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Government policy barrier to social housing growth

Government policy barrier to social housing growth, expert says

Growth in the New Zealand community housing sector is inhibited by the government’s policy of requiring state houses to be purchased by social housing providers, an Australian expert says.

Community Housing Federation of Australia executive director Carol Croce says this means that the rental income New Zealand community housing organisations receive ends up being used to pay back the purchase costs, rather than being directed into building more social and affordable housing.

By contrast, in Australia where the government transfers title of state houses to community housing organisations at no cost, there is often the caveat that the property is used as leverage to finance the building of additional social housing, Carol Croce says.

“This not only builds up the community housing sector and the individual community housing provider’s portfolio of properties available to families in need, it also increases the net amount of social housing available in the community.

“In New Zealand, the current government policy means that the community housing provider is hit with the double cost of having to redevelop the existing state house into a warm, dry, modern home with the right number of bedrooms, as well as pay back the purchase cost.”

Carol Croce is in New Zealand speaking at Community Housing Aotearoa’s Nelson conference this week, the focus of which is Making community housing happen: The Impact Conference.

She says the New Zealand government’s approach seems to be focused on transferring the existing provision of social housing to community housing providers, rather than growing the total amount of affordable housing available.

“And it is not a resourcing issue, because Housing New Zealand’s 2013 annual report showed dividend and tax paid to the government of $177 million. Yet the allocation to the Social Housing Fund in the government’s recent budget was just $30 million. That leaves $140 million that the government could spend in growing community housing that’s going elsewhere.”

Carol Croce says if the New Zealand government won’t fund the growth of community housing to meet the estimated 15,000 extra homes needed by 2020, then the sector will need to look at additional ways to grow.

“Community housing providers in New Zealand may need to look at strategic partnerships with organisations that have something to bring to the table – for example a church which has land to contribute. They could also look at overseas organisations with deeper pockets to fund new homes or other financial vehicles that will provide a source of capital funding, such as housing supply bonds,” she says.

Carol Croce says it seems in New Zealand community housing providers are seen as more of a niche housing provider and are attractive to government because of their ability to provide better housing for people with complex needs.

“There needs to be a shift in thinking by government that recognises the sector has the ability to use existing social housing properties as leverage to increase the amount of low cost housing, while also redeveloping those existing houses into warm, dry, modern homes.”

[ends]

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