Millions spent weekly in Rotorua on supplements to help pay rent

An increasing number of Bay renters are under financial pressure amid the housing crisis and needing more assistance from Work and Income. Photo / Getty Images

Nearly $3 million a week is being spent helping thousands of people in the Bay of Plenty keep a roof over their heads amid the region's deepening housing crisis.

Thousands across the region qualify for the Accommodation Supplement – a non-taxable benefit to help pay for rent, board or the costs of owning a home.

Latest figures from the Ministry of Housing and Urban Development show $2,907,599 a week was handed out across the region in accommodation supplements in the last financial quarter of last year.

This was up $138,455 a week on the quarter ending in September, and $472,330 a week on the quarter ending in March.

Whānau Ora North Island agency commissioning chairwoman and Rotorua councillor, Merepeka Raukawa-Tait, said people struggling to keep their head above water resulted in the mental health of families, including children, suffering.

Benefits were not long-term solutions but helped keep families out of "dire straits", she said, and even those working were struggling with reduced hours as a result of Covid-19.

Research showed that financial pressure was the biggest contributor to relationship breakdowns, she said.

"We can look forward to more family harm incidences, mental health problems and disruptive behaviour in children. All a result of people struggling to keep their heads above water financially."

Across the region, 32,469 people receive the accommodation supplement, with more than 14,880 in Tauranga and the Western Bay of Plenty, according to the latest figures from the Ministry of Social Development.

This was followed by Rotorua where 8592 people received this support.

The grants shot up by 3729 across the region in a year - 1845 in Tauranga and the Western Bay of Plenty, and 1254 in Rotorua.

The most someone living in Tauranga can get is between $165 and $305, including solo parents with two or more children.

The median rent in Tauranga is $580 and $520 in the Western Bay of Plenty

The most someone can get in Rotorua is between $80 and $160, while the median rent is $465.

Rotorua's Budget Advisory Services manager Pakanui Tuhura said the money was a "big help" for clients, mostly renters.

"Frankly, every little bit helps," he said, but how much it helped varied.

For one household it might be adequate as they could have low costs for things such as food and power, but this might not be the case for another family, he said.

Food grants also helped a lot, however, the number of food grants available to an individual was limited and once that runs out people began to rely on foodbanks, he said.

Baywide Housing Advocacy Service housing advocate and solicitor Shard Loibl said more people who worked full-time were needing a top-up from Work and Income.

The numbers illustrated the rental crisis, and the supplement was not keeping pace with rising rents, he said.

"So they [Work and Income] give food grants to help the families too, but then limit how much they are allowed, so families then rely on the foodbank to survive."

Rotorua mayor Steve Chadwick said the numbers reflected the "serious housing and social issues".

"We need community safety issues to be addressed, and we need to work on a pipeline of social and other housing," she said.

Chadwick said the council had been lobbying for "some time now" for a more highly co-ordinated all-of-Government response, and for Government agencies to work with the council, iwi and other community stakeholders on Rotorua-specific solutions.

She said she was "really hopeful" Housing Minister Megan Woods' response to the council's calls to send government agency representatives to Rotorua would mean some of the change needed is made in the coming weeks.

Housing and community safety were "a priority for the district" and key planks in the proposed 2021-31 Long-term Plan.

"While they aren't the council's [problems] alone to solve, we need the mandate and resourcing to enable us to contribute and work effectively with our partners on solutions."

Accessible Properties general manager Vicki McLaren said, in her view, the accommodation supplement invested money in the wrong place.

The model was an inefficient use of resources, with a significant investment in temporary and emergency accommodation - at a high social cost, McLaren said.

The figures were "deeply worrying but not surprising" and reflected the scarcity of rentals and growing desperation for housing.

This was "out of kilter" with increasing rental costs and added to what she described as a misplaced level of government investment in temporary emergency accommodation - mainly motels.

"As with any system there are winners and losers and as is often the case, the vulnerable in our communities pay the price."

Liz Davies, general manager of Social Link, the umbrella group for social services in the Western Bay of Plenty, said services were seeing growing numbers of people who had never needed help before seeking support with food and budgeting.

"I do not think the supplement is sufficient given the increasing numbers of people requiring assistance."

Many felt ashamed about their situation, which had a big impact on mental health: "The lack of control over one's life, a feeling that you're not capable, concern about whether you will find work or be able to afford accommodation, a loss of a sense of hope of things getting better."

Social Development and Employment Minister Carmel Sepuloni said changes were made to the supplement's maximum rates as part of the Families Package in 2018, reflecting rental costs at the time.

She said the supplement was a "vital" component of the social security system and helped those with high housing costs relative to income sustain their accommodation in the private rental market.

"It is only a partial subsidy and not intended to cover all of a recipient's housing costs."

A Ministry of Housing and Urban Development spokesman said the "intention" was that between 2021 and 2024, between 430 and 450 new public houses and between 150 and 460 transitional houses would be delivered in the Bay of Plenty.

Since 2018, nearly 100 additional public housing places had been delivered in the region and about 200 more were expected in 2021 and 2022.

One of the key issues was a lack of build-ready land and so the Government committed $3.8 billion to the Housing Acceleration Fund.

He said the long-term goal of increasing public housing needed to be balanced with the imperative to provide immediate support to those without a home.

"We know there are regions and cities where housing demand has grown fast, resulting in rising rents, acute housing shortages and housing deprivation."

Ministry of Social Development employment and housing policy general manager, Hayley Hamilton, said they knew the rising cost of rents made it difficult for families, and the supplement was one of several ways to help with housing.

She said the supplement supported about 12 per cent of the national population.

Other ways MSD helped with housing included assessing public housing eligibility, and support with private rental costs, such as bonds, rent in advance or rent arrears.

She said the Government also introduced the Families Package, increased main benefits by $25 a week, indexed main benefits to average wages, and increased the abatement threshold, to help those in need.