Kiwis trapped in the rental market and unable to afford a KiwiBuild house will get help to buy their own home under a new Government scheme.
Housing Minister Phil Twyford confirmed to the Herald this week he was working on a plan for the Government or private investors to start buying homes in partnership with lower-income Kiwis.
While the finer details of the shared-equity scheme are still being worked on, it is likely the Government or banks will pay a share of the upfront cost of each house and the buyer will pay the rest.
By having the Government take a stake in their home, the buyer would then have a smaller home loan and reduced mortgage payments. At a later date, they could then buy the home outright.
It targets the so-called "missing middle" - the police, nurses, and teachers who do not qualify for social housing but can't afford Kiwibuild homes.
Twyford said the scheme could tie-in with Government plans to build 100,000 KiwiBuild houses for first-home buyers, which - at prices in Auckland up to $650,000 - were unaffordable for many.
"With KiwiBuild, there is a whole lot of people that would love to have a crack at home ownership but because house prices in Auckland, particularly, are so out of whack with incomes, they don't have any ability to take on a half a million dollar mortgage," he said.
However, "a much bigger group of people can benefit from KiwiBuild", if the homes were offered under a shared-ownership model, he said.
The scheme is likely to take 18 months to roll out and two to three years to be offered on a larger scale but is expected to be welcomed by community groups, who say there is an urgent need for affordable homes.
Lobby group Community Housing Aotearoa recently estimated as many as 200,000 Kiwi families - including 90,000 in Auckland - would struggle to afford a KiwiBuild home. These included the families of teachers, nurses, police officers, administrators, baristas and cleaners.
Criticism of the cost of KiwiBuild homes also took an ugly turn this week when one of the first 18 families to buy one of the houses deleted their social media accounts after being accused of being too wealthy.
Fletcher Ross and Derryn Jayne took ownership of a four-bedroom Papakura KiwiBuild home costing $649,000, but it led to questions about whether a graduate doctor and marketing manager should be eligible for the programme.
Habitat for Humanity acting chief executive Alan Thorp also feared large KiwiBuild developments could "gentrify" South Auckland neighbourhoods by pushing out low income families, who cannot afford to buy the homes.
He pointed to Mangere as an example, where land that had been occupied by 2700 state houses was being converted into a 10,000 home development made up of new state houses, KiwiBuild homes and houses to be sold on the open market.
The Government hopes to build the development at effectively no cost to its balance sheet by selling KiwiBuild homes at cost prices and using income from the houses sold on the open market to cover the cost of building new state homes.
But Thorp said the Government needed to be willing to make a loss by spending money to subsidy a shared-ownership scheme for low-to-modest income families if it wanted them to have a chance of affording KiwiBuild homes.
The Mangere development was also an ideal chance to trial such a pilot scheme before rolling it out on a larger scale, he said.
He called on the Government to use community groups, like Habitat for Humanity - which has more than 25 years' experience helping 500 families buy their own homes through a shared-ownership model - to help run the trial.
Housing Minister Twyford said he had already talked to Habitat about a pilot programme in Mangere and was "very open" to the idea.
He said many community groups had "ambitious" and innovative ideas about how to help more Kiwis into their own homes, and that he was keen to work with them.
But these plans would have to wait until he could find more money from upcoming Budgets and private investors with his first priority in Government being simply to grow the overall supply of housing.
"I got a certain pot of money in the last budget," he said.
"And we've used that to maximise the number of extra houses we can build."
'Never thought it possible': Mangere mum helped into her own home by shared-ownership model
Single mum Sanjida Pathan thought her dream of owning her own home would forever be out of reach until she heard about non-profit group Habitat for Humanity.
Now she is into the second year of living in her own Mangere home while still saving money for the deposit.
This is possible because Habitat for Humanity pays for the initial cost of building or buying new homes while selecting families to move into them.
Those families don't pay rent. Instead they make weekly affordable payments of about 30 per cent of their income to the community group, which puts the money aside - minus land rates and other costs - as savings.
After five years, the saved mone converts to a deposit and the families enter into an agreement to purchase the home from Habitat.
Pathan said she was amazed when she first went to a Habitat for Humanity presentation and was then selected for the scheme.
"I was sold because that was the only way I could see of ever getting my foot into becoming a home owner," she said.
A single mum of three children, she had no money for a deposit at the time and was only working part-time while studying for an undergraduate degree in social work.
She had also been turned out of her rental home because it had been sold to new owners and was finding it near impossible to be accepted into another before eventually turning to Housing NZ for a state home.
However, Habitat chose Pathan for its "progressive home ownership model" because of her future potential - a future she credits the community group with helping open up for her.
Since, being selected for the programme in 2013, she has finished her undergraduate degree in social work, is just about to complete a post-graduate qualification and is employed as a team leader at a women's refuge in Mangere.
"I can't talk about owning our home and not get overwhelmed because I would have never thought that could happen for us, especially the security and safety it provides for my children," she said.
She hoped the Government would help fund more schemes like Habitat for Humanity's because as a social worker she sees many families that are no different to hers, except they are trapped in a cycle of renting.
"I see it everyday what a huge issue housing is for our families," she said.
"A lot of families in our community - even though there are two parents working - they don't have enough money for a good quality of life, it all goes on rent and expenses."