city

Auckland's 13 Maori tribes say they want to "change the face of Auckland" through infrastructure and housing developments, starting with a scheme for 282 affordable homes at Weymouth.

The Tamaki Collective, which negotiated a historic deal with the Government in 2012 to make redress for the loss of tribal land in the region over the 172 years since the Treaty of Waitangi was signed in 1840, plan to use a "right of first refusal" over all Crown land sold in Auckland in the next 172 years to promote projects benefiting traditionally low-income Maori and Pacific people.

The Weymouth project, their first, will provide a mix of homes for sale on the open market, subsidised social rental housing, and rent-to-buy and shared-equity homes with partners such as Habitat for Humanity and the NZ Housing Foundation.

The collective has also signalled interest in the former teachers' college in Epsom, which Auckland University wants to sell to fund its new campus on the former Lion brewery site in Newmarket.

Lawyer Paul Majurey, who chairs the collective, said the Epsom site would be suited to "some form of mixed development", but the collective had not yet received formal notice of the land being available because a bill implementing the settlement is still with Parliament.

He said the $120 million Weymouth project would keep houses cheaper, and keep more land in open space, than a purely commercial developer would have chosen.

"That is the blueprint we want for the future."


For the Herald's full coverage of residential housing issues, go to tinyurl.com/aklhousingproject.

On the web: www.waimahia.co.nz.