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The Market Rents Housing Experiment

‘By April 1998 71% of applicants for food parcels at the Auckland City Mission cited market rents as the reason for applying.’
‘A main contributer to the affordability problem is the reliance on the market as the most efficient means to allocate housing. The move to market rents has had a serious impact on HNZ tenants as they pay significantly more for their accommodation than under income-related rents.’
Taking Stock! A report on the problems and possibilities for housing policy in New Zealand. New Zealand Council of Social Services, October 1999

"Demand for Salvation Army food parcels fell when HNZ rents were frozen in 1996. But when the freeze was lifted in July 1997 demand for food parcels rocketed. The foodbank gave away 1,663 parcels in the first six months to 1997. However the first six months of 1998 brough a 53% leap to 2,540 handouts."
Manakau Courier 1 September 1998

On the basis of market income, 73% of state housing tenants are poor, but only 27% of private renters. While net transfers (including the Accommodation Supplement) are more effective for state tenants, their final poverty incidence is still double that of private renters (Below the Line: An Analysis of Income Poverty in New Zealand. R Stephens, P.Frater and C Waldegrave)

‘By April 1998 71% of applicants for food parcels at the Auckland City Mission cited market rents as the reason for applying.’
‘A main contributer to the affordability problem is the reliance on the market as the most efficient means to allocate housing. The move to market rents has had a serious impact on HNZ tenants as they pay significantly more for their accommodation than under income-related rents.’
Taking Stock! A report on the problems and possibilities for housing policy in New Zealand. New Zealand Council of Social Services, October 1999

“According to the Salvation Army, rent costs for Housing New Zealand tenants have risen 106% since 1992. Inflation has only gone up 12% and private rentals by 23% ove the same period. Major Campbell Roberts described these facts as condemning National’s ‘big housing experiment which has been so disastrous.’
Salvation Army in The Christchurch Press, 29 August 1999

“A quarter of poor households pay 50% or more of their income on rent; 40% of households surveyed were overcrowded; and 49% had been unable to provide a meal for their families at least once in the three months befor the survey was published because they could not afford to.”
Anglican Social Services Family Centre, September 1999

“The market rents policy has seen state house rents double in some areas of Porirua in the five years between 1991 and 1996.”
Kapi-Mana News, 6 October 1998

“Most (South Auckland) families are paying between 45 and 60% of their household income in rent. If you are getting $350 a week, that leaves you $100, $150 to pay for everything else. The way that people have coped is by sharing resources, by crowding in.” Research by A Johnson, Manukau City Council cites the introduction of income related rents in 1991 as the catalyst for overcrowding in South Auckland.
The Listener, 2 October 1999

“We see the proposed changes as a very positive and significant step towards addressing the enormous housing problems for low income earners. It definitely signals to us the Government’s intention to put social objectives before profit.”
“Our research shows that housing is such an important part of people’s lives that when it is unaffordable, their quality of life suffers. Social Service providers then have to deal with the detrimental effects of high housing costs on families and individuals.”
New Zealand Council of Social Services spokesman Major Campbell Roberts, NZPA, 23 May 2000

Rents for the poorest families in the country have risen at almost 10 times the rate of inflation since the Government moved to market-related charges.
Statistics New Zealand figures show the average rental for Housing New Zealand and council homes has rocketed 106 per cent since 1992. During the same period, rentals from private landlords rose 23 per cent, and the consumer price index rose just 12 per cent.
New Zealand Herald 15 May 1999

“New Zealand Council of Women has consistently lobbied for the reform of a market rental regime which allowed the cost of state rentals to rise to a level which could claim 50% of a tenant’s income.”
“We believe there is a correlation between high housing costs and the rising incidence of poverty in this country and therefore we see this announcement as having a significant impact on reducing the hardship experienced by low income people.”
New Zealand Council of Women president Barbara Glenie, NZPA, 23 May 2000

“New Zealand's decade-long epidemic of the deadly meningococcal disease is being driven by household crowding, says a major study. The three-year investigation is the first of its kind in this country to look at the risk factors for meningococcal disease.”
Ministry of Health, ERMA research: New Zealand Herald, 11 August 2000

“Monte Cecilia staff and volunteers, who provided housing advice as well as emergency accommodation, were greatly relieved the Government was committed to addressing the injustices facing those in housing need, Sister Mary Foy said.
"Before November we had been in a downward spiral," she said.
"We have witnessed the devastating effects market rents have had on low-income households in the past, as they have had to pay their rent and not feed their families.
"We want to thank the Government because at long last something is happening to benefit the homeless."
Sister Mary Foy, Congregational Leader Auckland Sisters of Mercy & Monte Cecilia Emergency Shelter on hearing news that income-related rents would replace market rents on state houses
New Zealand Herald, 10 April 2000

"South Auckland residents are paying market rents to live in rat-infested, unhygienic and overcrowded state houses. A report for the National Health Committee finds that many Otara residents, particularly those in the area's 2200 state houses, are plagued by rats and cockroaches.
It also says the residents are living in cold, damp homes that are poorly serviced.
The Action on Housing and Health in Otara report says poor housing is a significant factor in the region's health problems.
A child health report released last month partly blamed poor living conditions for the deteriorating health of South Auckland children.
The Housing and Health report says many old Housing New Zealand homes are damp and mouldy, with bare floors, no curtains and little ventilation.
New Zealand Herald 1 September 1999

"A new report entitled Towards Wellbeing in Waitakere documents a feeling among West Auckland community groups that people on fixed incomes are the lowest socioeconomic groups and are worse off. "
The Waitakere City Council Study exposes concerns about housing, market rents and issues forcing children to change schools often as families move.
"The high cost of housing in the Auckland region comes on top of other pressures from being on a stretched income and many Waitakere families are not coping."
"Many people feel that until market-rent policies are dropped, access to affordable housing really won't improve."


"Market rents are a key trigger to all these other problems that we're dealing with.”
State Housing Action Coalition spokesman Peter Hughes
New Zealand Herald 1 September 2000

It was an obvious anomaly that the most disadvantaged in our society were expected to pay market rentals. In many cases the Council was aware of people paying 30-50% of their income in rent. This left them with much less money to feed and support their families… We believe that this policy has had a very detrimental effect on the lives of the state house tenants and their families.
Auckland District Council of Social Services – submission on the Housing Amendment (Income Related Rents) Bill

In the current climate where market rentals and profit dictate conditions under which our client families live,…we have noticed a significant increase in poverty among these families, and consistent hardship, not only in accessing suitable accommodation, but also in their capacity to provide for their basic needs.
An emergency housing service in Auckland – De Paul House – submission on the Housing Amendment (Income Related Rents) Bill

"Our Emergency House is being overwhelmed by ex-Housing New Zealand tenants that have moved out of their tenancies because they could not sustain paying the high market rents. Many families are faced with rental arrears and homelessness…. Families paying ‘market’ rents are suffering grievously in other areas of their lives and often cannot afford to feed and clothe themselves."
The Monte Cecilia House Trust, an emergency housing agency based in Auckland – submission on the Housing Amendment (Income Related Rents) Bill

"It is well documented that inadequate accommodation and overcrowding have serious consequences for the well being of our communities. This was recognised in the Roper Report on Violence, which saw the provision of good affordable housing as a significant factor in the reduction of crime.
Under the market rent regime, it seems that low-income families often have to choose between accepting poor living conditions and making cutbacks in other areas, such as food, doctor’s bills and school fees."
Maori Legal Services – submission on the Housing Amendment (Income Related Rents) Bill

The study found six factors associated with increased risk of meningococcal
disease, the most important being household crowding which increased the
risk of contracting meningococcal disease by more than 10 times, in the
more extreme situations. New Zealand has been experiencing an epidemic of meningococcal disease, mainly serogroup B, since mid-1991. Last year 505 cases of meningococcal disease were reported, including 23 deaths. Rates are also consistently higher in the young, and those of Maori and Pacific Island ethnicity.
In New Zealand, 74.6 percent of occupants living in crowded conditions are
Maori and Pacific Island people, yet together these two groups form 20.1
percent of New Zealand's population.
Ministry of Health and New Zealand Health Research Council Study, August 2000

It may be coincidence but certainly the meningococcal epidemic took off about the same time that market rents came into force.
Professor Diana Lennon, Rheumatic Fever Project coordinator in the Listener 2 October 1999

A report on Pacific Island housing found that Pacific Island households have an average of 4.3 people compared with 2.8 people in other households.
New Zealand Herald 1 September 1999

Nearly one in 100 Pacific Islander infants and one in 250 Maori
contract meningococcal disease compared with one in 2000 European babies.
Auckland Healthcare in the New Zealand Herald 14 June 2000


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