'We are in deep trouble': Dire lack of state housing creates a new homeless

New Zealand's state house numbers have fallen so low some experts wonder if we can ever catch up, despite a massive government build programme. Photo / file

The future demand for state houses will outstrip the Government's build targets by almost double, a Herald analysis has found.

The dire shortfall is expected to force thousands more into homelessness, including increasing numbers of low-income working parents and retiring baby boomers who don't own property and can't afford escalating rents.

Commentators and officials fear the housing undersupply has now grown to the point it may be irreversible, with some predicting a new reality where living in caravan parks or motels is normal.

"In the current market we see no reasons why the state housing waiting list won't continue to expand at its current rate," said Community of Refuge Trust's chief executive Peter Jeffries.

That would mean burgeoning costs in emergency housing - already up to $100 million a year - as well as a raft of social issues, such as health problems for children.

"If we don't get housing right – everything else suffers – it affects everyone," Jeffries said.

Peter Jeffries, from the Community of Refuge Trust, says there is no way he can see the state house waitlist decreasing in the current environment. Photo / File

The Government plans to add 1600 state homes per year to its books, increasing the total stock to 73,000 by 2022.

However, Herald analysis found at the end of the year to June, total demand for state housing had already hit 78,500.

By 2022, that is expected to hit at least 84,500 - if not higher - with demand forecast to keep surging by 2000 households a year.

And even if demand doesn't grow at all - which seems almost impossible - at the current build rate it will still take eight years to find those on the existing waitlist a home.

"If we don't do something about state housing now we are in deep trouble," said economist Shamubeel Eaqub.

He believed state house numbers needed to increase by 50 per cent at least to catch up.

"We have given up many decades of progress. At least this government is looking to increase stock, but in reality their ambition needs to be much bigger."

Economist Shamubeel Eaqub says the Government needs to expand its state housing programme by 50 per cent/ Photo / file

Treasury has warned Housing Minister Megan Woods she must act or risk growing housing hardship. More subsidies for renters would not be enough to meet demand.

"Even with substantial increases in budgets, housing assistance cannot address housing need across the spectrum in the current housing environment," it said.

Officials advised Woods to make radical reforms to allow for huge swathes of houses to be built. The proposed new "cut through" powers planned for housing mega-agency Kainga Ora include the ability to steamroll councils who would not cooperate.

"[More houses] will require changing council's choices ...requiring actions from them they do not wish to pursue ... or bypassing them," it said.

New Zealand's housing crisis - driven by underinvestment in both the public and private market - has left the country with the highest house prices relative to income in the OECD.

In addition to a lack of state homes, the past 30 years also wrought falling home-ownership rates, a lack of new rental supply, poor tenure security and rising rents.

A resulting trickle-down effect has priced the most vulnerable families out of private rentals and into overcrowded houses - or onto the street.

Working mum-of-three Ani Hill was one of those - she spent 10 months in emergency accommodation in Auckland, applying for at least 30 rentals and getting none.

"I would be on the computer at work every single lunchtime looking for houses. We would go to viewings every weekend and get knocked back," Hill said.

"I would ask why and it was because I had a single income, and three children."

Ani Hill, mum of three, spent 10 months in emergency housing. Photo / Dean Pearcell

Hill is now renting a three-bedroom home for $480 a week, leaving her barely enough money to eat. But she had no other choice - the wait for a state house was at least two more years as there were other families with higher needs.

Woods said the coalition government was building more state homes than at any time in the last 20 years, with 2500 public houses under construction.

She said if National had built at the pace she was aiming for, there would be an additional 14,400 homes already - the entire waitlist gone.

Housing Minister Megan Woods says the Government is building more state houses than at any time in the past 20 years. Photo / file

"It's heart breaking to think that this problem could have been completely avoided," she said.

The National Government also had a state house programme. Its target was to hit 72,000 by 2022.