Speeches

Revitalising Neighbourhoods in Decline

Chris Carter

08.08.2007

Addressed to the Annual Congress of the Canadian Housing and Renewal Association, regarding the New Zealand tradtion of statehousing.

Introduction

The New Zealand Labour-led Government in New Zealand, of which I am a Minister, came to power seven years ago amid a social housing crisis.

The previous conservative government had ended the social responsibility mandate of the national organization responsible for state housing, made it a commercial enterprise, and charged it with making a profit.

From 1991, the same conservation government cut welfare benefits, and ceased subsidizing state house rentals.

It replaced the direct subsidy of state house rentals with a means-tested ‘accommodation supplement’ to assist with both public and private housing costs. But this supplement did not come close to compensating for the losses of state house tenants.

By 1995 state houses lay empty, abandoned by tenants who could no longer afford to pay the rent. Many state house tenants found themselves without enough money for food once they had paid the rent.

It was then that Government proceeded to sell. Thousands of houses. Often at bargain-basement prices. Nearly 3700 in the year to June 1997, the highest number ever in a single year.

By 1999 there was chronic overcrowding as state housing families doubled and sometimes tripled up, with 40% of low-income houses overcrowded. And a Statistics New Zealand report found this overcrowding spreading illness such as tuberculosis, rheumatic fever and meningococcal meningitis.

Speculators made quick profits buying under priced state houses - while many surviving state house tenants paid three quarters of their income in rent.

By the time it was over the Government had sold 13,000 houses with plans to sell another 19,200.

A 'new' approach

This is why our Government came to power in 1999 determined to reassert the tradition of state housing it traced to the first Labour Government of the 1930s.

That first Labour Government did not fear the poor. And it did not view them as a threat to social order. It viewed them as citizens with a right to a decent life – and to decent housing. And it built houses to provide homes for those the market would otherwise leave behind.

And so it was, we set about completely reforming the state housing sector.

We brought the policy, administrative and welfare elements of housing into a single agency we called Housing New Zealand Corporation. We ended the commercial focus on profit. And we reintroduced income-related rents for state house tenants so that no qualifying tenant paid more than 25% of their income in rent.

The impact was immediate. Tenant turnover halved and thousand of lives stabilised.

We ceased all state house sales and began rebuilding. The net increase in state houses thus far is more than 7000.

We have We also currently support [we charge market rents] 1600 ‘community houses’ that provide homes for those with mental illness, intellectual or physical disabilities, women seeking refuge from violent relationships, youth at risk and those needing emergency accommodation.

We initiated a ‘rural housing programme’ that offers Government loans to upgrade substandard housing in targeted rural areas.

We initiated a ‘healthy housing’ project that has built new houses and modified existing ones in order to improve ventilation and insulation and reduce overcrowding. Our study shows, a year after healthy housing intervention, hospital admissions down by 33%. Admissions for bronchiolitis down by 87%. Gastroenteritis by 63%.Pneumonia by 22%. Asthma by 13%.

Our policy has been to build up the stock of social housing and to give housing priority to the most needy: the homeless, the poorest, the physically disabled, the mentally ill, the least able to cope on their own.

We believe this is right. But we also know it comes with the risks associated with concentrating disadvantage.

Revitalising run-down neighbourhoods

We have started to address these risks with ‘community renewal’ programmes that run in six of the most deprived communities in New Zealand.

Community renewal is the means by which we are able to build not only better houses but also better communities: communities that are safer, healthier, better educated, better connected to social services and with less unemployment.

One of these communities, Talbot Park, comprises 219 dwellings within a much larger state housing area.

In 2002 it was regarded as a ghetto: a run down, high crime part of town, disfigured with graffiti, rife with vandalism, unsafe for children, the elderly and the vulnerable, a wasteland, an area so undesirable that tenant turnover was up to 50% or more a year.

Today both the physical community and the lives of those within have been transformed.

We refurbished blocks of flats, and built new apartments and family houses - replacing 167 old dwellings with 219 new or refurbished homes, increasing the number of social housing residents from 500 to 700.

A recent article in New Zealand’s largest and most influential newspaper headlined the transformation, with a sense of amazement - as ‘state houses become stately homes’.

It wrote:

‘Four years ago, at public meetings to explain its proposal, Housing New Zealand was told, in no uncertain terms, it was building a slum. But at the official opening last month nothing could be further from the truth.’

The article described ‘tidy brick and weatherboard apartments and townhouses which would look just as much at home in Parnell or Remuera’ - two of New Zealand’s most up market suburbs.

And it described a human community in which residents, when shown their new homes, were overcome with emotions of disbelief, relief and gratitude at the quality. A community in which grafitti, vandalism and petty crime were all down substantially.

This achievement is not accidental. It is the result of five specific strategies.

One, we have built social housing that doesn’t look or feel low-standard. It looks and feels great!
Two, it is tailored to meet the needs of the people who live there. Six, seven and eight bedroom houses for large Pacific Island families. With designated study areas to make it easier for children to do their homework. And kitchens and living areas that look out over yards and roads to make it easier for parents to supervise children. Secure apartments for the elderly. And units with wheel chair access and low benches so the physically disabled can live independently.
Three, we use lighting, fencing and street design to create safer communities. There are no cul-de-sacs, properties or parks hidden from view. Homes and apartments are designed to monitor streets and parks. Potential troublemakers are watched - and know they are being watched.
Four, Housing New Zealand and its tenants have participated jointly in the creation of the new Talbot Park community. Landlord and tenants have organized morning teas and street barbeques for residents to get to know each other. Tenants have helped design house features and parks, name streets and decide on street vegetation. And they have helped create adult education courses designed to reconnect themselves and their neighbours to the mainstream of New Zealand life.
In other community renewal projects Housing New Zealand and tenants have worked together to create community gardens, cooking lessons, anti-violence courses and children’s sports programmes.
It is this tenant participation that is key to creating a strong sense of tenant community ownership. Several of the refurbished blocks of flats in Talbot Park have organized their own community meetings. And there is a ‘Talbot Park Residents’ Group’ that functions as a voice for residents.
Finally and importantly, we use intensive tenancy management. Tenancy managers inspect properties frequently. They enforce tough rules. No loud parties after 10pm. No dogs. No washing hung over balconies. No vandalism or petty crime. And tenants must mows lawns and keep properties tidy. But these tenancy managers are not just enforcers. They also ensure tenants who need help get that help. Access to health care, and education. And links to budgeting services.

And so, as a result of a hugely successful community renewal programme we have, in less than five years, transformed the quality of both buildings, and community life in Talbot Park. Tenant turnover in the refurbished flats has fallen from 50% to 5% a year. The community is safer There is less graffiti, less crime and greater opportunities for individual and family improvement.

Housing affordability – the new challenge

Most New Zealanders, however, pay rent to neither Government nor private landlord. Most New Zealanders own their own homes. With only 5% living in social housing.

And so our policy is not driven only by a desire to increase access to social housing. It is driven also by concerns about housing affordability.

Internationally rising property markets, easy credit and high rates of immigration have all contributed to the rapid inflation of residential property prices in New Zealand. And this has left many working New Zealanders unable to afford to buy a home of their own – especially those who live in our largest city and most expensive city, Auckland.

A recent report found a growing number of Auckland working households unable to purchase even the cheapest of houses. And it concluded that Auckland home ownership rates, 72% in 1991, could fall to 58.3% in 2016.

Such an outcome would increase the gap between rich and poor, limit wealth accumulation for retirement in an aging population, and negatively impact education and health outcomes.

And so we have developed four sets of initiatives to ensure the substantial majority of working New Zealanders can continue to afford to buy a home of their own.

Firstly, we have increased the accommodation supplement that assists more than quarter of million low-income recipients to pay both private rentals and mortgages.
Secondly, we have lending schemes. There is the Welcome Home Scheme in which the Government guarantees low or no deposit loans for low-income, first-time buyers of cheaper homes. In addition we are developing a shared equity scheme in which the Government will pay for about 30% of the equity in a home, and recoup that 30%, along with capital gains, when the property is sold.
Thirdly, we are looking at ways of ensuring that more affordable homes are built. We have initiated a Housing Innovation Fund to help to support local authorities and not-for-profits to undertake social housing projects.
Fourthly we are currently considering a ‘Housing Affordability Bill’ that would ensure cheaper dwellings were built in all developments where they were required. Such a Bill might give local bodies the power to require a percentage of affordable housing in new developments. It might allow them to reward developers for the provision of affordable housing by permitting more intensive development than might otherwise be allowed. And it might allow them to extract levies if developers don’t want to build cheaper dwellings.

Government is also using Crown Land to develop mixed housing communities that include affordable housing for first home buyers, social housing, and housing for the open market. In doing so we are aiming to both increase the number of affordable houses whilst simultaneously minimizing the concentration of disadvantage that occurs when social housing is concentrated.

We are doing this on both green and brown fields sites.

The first of the big green fields projects is Hobsonville. This is a disused air base on the fringes of Auckland. Here we have formed a subsidiary Government-owned company to build 3000 new homes. 15% will be social housing. 15% affordable homes for first home buyers. And the rest middle income and expensive privately-owned homes.

Here we aim to create a balanced community that mixes beneficiaries with low-paid essential workers and those on higher incomes. And we aim to enhance the affordability of this community by linking it to public transport, nearby jobs and schools, and by designing energy efficiency and water conservation into the fabric of the houses.

The first of the big brown fields projects is likely to be in an area of Auckland called Tamaki. The Talbot Park I have discussed already lies within Tamaki. Here we own 55% of 5200 dwellings that are occupied for the most part by large single-parent families and smaller households with high needs. The area is run down, with a high crime rate and poor educational and health outcomes.

The opportunity here arises from the fact that many of our properties are small houses on large plots of land. We are thus considering increasing substantially the total number of dwellings. And doing so in a manner that increases the total number of social dwellings, but decreases from 55 to about 39% the number of social dwellings as a percentage of total housing.

Our aim here is to create a more balanced community by adding new homes for first home buyers, affordable homes for modest-income families, and homes for the third sector and for the open market. In order to reconnect this neighbourhood with key services such as health and education we would apply the community renewal techniques so successful in reconnecting Talbot Park residents to the mainstream of New Zealand life.

Leading change once again

Our Government inherited a state housing mess. A public housing body that had been turned into a commercial enterprise charged with making a profit. Market rents that tenants could not afford to pay. Over crowding and consequential ill health. And the most rapid sell off of social housing in New Zealand history.

In response we have sought to increase the stock of social housing whilst minimizing the social problems that arise when disadvantage is concentrated.

We have reduced state rentals to no more than 25% of the income of qualifying tenants, thus reducing tenant turnover. We have increased the social housing stock by more than 7000. And instituted a healthy housing project that has reduced hospital admissions among families in those houses for bronchiolitis by 87%, and gastroenteritis by 63%.

We have run community renewal projects that work with tenants to build not only better dwellings, but also better communities. We have thus reduced tenant turnover in some locations from 50% to 5%, reduced petty crime and graffiti, and increased safety on the streets. We have taken areas once regarded as slums and turned them into sought-after places to live.
We have tackled the difficult problem of housing affordability with an accommodation supplement for more than a quarter of a million who have private sector rents to pay or mortgages to service. We have introduced lending schemes that help with home purchase. We are looking at a Housing Affordability Bill that would ensure cheaper homes are built in all private developments where they are required.

And we are minimizing the concentration of disadvantage by using Crown land to develop mixed housing communities that include social housing, affordable housing for first home buyers, and housing for the open market.

New Zealand’s was the first central government in the Western world to build public housing for its citizens. The first state tenants moved into their new homes in 1906. It was a response to the fear that the slums of the old world were becoming a fixture of the new.

That tradition was advanced by a Labour Government that in the 1930s viewed the poor as citizens with a right to decent housing. Our Government is in this tradition. And so we have sought to increase the stock of social housing whilst either avoiding or minimizing the social problems that arise when disadvantage is concentrated.

Thank you.

OTHER REGIONS +NORTHERN