The significant proportion of Kiwis' income that goes towards their housing costs is affecting their wellbeing, a new report states.
The Spotlight on Housing report by Te Tapeke Fair Future panel, convened by Royal Society Te Apārangi, examines how the housing crisis has contributed to inequality, taking aim at the housing shortage, the increasing number of people renting and strains on public housing.
"Differences in housing are a huge part of inequity in Aotearoa New Zealand," panel member Distinguished Professor Philippa Howden-Chapman said. "But the wide-reaching impact on our society also means that if we solve the housing issue, we all benefit, not just those struggling to find decent housing."
The report finds that in 2019, nearly a third of Kiwi households spent 30 percent of their income on housing costs with a quarter of renters spending 40 percent or more.
"This level of expenditure on housing affects wellbeing - cutting into budgets for food and other necessities like electricity and heating. By international comparisons, New Zealand households in the bottom fifth of incomes are severely overburdened by housing costs. Affordability is rated worst by single parents and disabled people."
With home ownership rates dropping - down from 74 percent in the 1990s to 65 percent in 2018 - the gap between the haves and have-nots is widening.
"This trend is contributing to the growth in inequity because home ownership has links to greater wealth, health and welfare over a lifetime. As shown in a recent Stats NZ Housing report, people who don't own their home usually have less security, poorer affordability and worse housing conditions," said Prof Howden-Chapman.
"Contributing to the drop in home ownership is that house prices have been rising faster than incomes. The median New Zealand house price was twice the median household income in 1980 but nine times the median household income by 2019. Despite this, New Zealand is not out of line with other OCED countries in terms of the mortgage burden borne by owner-occupiers"
The drop in home ownership rates has been felt hardest by Pacific peoples, with the proportion living a house occupied by the owner falling 35 percent between 1986 and 2013, compared to 20 percent for Māori and 14 percent for Europeans.
At the same time, the proportion of people renting is increasing, with the report saying a third of Kiwis and half the adult population now rent. It also notes that 32 percent of rental properties are poorly maintained, according to the latest House Condition Survey compared with 14 percent of house occupied by their owners.
Prof Howden-Chapman said there can be a number of challenges linked to renting such as health problems associated with low-quality housing and poor heating, less stability as renters move more often and discrimination experienced by some.
"There are great divisions between those who own their house and those who rent," she said.
For those unable to either purchase a home or rent, public housing should provide some level of security, but the report finds it is being put under pressure by the inadequate supply and high costs of private rentals.
"There were significant sales of state houses between 2008 and 2017. Government policies have changed, but the inevitable lags in construction have meant that despite current high record levels of construction by Kāinga Ora - Homes and Communities, and community housing providers, the waiting list for public housing doubled in the two years between 2017 and 2019 and continues to grow.
"As of 31 March 2021, there were more than 23,000 on the public housing waiting list."
The report also shows the growth in homelessness over the last three decades, with 41,600 estimated to be homeless in the 2018 Census and a further 60,000 defined as being homeless as they were living in uninhabitable housing lacking basic amenities.
A number of actions are called for by the panel:
- adopting a shared vision, such as a housing equity charter based on the Treaty and UN Right to Housing
- improving the security and quality of private rental housing
- setting and upholding minimum standards for housing quality that go further than the Healthy Homes Guarantee Act 2017 to meet World Health Organization minimum standards and ensure accessibility
- providing culturally appropriate, uncrowded housing, including shared and progressive rent-to-buy ownership models
- continuing to work to balance housing supply and demand and offering secure tenure programmes
- consideration and implementation of a number of consistently recommended tax and regulatory changes.
"The evidence in this report underlines that some groups of New Zealanders are struggling to cope with the costs of housing," the report says. "Actions to assist these groups are being taken, but more can be done. This country's ongoing response to the COVID-19 virus is showing that rapid, positive change can be achieved.
"Change is happening already in the housing sector, but so far it has not met the scale of apparent need. By continuing to rethink housing, and working together, it is possible to realise fairer provision of housing in New Zealand."