The Government has announced a proposed shake-up of New Zealand's social housing system, including increasing the proportion of income tenants have to pay.
The "multi-year reform" was outlined in a pre-Budget announcement this morning, made by Minister for Housing Chris Bishop and Minister for Social Development & Employment Louise Upston. They outlined three "key shifts" as part of the reform.
Among the changes was a plan to increase the proportion of income social housing tenants those in emergency and transitional housing have to pay.
Currently, those in social housing must pay an income-related rent contribution of 25%.
This will be increased to 30% under the changes announced today.
The increases will be phased in for social housing tenants over 12 months, at each tenant’s annual review or at their next notification of change of circumstances.
Upston said the change will increase rent for around 84,000 households by an average of about $31 a week.
The change was expected to find $387.5 million in operating savings over the period, which will be reinvested in higher maximum weekly Accommodation Supplement rates for those in the private market – expected to increase by between $10 and $30 a week, costing $374.3 million over the forecast period.
Upston said that even with increased rents, "most social housing tenants will still generally pay less than comparable households in the private market".
Overall, around 111,000 families not in social housing would be $14.91 better off a week. A further 45,000 would be $10.82 worse off on average a week, while around 84,000 in social housing would be $31.02 worse off.
The Government said the change was aimed at narrowing the gap between the cost of private and social housing. "So that support settings are fairer and better encourage work, increased hours of work, and movement into private rentals where appropriate."
“We know that 30% of tenants have been in social housing for over 10 years. Households are now forecast to remain there for an average of 16.7 more years," Upston said.
"Too often, support is not regularly reassessed, and tenants are not incentivised to gain more independence."
While this is happening, the Government would reduce the maximum rate of temporary additional support, generating $195.6 million in operating savings over the forecast period.
Upston said this would "better reflect its original purpose as temporary hardship support".
A redesign of the social housing needs assessment that deprioritised affordability was also part of the reforms.
The redesigned assessment will be more focused on "severe and persistent barriers" people face when trying to access private housing. These barriers included supply issues, selection bias, mental health and/or addiction issues.
"Affordability will remain relevant for social housing assessment. But if it’s the main challenge for people, then they are best supported through a subsidy (like the Accommodation Supplement) rather than a social house," the Ministers said.
Another part of the shakeup was changes to "support more movement through and out of social housing".
These changes included defined tenancy durations (with exemptions where need is ongoing), a responsibilities framework, better support to help households overcome barriers to private housing, and more regular engagement "to assess changing needs and eligibility, including tenancy reviews".
Bishop said the changes were intended to make social housing better-targeted and more focused on encouraging independence.
“Some people will always require housing support. Social housing should be there for those who genuinely need it, for as long as they need it. But it should also be a pathway to independence where that’s possible, not a place where people get stuck,” he said.
Bishop called the current system "unfair".
"Similar households can get very different support depending on whether they are in social housing or a private rental.
"On average, social housing tenants on a main benefit have $105 more a week left after housing costs than comparable private renters receiving the Accommodation Supplement."
He also said the current system was expensive, and said the stock was not being used efficiently.
"Over the past decade, total housing support spending has more than doubled to $5.5 billion, while the social housing waitlist has grown approximately six-fold.
“Social housing is a high-cost intervention and should be targeted to those who need it most. Modelling shows that if 10% tenants exit after five years, around 6000 more vacancies could open up over a decade.”
Officials will hold "targeted discussions" with iwi, community housing providers, Kāinga Ora, and social service providers in the second half of this year.
Proposed changes 'cruel' - Labour
Labour's spokesperson for housing, infrastructure and public investment Kieran McAnulty called the changes "cruel", describing them as "nothing more than a plan to remove support from struggling New Zealanders to save money".
“Christopher Luxon and Chris Bishop are trying to dress up rent hikes and benefit cuts as ‘independence’. The Government is trying to balance the books on the backs of people already doing it tough.
"You do not help families into independence by making them poorer.
“People aren’t in social housing because they’ve chosen an easy ride. They’re there because rents are unaffordable, wages haven’t kept up, and this Government has made the housing crisis worse."
He accused the National Party of seeing social housing tenants as "a cost to cut, not people to support".
"For many people, this will mean more stress, more instability, and more fear about whether they’ll still have a home in a few years."
He said the focus should be on building more affordable homes.
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