Are we overlooking simple changes that could help more people into their own homes more quickly? Simon Wilson examines rent-to-buy schemes, shared ownership funds and other innovative ways to make housing more affordable.
Prime Minister Jacinda Ardern says she wants to end homelessness and reintroduce a basic sense of equity to the housing market.
"We will keep pulling every lever we can," she says. "We'll keep going until all the needs are met."
It's not just interest rates and investor tax and loan-to-value ratios and the like. There are many other levers that can help make it possible for many more people to own a home. Here are some.
Rent to buy
Local iwi Ngāi Tai ki Tāmaki has partnered with Habitat for Humanity to provide a range of rental and Progressive Home Ownership housing options in Pukekohe and elsewhere in Auckland.
Iwi chair James Brown calls the initiative "a great opportunity for Ngāi Tai ... to help more tribal members get access to affordable, warm, and healthy homes".
Habitat spokesperson Conrad LaPointe says the partnership is "hugely important as we seek to address housing access and affordability in one of the more challenging housing markets in Aotearoa New Zealand".
Progressive Home Ownership (PHO) is a $400 million Government fund, announced last year, for households that can manage to pay their rent but cannot save a deposit to buy. The money is targeted both at lower-income households and median-to-higher-income households facing high rents and fast-growing house prices.
The fund covers shared ownership, rent to buy and leasehold schemes and is expected to help between 1500 and 4000 households into home ownership. It's available only through community housing providers (CHPs) but a "direct to households" option will be offered later this year.
Chris Glaudel, of Community Housing Aotearoa, says in effect, the fund "has the potential to provide a lot of people with permanently affordable below-market rentals, so they can save to buy".
Dominic Foote, at the Housing Foundation, points out the fund is capital intensive "but the funding is not lost to the household, as it is with almost every other first-home buyer scheme". This is because PHO funds come in the form of a loan to the CHP, so the cost to the Government is no more than the interest write-off on the loan.
The CHP sector likes the scheme a lot. The National Party is less impressed, not because it opposes the aims, but because it says they're not being met.
In March, spokesperson Nicola Willis scoffed when Housing Minister Megan Woods made a video to announce the scheme had "helped 12 families into their own new homes".
"It's a scandal, really - an utter embarrassment," said Willis. "The fact that the Housing Minister is showing off about it beggars belief. It makes me think she's completely out of touch with just how bad housing issues are in the community."
Woods says it was early days. A spokesperson says after phase 1, four CHPs had 166 households in the programme and, by late June, 26 providers had inquired about joining.
Researchers Kay Saville-Smith and Ian Mitchell reported in a paper at the end of last year that 142,900 households were spending 50 per cent or more on housing. That's the marker for what's called "severe housing affordability stress". At best, PHO is funded to help only 2.8 per cent of them to buy their own homes.
Meanwhile, the Government spends $3.5 billion a year on the Accommodation Supplement (AS) and Income-Related Rent (IRR), two schemes designed to help people who could not otherwise afford it to stay in their homes.
There's an obvious social good there, but neither scheme helps tenants towards home ownership and both of them have the unintended consequence of transferring wealth from the state to landlords.
Saville-Smith and Mitchell noted there were 38,000 renting households with median or higher incomes that were receiving AS, and suggested that money should be redirected into Progressive Home Ownership schemes. Over three years, they said, that would make a further $558 million available to deliver "$1.6 billion of new, affordable homes".
Economist Shamubeel Eaqub thinks bigger. He reckons half that $3.5 billion should be directed to PHO schemes.
He also says social housing new-build plans are nearly 14,000 short of what we need right now. The problem is nationwide, although it's especially acute in Auckland, as this graph shows.
Eaqub's figures ask the question: If we can spend billions on rent subsidies, why aren't we spending more to eliminate those waiting lists?
Money for good
Next month Community Finance, which arranges financing for CHPs, will launch a new shared ownership fund. It's aimed not just at Kainga Ora clients, but also at teachers, nurses and others on middle incomes who can't afford to buy.
The aim is to remove the barrier of finance for CHPs that want to build but don't have the equity or debt to do more.
"Positive Capital will go to the wholesale financial market," general manager Paul Gilberd says, "and offer investors a diversified portfolio of residential property." Investors will share in the ownership of several housing projects, rather than putting their money into just one.
"They get to earn a fair return and to do good," Gilberd says.
The fund will be called Positive Property and will co-opt the progressive home ownership model, but not for individuals. It's the CHP that will take on the ownership. That's charities building their own asset base for ongoing use.
Related to this, Gilberd's colleague James Palmer says, New Zealand is going to need some big changes in the long-rental area.
"Decent housing and long-term secure rentals," he says. "We're going to need some corporate and institutional action in this space. Big entities to provide decent long-term rental security."
Build-to-rent. And it's not just at the social housing end, either. Developers with upscale projects are already operating in this space.
Suburban high rise
Seen the Westlight complex in Glen Eden? Opened in April, it's a two-tower complex with 167 apartments including 90 public housing units, 34 KiwiBuild homes and 43 private apartments. All built in a leasehold partnership between the Ted Manson Foundation, Compass Housing and Tūāpapa Kura Kāinga: the Ministry of Housing and Urban Development.
With a train station nearby, shopping centre and beautiful views to both the Waitākere Ranges and back to the city, Westlight is sold out.
Over the next few years a complex like Westlight will be coming to a suburb near you. Over the next few decades, there will be many.
Glen Eden still has lots of suburban homes on their own sections, and always will. But citywide, apartments already account for most of the new builds; the Westlight model, with its mixed housing types, built on "brownfields" sites within established suburban areas near transit stations, will become common.
Population growth, the climate crisis, traffic congestion, ever-rising property prices and a sense that we could, surely, build stronger communities if we really wanted to: they're all forcing the pace of change. The Government has a new National Policy Statement instructing councils to help make it happen and a $3.8 billion Housing Acceleration Fund to push the process along.
Who knows, in cities where progress is slow, will compulsory acquisition of vacant brownfields land become a thing?
Make your own rules
New ways to buy a house. How about new ways to own one? Cohousing, where several households jointly own a housing complex, is now established in Auckland.
Some people are buying with their flatmates, pooling their resources for a deposit in the knowledge it's better to pay a mortgage than rent. You need good friends, or perhaps good rules, for that.
Others, in retirement, are reverting to a similar model. Friends with few assets bar their houses chipping in to buy a big new home together. The advantage: everyone gets to free up some of their capital.
The drawback: you have to live out your days with that old fool just down the hall? No thanks!
The housing market will stay mad for the foreseeable. The good thing is, that's going to keep pushing us to find new ways to live decently in it. There's a lot more to come.
House hunters respond
On Saturday we shared the stories of first-time house hunters. Here's what they have to say about the ideas in today's Home Truths coverage.
A 'rent to own' initiative is a great alternative to the standard way of buying a house in New Zealand right now.
Let's be honest with ourselves here, while the average income stays around the same and house prices are continually rising - even in a global pandemic - the chance of owning a home (especially in Auckland) gets more and more unlikely by the passing day.
The way the current market stands, we are in absolute crisis, and we need to be thinking outside of the box to find solutions to this - because if we keep going the way we are, more families will become homeless or face paying high rent for the rest of their lives, with no potential of having the financial security of owning their own home.
This creates issues for future generations who face financially supporting them in their retirement years.
A variety of options is good, including complexes that are not all one 'type' of home or scheme.
We are slow to learn from overseas in New Zealand, or to change the laws or culture to be able to use such learnings, but all are worth a go.
It is still a shame to essentially lock out some people, though, due to them having 'an OK job'; buying alone is still financially impossible.