This week's Salvation Army report into housing baby-boomers in retirement exposed the deepest fault-line in New Zealand society and its economy - home ownership.

The report's author, Alan Johnson, recited the facts we all knew about the fall in home ownership from a high of 74 per cent in 1991 to a 60-year low of 64 per cent.

A 10 percentage point fall doesn't sound like much and 64 per cent is still better than the rate for most of the last century. But that 10 percentage point fall disguises the scale of the earthquake underneath the population since 1991.

Johnson focused on the fate of those nearing retirement over the next 10-20 years, but one fact he uncovered says a lot more about the kids going through our schools, hospitals, prisons and into our workforces now than anything else.

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Nearly two-thirds of the 430,000 households formed since 1991 are renters. It means two-thirds of the kids in those families grew up in rental accommodation and more than 80 per cent of those are private rentals. That means they often grew up in mouldy, damp, cold and insecure housing.

It is true some homes occupied by owners are also below par, but it's a much lower proportion and owners have the option to improve their homes.

The $696 billion increase in the value of New Zealand's houses to $821b between 1991-2015 means the 64 per cent of owners who live in their houses also have financial flexibility to improve those houses.

Renters have no access to that wealth creation and are not allowed to put in a ventilation system or insulation in the ceiling.

Those 284,000 renting households formed since 1991 have also had to bounce through many schools and communities and all the roots that build families. Landlords buy and sell properties much more regularly than in other more established rental markets. The average tenancy is 15 months.

But houses owned by families are more than just stable and healthy places to bring up those families. They are also a crucial part of our retirement infrastructure.

The assumption underpinning New Zealand Superannuation is that a retiree will be living in a mortgage-free home by the time he or she stops receiving income from work.

Until now, the flow-on effect of our higher home-ownership rate in the 1970s and 1980s was that households formed 30-45 years ago have been relatively comfortable.

We have had one of the lowest rates of elderly poverty in the world. But that only works when the retiree owns a home.

Johnson's report illustrated the flow-on effects on this retirement system for baby-boomers of the falling home ownership rates from 1991 onwards. He estimated pensioners who have to ask for an accommodation supplement to help pay their rents would triple to 100,000 by 2025. Just imagine the blowout for those born after 1991.

The Government is already paying $1.2b in accommodation supplements. That is based on 2005 rent levels and the maximum levels for these supplements have not been changed since 2007. The median rent for a three-bedroom house in Avondale has risen from $320 in 2005 to $490.

Johnson called for the accommodation supplement to be reviewed. Understandably, the Government is reluctant, given any increase combined with the rise in the numbers applying for the supplement would add hundreds of millions of dollars to the bill.

It illustrates the scale of the fallout from that collapse in home ownership from 1991. Not only has it handicapped the education, health and productivity of an entire generation of New Zealanders, but it is set to magnify the likely growth in pension and healthcare costs of our ageing population.

New Zealand created "Generation Rent", as aptly described by Shamubeel and Selena Eaqub in their recent book of the same name. It also created Generation Renting Pensioner and Generation Poor Family.