Greens unveil 'rent-to-buy' housing scheme
Thursday 24 Jan 2013 9:34 a.m.
The Green Party has unveiled its new housing package, called Home for Life, which includes a progressive home ownership scheme.
It would mean the Crown buying houses, which families gradually pay off before owning their homes outright.
The Greens say it could cost families $100 a week less than a mortgage, and could be paid off within 25 years.
"The easiest way to understand our proposal is to think about it as a rent-to-buy scheme," says housing spokesperson Holly Walker.
"The Government would build affordable, high-quality, energy efficient homes, low and middle-income families would move into them and they would pay a basic rental each week that would cover the cost of the Crown's investment in the house – say about $200 a week.
"In addition to that, anything they paid above that amount would be used to purchase equity in the house – so let's say they paid an extra $100 a week on top of that, that's a total housing cost each of $300, and the $100 would go towards purchasing a share in that house, so the goal would be over the long-term they would be owning the home outright."
Ms Walker says buyers wouldn't need a deposit, which is often a barrier to home ownership.
"That's one of the beauties of the scheme – that can be a huge barrier for many families who find it easy enough to budget each week and to meet their ingoings and outgoings, but because of the cost of rent and the cost of living, are finding it increasingly difficult to put any money away to save for a deposit."
She admits the scheme would require new borrowing, but it would be borrowing in order to create an asset.
"The good thing about it is that rather than borrowing to spend, which is largely what we see with Government debt at the moment, there's an asset created that offsets that debt.
"The effect on the net debt of the Government's books overall would actually be neutral."
Last year Labour unveiled its KiwiBuild scheme, which aims to build 100,000 new homes in 10 years to sell for around $300,000 each. Ms Walker says while it's good Labour has its "thinking cap" on, the need for a deposit would prevent many of those in need.
"It's a great way to address the supply side and build lots of new houses, but for many families it still requires them to save a deposit and it still requires them to be able to get a mortgage from a traditional bank to pay for the home."
The Green Party would be open to negotiation with Labour, suggesting a percentage of homes built under the scheme could be set aside for progressive ownership.
"We've got a rich tradition in New Zealand of the Government taking a lead in the housing space, and I think what we're seeing at the moment is the consequences of what happens when they don't," says Ms Walker.
The Greens also have plans to improve the lot of renters too, with a proposed 'warrant of fitness' scheme for rental properties and limits to rent hikes.
"There's lots of goods and services that we purchase every day where we absolutely expect minimum safety and health standards to be met," says Ms Walker, "and how housing, given that it has such a critical impact on people's daily lives, really it's long overdue that we have some minimum standards for being able to rent a house."
They also want to limit rent increases to once a year and have hikes restricted to a formula set out in the tenancy agreement.
"Limiting rent increases to once a year and requiring that the formula for calculating them be included in tenancy agreements will protect tenants from arbitrary and unexpected rent hikes," says party co-leader Metiria Turei.
The Greens also want tenants to have the right to renew fixed-term leases to "give families greater security in their rental homes and allow them to put down roots in their communities", says Ms Turei.
"Security of tenure will allow tenants to request landlords fix problems such as maintenance issues without fear that it will lead to their tenancy not being renewed."