Labour Party pamphlet from 1919 shows striking parallels to today's housing crisis

A Labour Party pamphlet from 1919 shows striking parallels to today's housing crisis, and a political historian says rents back then were as contentious as they are now. 

The pamphlet was handed out at a time when Labour had never yet held power in New Zealand. It wasn't until 1935 when the first Labour Government was formed under Prime Minister Michael Joseph Savage. 

At a time when house prices are skyrocketing beyond the reach of most New Zealanders, and rent prices are also increasingly rapidly, the pamphlet from 1919 demonstrates how complex housing is for governments to tackle. 

The 1919 leaflet reads: "Wellington is crowded. Frequently several families occupy the same small house. In some cases, families have to live in one room. Many of the houses are insanitary.

"The National Government - Liberals and Tories - has nothing to remedy this disgraceful state of affairs. It will do nothing, because it represents the landlords and house owners."

The pamphlet then goes on to discuss rising rent prices - reminiscent of today. According to Stats NZ's latest rental price data, rental prices were up 3.1 percent in December 2020 compared to the same time in 2019. 

Stats NZ said the rise was likely caused by strong demand as well as new rental standards for landlords. But in 1919, rising rent prices were "forced up enormously" during war time, according to the Labour pamphlet. 

Victoria University of Wellington History Professor Jim McAloon says rents were as contentious in 1919 as they are now. But more than 100 years ago, it was a very different housing landscape.  

"It does seem clear that many working-class families experienced significant hardship during the First World War. In terms of housing, the question of quality was at least as important as that of affordability: the 1918 influenza highlighted a significant dimension of substandard housing," he told Newshub. 

1919 Labour Party pamphlet.
1919 Labour Party pamphlet. Photo credit: Reddit / dingoonline

The rent figures in the Labour pamphlet are in the pounds currency, because the New Zealand dollar wasn't introduced until July 1967. 

Prof McAloon says the rent figures provided in the pamphlet seem to be close to the figure for six-roomed houses in 1919 - four or five rooms would have cost less.

Referring to official sources in the NZ Official Yearbook, Prof McAloon said there were restrictions on how much rents could be increased at the time, and therefore new tenancies involved higher rents than existing ones. 

"Interestingly, too, the Yearbook for 1920 notes that insecurity and shortage of tenancies encouraged people to buy houses who would otherwise have been happy to remain as tenants."

Prof McAloon says the most common wage-rate for men in 1919 was between £3 and £4 per week - 47 percent of men were in that band, and 28 percent earned less. 

"No doubt Labour's concern in this advertisement was with those lower-paid workers."

What was going on in housing?

Prof McAloon pointed to Gael Ferguson's 1994 study, Building the New Zealand Dream, to provide insight into how previous governments in New Zealand have tried to fix housing.  

"She shows that rents were as contentious then as they are now," says Prof McAloon.  

"Rent controls were introduced in 1916 as part of wartime economy but landlords got less restrictions on houses built since 1914 and were able to charge annual rent of 8 percent of the capital value (which seems very high indeed). Moreover, there were effectively no standards for rental housing."

At the end of 1919 the conservative William Massey government brought down a Housing Act, but state construction of housing remained well behind what was needed to solve the problem, Prof McAloon says. 

In 1923, Massey's government introduced state housing loans through State Advances of up to 95 percent, and this was intended to facilitate construction and purchase on the private market.

William Massey was leader of the Reform Party and Prime Minister of New Zealand from May 1912 to May 1925.
William Massey was leader of the Reform Party and Prime Minister of New Zealand from May 1912 to May 1925. Photo credit: Getty

"Some people couldn't even find the 5 percent but Massey's concern was in part to encourage those of modest circumstances to have a stake in the existing social order and thus blunt the appeal of radicalism," says Prof McAloon. 

Ferguson says that the State Advances were very slow in approving loans but on the other hand the 95 percent did make a difference for a lot of people. 

Otago University Emeritus Professor Erik Olssen suggests that in the mid-1920s about 60 percent of families lived in their own mortgaged houses. Yet the availability of loans declined as the economy went into recession in the later 1920s. As the Great Depression worsened, the building sector suffered and housing construction slowed significantly.

"Where in 1919 that Labour advertisement was about controlling rents, in 1935 the party's view had shifted to a significant state housing construction programme, and while it also brought State Advances back, construction was more important through to 1949," says Prof McAloon. 

Victoria University of Wellington History Professor Jim McAloon.
Victoria University of Wellington History Professor Jim McAloon. Photo credit: Victoria University of Wellington

It comes as the current Labour Government led by Jacinda Ardern focuses on public housing, with 8000 additional public and transitional housing places announced in Budget 2020 at a cost of $5 billion. 

The aim is to have more than 18,000 extra public and transitional housing places by 2024. 

Reflecting on how housing became a political issue in the first decades of the 20th century, Prof McAloon says there was always a popular ideology that New Zealand would not repeat the poverty that characterised many urban and rural environments in the UK.

"There was an expectation that 'Old World Evils' would be avoided. You get this theme cropping up in 1890, in 1919, and in 1935," he said. 

"In 1919, the flu was part of the context, as I said, but it was also about making wartime sacrifice worthwhile (as it was also in 1945).  There's always a tension between this idea of Old World Evils, and an equally strong ideology among some that the state's involvement in housing (and other areas of social policy) should be limited."