Sunday, May 23, 2010

Housing Affordability: Manukau City

Statistics New Zealand provides these 2006 census housing data for Manukau City:

- the city had 95,118 occupied dwellings
- 51.8% of households own the dwelling they live in
- the average household size in Manukau City is 3.4 people, compared with an average of 2.7 people for all of New Zealand.

Applying the ARC’s analysis that 21.7% of households in the Auckland Region pay more than 40% of household income on housing (Introduction, above), then Manukau City is home to more than 20,000 households living in housing that is not affordable.

Figure 7.2 (see download version of this research report) is drawn from Statistics New Zealand Housing Affordability tables for the whole of New Zealand. This demonstrates a significant increase in the numbers of households in private rented accommodation deemed unaffordable. Contrast this with the same data trends for homes privately owned with a mortgage shown in Figure 7.3 (see download version).

Assuming this national picture applies in Manukau City, then it is reasonable to assert that the sharpest increase in affordability difficulties are being experienced by households that are renting privately.

Further information relating to how the housing market is responding in Auckland Region is contained in Into Troubled Waters a – “State Of The Nation Report” from The Salvation Army Social Policy & Parliamentary Unit which was prepared last year. This draws attention to changes in the numbers of houses being built, at a time when Auckland’s population growth is showing no signs of slowing. The report notes in particular:
The housing market appeared to have peaked in the third quarter of 2007 and it has been more or less down hill since then. Levels of building consents have fallen to a 30 year low of around 15,000 new dwelling consents for the year ended September 2008. The downturn is especially serious in Auckland where it appears that a housing shortage of 2500 has arisen over the past year because construction rates have not kept pace with population growth. Of this shortage around 1200 are in Manukau City alone….(Salvation Army, 2009, Pg 35)

The data analysis that led to these conclusions is available in another Salvation Army report Housing Update 2008: A Report On New Zealand Housing Markets, also by The Salvation Army Social Policy & Parliamentary Unit. This reports on undersupply and oversupply of housing based on Stats NZ Growth stats. In particular, it provides the following information in relation to Auckland’s major municipal areas.
Estimates for new dwellings required are based on the current growth path each city or district appears to be on (ie. Statistics NZ low-medium-high scenario) and the 2006 average household size for each city or district…. The Auckland region’s cities (North Shore, Waitakere Auckland and Manukau) will experience a growing housing shortage if current building rates (for the year ended September 2008) are maintained. This deficit is around 2,500 houses per year with North Shore City having a deficit of 500 houses annually, Waitakere City a deficit of 400 houses, Auckland City (400 houses) and Manukau City a deficit of over 1,200 houses annually on present trends. (Salvation Army, 2008, Pg 18)

Assuming 20% as a conservative estimate of the proportion of this housing shortage that would be needed to meet the needs of those on low incomes (based on the ARC’s implicit policy that no more than 40% of household income should need to be spent on housing, and its finding that 21.7% of households in Auckland are now spending in excess of that amount), then the annual shortage of new affordable housing in Manukau City for its growing population is about 250 homes.

NB: It should be noted that this figure relates to future housing needs and does not describe those families who are now living in conditions deemed unaffordable.

The question then becomes - how might this shortage be met?

Manukau City Council’s 2009-2019 Long Term Council Community Plan (LTCCP) sets out the Council’s own plans in regard to Council Housing.

The “Big Picture” section of the LTCCP sets out Council’s population projections as follows: 2006 (329,000), 2016 (417,000), 2026 (490,000) etc.

The “Housing for the Elderly” section of the LTCCP lists the locations and numbers of around 500 Council Homes that are provided in Manukau City by the Council. The Ten Year plan explicitly provides for the maintenance and renewals of these assets. However there is no policy to increase their numbers. (Manukau LTCCP 2009, Community Services, Pg 66)

It is difficult to discern the precise intentions of Government in regard to the provision of affordable housing in Manukau City through its agency Housing Corporation of New Zealand, however its intentions regarding the future of state housing numbers in the neighbouring area of Tamaki are clearly set out on the Frequently Asked Questions section of its website:
Will the numbers of Housing New Zealand homes be reduced?
Housing New Zealand Corporation currently owns 56 per cent of the state housing in Tamaki. While more houses will be built over time, the existing number of state houses is not going to change. This is a commitment by Housing New Zealand, through the Programme, to the Tamaki community. A greater mix of housing will be encouraged, including private ownership. (HNZC, 2009) (Emphasis added)

This gives effect to the general thrust of Government’s Housing policy which was established under the previous Labour Party led Government in 2005 (HNZC, 2005). The foreword of this strategy, entitled: “Building the Future: The New Housing Strategy”, includes these statements by the then Minister of Housing – Steven Maharey:
…while the state retains its long-standing role as the largest landlord in the country, most New Zealanders house themselves without government assistance. The Government remains committed to ensuring those on low or modest incomes or with special housing needs receive the help they require to find and stay in affordable, good quality housing…

…Housing is more than building houses: it is as much about building community as it is about people’s homes…

…The shift towards increased community-based housing, more affordable homeownership opportunities, and a mix of new housing reflecting community diversity is re-mapping our landscape…

…State houses have been an important feature of New Zealand housing since the late 1930s and will remain so. Increasingly, they will be alongside housing provided by other community partners. Housing choices and designs of the future will inevitably grow from what has gone before… (HNZC, 2005, Pg 2)

The language used here is the language of change and of choice. In respect of state housing in the absence of clear and strong commitment to continuity and expansion of provision, the language expressed in this foreword is equivocal at best.

If neither Housing New Zealand nor Manukau City Council are committed to matching the increasing affordable housing needs of a growing population, who will?

Then there is the matter of stress. As noted previously in this report, crowding, or over-crowding in a home can lead to social problems such as poor health (due to people living in close proximity), to learning difficulties (children being unable to find space to do homework), and conflict (one bathroom being shared among a number of adults for example). ....

The crowding problem among European households has halved from 5% of European households in 1987 to under 2.5% in 2004, while for Maori households it has only dropped marginally from 16% of all Maori households being crowded in the late 1980’s and early 1990’s, to just over 10% in 2004. It is likely the same crowding issue applies to a similar proportion of households occupied by Pacific families also.

Research summarised in other parts of the report suggests that while some crowding may be attributable to the extended family culture of Pacific Peoples, it also stems from economic necessity – the more earners in one household the more affordable it becomes. Uncrowding today’s crowded Pacific family occupied houses may only result in an increase in the numbers of families living unaffordably.

1 comment:

Joel Cayford said...

I just note here, for the record, a media release that came from the Green Party after the budget on Friday:

"The gutting of state house funding by John Key’s Government will hurt New Zealand’s most vulnerable people, said the Green Party today....

The budget for improving and buying state houses has been cut by over 80% from $120 million to $18 million. There is no money for new state houses, and the funding to make existing houses liveable has been slashed.

"Vulnerable New Zealanders are already struggling to get access to decent housing. There are over 10,000 people on Housing New Zealand waiting lists, and John Key, who grew up in a state house, has decided that they do not matter," said Green Party Co-Leader Metiria Turei today.

"Access to decent housing is a basic human right, and it has a huge impact on people’s health and their educational and employment prospects. These budget cuts will make an already desperate situation worse for many struggling New Zealanders. It is not fair and it is not right.

"They have also gotten rid of all the funding for housing for Auckland pensioners.

"This attack on the most vulnerable people in our society will make inequality worse in our already highly unequal society. All the research shows that inequality makes things worse for everyone, not just those on the bottom.

"One way to address inequality is to ensure that everyone has access to decent housing. This is why investing in state and community housing are key parts of our Mind The Gap package to address inequality that we announced on Monday.

"Under a Green Government we would have had 6000 new state house over the next three years which would have created 28,000 jobs, and meant healthy warm homes for people who need support.

"Instead of addressing inequality, John Key’s Government seems committed to making it worse under the false and unproven rationale that this will somehow benefit our society," said Mrs Turei.

Sunday, May 23, 2010

Housing Affordability: Manukau City

Statistics New Zealand provides these 2006 census housing data for Manukau City:

- the city had 95,118 occupied dwellings
- 51.8% of households own the dwelling they live in
- the average household size in Manukau City is 3.4 people, compared with an average of 2.7 people for all of New Zealand.

Applying the ARC’s analysis that 21.7% of households in the Auckland Region pay more than 40% of household income on housing (Introduction, above), then Manukau City is home to more than 20,000 households living in housing that is not affordable.

Figure 7.2 (see download version of this research report) is drawn from Statistics New Zealand Housing Affordability tables for the whole of New Zealand. This demonstrates a significant increase in the numbers of households in private rented accommodation deemed unaffordable. Contrast this with the same data trends for homes privately owned with a mortgage shown in Figure 7.3 (see download version).

Assuming this national picture applies in Manukau City, then it is reasonable to assert that the sharpest increase in affordability difficulties are being experienced by households that are renting privately.

Further information relating to how the housing market is responding in Auckland Region is contained in Into Troubled Waters a – “State Of The Nation Report” from The Salvation Army Social Policy & Parliamentary Unit which was prepared last year. This draws attention to changes in the numbers of houses being built, at a time when Auckland’s population growth is showing no signs of slowing. The report notes in particular:
The housing market appeared to have peaked in the third quarter of 2007 and it has been more or less down hill since then. Levels of building consents have fallen to a 30 year low of around 15,000 new dwelling consents for the year ended September 2008. The downturn is especially serious in Auckland where it appears that a housing shortage of 2500 has arisen over the past year because construction rates have not kept pace with population growth. Of this shortage around 1200 are in Manukau City alone….(Salvation Army, 2009, Pg 35)

The data analysis that led to these conclusions is available in another Salvation Army report Housing Update 2008: A Report On New Zealand Housing Markets, also by The Salvation Army Social Policy & Parliamentary Unit. This reports on undersupply and oversupply of housing based on Stats NZ Growth stats. In particular, it provides the following information in relation to Auckland’s major municipal areas.
Estimates for new dwellings required are based on the current growth path each city or district appears to be on (ie. Statistics NZ low-medium-high scenario) and the 2006 average household size for each city or district…. The Auckland region’s cities (North Shore, Waitakere Auckland and Manukau) will experience a growing housing shortage if current building rates (for the year ended September 2008) are maintained. This deficit is around 2,500 houses per year with North Shore City having a deficit of 500 houses annually, Waitakere City a deficit of 400 houses, Auckland City (400 houses) and Manukau City a deficit of over 1,200 houses annually on present trends. (Salvation Army, 2008, Pg 18)

Assuming 20% as a conservative estimate of the proportion of this housing shortage that would be needed to meet the needs of those on low incomes (based on the ARC’s implicit policy that no more than 40% of household income should need to be spent on housing, and its finding that 21.7% of households in Auckland are now spending in excess of that amount), then the annual shortage of new affordable housing in Manukau City for its growing population is about 250 homes.

NB: It should be noted that this figure relates to future housing needs and does not describe those families who are now living in conditions deemed unaffordable.

The question then becomes - how might this shortage be met?

Manukau City Council’s 2009-2019 Long Term Council Community Plan (LTCCP) sets out the Council’s own plans in regard to Council Housing.

The “Big Picture” section of the LTCCP sets out Council’s population projections as follows: 2006 (329,000), 2016 (417,000), 2026 (490,000) etc.

The “Housing for the Elderly” section of the LTCCP lists the locations and numbers of around 500 Council Homes that are provided in Manukau City by the Council. The Ten Year plan explicitly provides for the maintenance and renewals of these assets. However there is no policy to increase their numbers. (Manukau LTCCP 2009, Community Services, Pg 66)

It is difficult to discern the precise intentions of Government in regard to the provision of affordable housing in Manukau City through its agency Housing Corporation of New Zealand, however its intentions regarding the future of state housing numbers in the neighbouring area of Tamaki are clearly set out on the Frequently Asked Questions section of its website:
Will the numbers of Housing New Zealand homes be reduced?
Housing New Zealand Corporation currently owns 56 per cent of the state housing in Tamaki. While more houses will be built over time, the existing number of state houses is not going to change. This is a commitment by Housing New Zealand, through the Programme, to the Tamaki community. A greater mix of housing will be encouraged, including private ownership. (HNZC, 2009) (Emphasis added)

This gives effect to the general thrust of Government’s Housing policy which was established under the previous Labour Party led Government in 2005 (HNZC, 2005). The foreword of this strategy, entitled: “Building the Future: The New Housing Strategy”, includes these statements by the then Minister of Housing – Steven Maharey:
…while the state retains its long-standing role as the largest landlord in the country, most New Zealanders house themselves without government assistance. The Government remains committed to ensuring those on low or modest incomes or with special housing needs receive the help they require to find and stay in affordable, good quality housing…

…Housing is more than building houses: it is as much about building community as it is about people’s homes…

…The shift towards increased community-based housing, more affordable homeownership opportunities, and a mix of new housing reflecting community diversity is re-mapping our landscape…

…State houses have been an important feature of New Zealand housing since the late 1930s and will remain so. Increasingly, they will be alongside housing provided by other community partners. Housing choices and designs of the future will inevitably grow from what has gone before… (HNZC, 2005, Pg 2)

The language used here is the language of change and of choice. In respect of state housing in the absence of clear and strong commitment to continuity and expansion of provision, the language expressed in this foreword is equivocal at best.

If neither Housing New Zealand nor Manukau City Council are committed to matching the increasing affordable housing needs of a growing population, who will?

Then there is the matter of stress. As noted previously in this report, crowding, or over-crowding in a home can lead to social problems such as poor health (due to people living in close proximity), to learning difficulties (children being unable to find space to do homework), and conflict (one bathroom being shared among a number of adults for example). ....

The crowding problem among European households has halved from 5% of European households in 1987 to under 2.5% in 2004, while for Maori households it has only dropped marginally from 16% of all Maori households being crowded in the late 1980’s and early 1990’s, to just over 10% in 2004. It is likely the same crowding issue applies to a similar proportion of households occupied by Pacific families also.

Research summarised in other parts of the report suggests that while some crowding may be attributable to the extended family culture of Pacific Peoples, it also stems from economic necessity – the more earners in one household the more affordable it becomes. Uncrowding today’s crowded Pacific family occupied houses may only result in an increase in the numbers of families living unaffordably.

1 comment:

Joel Cayford said...

I just note here, for the record, a media release that came from the Green Party after the budget on Friday:

"The gutting of state house funding by John Key’s Government will hurt New Zealand’s most vulnerable people, said the Green Party today....

The budget for improving and buying state houses has been cut by over 80% from $120 million to $18 million. There is no money for new state houses, and the funding to make existing houses liveable has been slashed.

"Vulnerable New Zealanders are already struggling to get access to decent housing. There are over 10,000 people on Housing New Zealand waiting lists, and John Key, who grew up in a state house, has decided that they do not matter," said Green Party Co-Leader Metiria Turei today.

"Access to decent housing is a basic human right, and it has a huge impact on people’s health and their educational and employment prospects. These budget cuts will make an already desperate situation worse for many struggling New Zealanders. It is not fair and it is not right.

"They have also gotten rid of all the funding for housing for Auckland pensioners.

"This attack on the most vulnerable people in our society will make inequality worse in our already highly unequal society. All the research shows that inequality makes things worse for everyone, not just those on the bottom.

"One way to address inequality is to ensure that everyone has access to decent housing. This is why investing in state and community housing are key parts of our Mind The Gap package to address inequality that we announced on Monday.

"Under a Green Government we would have had 6000 new state house over the next three years which would have created 28,000 jobs, and meant healthy warm homes for people who need support.

"Instead of addressing inequality, John Key’s Government seems committed to making it worse under the false and unproven rationale that this will somehow benefit our society," said Mrs Turei.