New social housing in Palmerston North Photo: RNZ / Samuel Rillstone
Forty thousand New Zealand families without decent housing; crowding into single rooms; cold, damp, mouldy accommodation…
Sounds familiar - but this was during the Great Depression in 1935. And now?
Habitat for Humanity believes 300,000 families are living in unacceptable housing conditions as a result of unaffordable homes, overcrowding and poor housing stock.
Covid lockdowns aside, housing issues are dominating the news cycle. Today The Detail looks at how it came to this.
Journalist Rebecca Macfie has written a feature story for North & South magazine this week on the path to our housing crisis and talks to Alexia Russell about the ideological swing and other contributing factors that spiked the great Kiwi dream of home ownership.
Macfie says housing is an incredibly complex eco-system that touches all aspects of society, because it’s a primal human need – people need shelter. But she fears the country is already beyond the point of no return.
“Is it so stuck now … is it so cemented, is it so embedded into the very financial and economic structure of the country that we can’t get our way out of it? That’s what I’m scared about. I’m scared that it’s so baked in that you can’t undo it. And that’s a terrifying thought.
“Every day you get up and there are stories about housing … but phenomena like this, they don’t arise rapidly. There are deep roots always, with social and economic change. So really it was a case of going back and looking for what that might be.”
On today’s podcast Macfie pinpoints the year – and the budget – that was the impetuous for this change of direction. But the story’s starting point was in 1937 when the Michael Joseph Savage Labour government started a state house building programme. By 1949, in the post-war years, housing policy shifted with a National government towards mass home ownership.
Michael Joseph Savage Photo: supplied
“It’s often referred to as the post-war consensus. What remains a kind of permanent feature through those decades is a very hands-on, very highly involved, state.”
The building of state housing continues to go on to 1990. By then there are 70,000 state houses, which is more than Kāinga Ora owns now. Ordinary working people were able to take out a cheap State Advances loan to buy their own home, and you could capitalise your Family Benefit (now long gone) to build an extension.
Then, says Macfie, the break point.
In the Mother of All Budgets, Finance Minister Ruth Richardson made dramatic moves to get the country out of what she said was technical bankruptcy, and put it on a market footing. Socialism, protectionism and state control were out. Benefits were cut and the Employment Contracts Act introduced, which relied on the market to set workers’ wages. State housing began to be sold off, and rents were raised to market values instead of being set at a quarter of tenants’ incomes. To offset that the Accommodation Supplement was introduced – a handout that now costs more than $2 billion a year, our second highest benefit cost after superannuation.
Prime Minister Jim Bolger and Finance Minister Ruth Richardson make their way to the House of Representatives for the presentation of the 1991 budget Photo: Te Ara / Public Domain
That change saw private landlords step in, in a property frenzy which was helped by seminars telling home owners how to leverage their asset to buy more, using tax breaks to make a profit.
“There had been warnings that this would not work,” says Macfie. The National Housing Commission and a group within the Prime Minister’s office said it would force up rents and do nothing to increase the housing stock.
“Didn’t matter. It’s a time of peak ideology in some ways,” she says. The independent Housing Commission was abolished in 1988.
Social service agencies saw the impact immediately.
Macfie says we’ve gone from seeing housing as a social good and a human right, to an item of financial speculation.
“We’ve become so used to seeing housing referred to in those terms; reported on it those terms; analysed daily, weekly, by bank economists in those terms that we’ve got used to it. And we’ve forgotten to think of housing as a primal need and a human right.”
PIJF Photo: .
