The risk is growing that we will see more and more older people living in housing-related poverty.
That is one conclusion of the Stocktake of New Zealand's Housing released this week. It reflects a toxic combination of trends.
One is the declining rate of home ownership, which means that more of the 65-plus age group will be renting — and that age group is growing apace as the population ages.
Read more: Kiwis 'not saving enough to retire on'
The 2013 census found home ownership rates for every age group between 30 and 55 down by between 10 and 12 percentage points compared with the 2001 census. The numbers from this year's census are likely to be even worse.
The level of New Zealand Superannuation assumes that by the time people retire, they will at least own the roof over their heads.
But these days only 72 per cent of older people live in a mortgage-free house, the stocktake report says. That is down from 78 per cent in the mid-2000s and 83 per cent in the mid-1990s.
As of the 2013 census, 81 per cent of the 65-plus population were living in owner-occupied dwellings. The other 19 per cent breaks down into 10 per cent in private sector rentals, 4 per cent in social housing and 5 per cent in institutions (like residential care facilities).
The second element of this toxic brew is entrenched inequality of income and wealth, including among older New Zealanders.
If someone reaches retirement age without owning a house, it is not likely to be because he or she has instead opted to accumulate a lot of financial assets.
The most recent data from Statistics NZ tell us that as of June last year, more than half of the 65-plus age group have an income that puts them in the second lowest quintile — in dollar terms that means an annual income between $12,700 and $25,800.
That may be enough if you live in a multi-person, owner-occupied household. But if you are single and renting, good luck surviving on that sort of money.
The best source of insight into the income distribution and poverty rates are the hefty Household Incomes reports compiled by Bryan Perry of the Ministry of Social Development. Last year's reported that 9 per cent of the 65-plus population fell below one standard definition of the poverty line (60 per cent of the median income after housing costs). For single superannuitants the proportion was 15 per cent, and for couples it was 5 per cent.
The third component of this recipe for elder poverty is the state of the housing market.
The physical demand/supply imbalance will take years to correct.
In the meantime, in much of the country the rental market is very much a seller's market; the market power lies with landlords.
But they face a changing environment. The Healthy Homes Guarantee Act, provided it is properly enforced, will impose higher costs on some of them. And there is the prospect that the Cullen tax review will recommend a capital gains tax. Even if that is three years and an election away, the prospect would be expected to turn landlords' attention more to rental yields than capital gains for a return on investment, especially in an environment of rising interest rates.
Further ahead, a two-year-old report titled Homeless Baby Boomers by Alan Johnson, a respected social policy analyst for the Salvation Army and one author of this week's housing stocktake, makes sobering reading.
By 2030, when the youngest baby boomers retire, the population over 65 is projected to have increased by around 400,000, to 1.1 million or 22 per cent of the total population.
Under a range of scenarios, home ownership rates among over-65s will be lower then than they are now; the scenarios only differ in how much.
More and more people will reach retirement without the security, and imputed incomes, which come about through home ownership
On the most pessimistic scenario that Johnson models, the number of people over 65 and living in private rented accommodation will increase by 190,000 or more than 240 per cent. The most optimistic scenario suggests growth of 110 per cent or another 80,000 people.
The structural decline in home ownership rates applies as much to younger baby boomers as it does to the Generation X which is following them, Johnson concludes, and it means that more and more people will reach retirement without the security, and imputed incomes, which come about through home ownership and lower housing costs.
It also presents a fiscal challenge.
The number of superannuitants receiving the accommodation supplement has been rising steadily. At just under 40,000 as of June last year, they represented 5.4 per cent of superannuitants, half as many again as in June 2010.
The trends outlined above suggest that number is set to keep climbing.
Read more: What you need to save for a comfy retirement
This year the government will spend $1.1 billion on the accommodation supplement (altogether across the whole population). It is due to be increased in April, for the first time since 2007, and is forecast to rise to $1.5b by 2020/21.
The extent to which the accommodation supplement is a subsidy to landlords rather than tenants is unclear, the stocktake report says. That will be tested by what happens to rents this year as the belated increase kicks in.
"The supply side pressure in private rental housing markets suggests that much of this increase will be soaked up in even higher rents. If this is the case then the need for a radical review of the accommodation supplement will be more apparent." Quite.
Ultimately, the solution to this and other aspects of the housing crisis will have to come from increased supply.
The barriers to overcome there are well known, on land, infrastructure, and capital.
And, crucially, capacity constraints in the building industry.
Just as well, then, that our leading construction company is such a model of smart management and vigilant governance. Oh, wait ...
Percentage of older people living in a mortgage-free house:
• Mid-1990s 83%
• Mid-2000s 78%
• Now 72%