Latest figures show Government spent $550 mln of taxpayers' money in past three months to put roofs over the heads of Kiwis - but the waiting list for houses is still getting bigger; Labour slams 'expensive band aid' emergency grants

By David Hargreaves

The Government spent over $6 million of taxpayers' money a day in the first quarter of the year (a total of $550 million) putting a roof over Kiwis' heads - but the waiting list for social housing grew.

And the Labour Party is slamming the latest emergency housing grants figures as "a very expensive band aid".

In releasing the latest Social Housing Quarterly Report from the Ministry of Social Development, Social Housing Minister Amy Adams says the increase in growth of the Housing Register (waiting list) "has slowed".

"At the end of March, there were 4865 applicants on the register – up just 2% from 4771 in the previous quarter," she said.

Adams said the Government was "helping more people than before, and sooner. 1800 families were helped off the register into suitable housing, and they spent less time waiting to be housed.”

The median time to house people was down 8% she said.

The Ministry's figures on the registry including by priority of needs, which are not included in the latest report, show that the number of Priority A people - those considered ‘at risk’ and including "households with a severe and persistent housing need that must be addressed immediately" has risen by 7.3% in the past quarter to 3422.

The number of 'Priority A' people has increased by 56.4% (from 2188) in the past year, while the overall number of people on the register has risen by 37.1%.

Adams does not refer to those figures in her release.

She says in the latest quarter 9218 emergency housing Special Needs Grants were paid to 2616 clients – totaling $8.8 million.

"We promised to look after those needing emergency housing and we’re delivering on that – supporting hundreds of New Zealanders with a safety net while we find them more sustainable housing."

Labour's housing spokesperson Phil Twyford styled the emergency housing grants figures as "another blow out in spending on putting homeless people up in motels".

"The Government is renting motel rooms at a rate of $33 million a year. It’s a very expensive band-aid."

Twyford said the March grants figure was up by 358 on the December quarter figure, while the $8.8 million spend in the March quarter was up from $7.7 million in the previous quarter.

"This means the Government has spent $16.6 million in six months issuing 18,078 grants to struggling families.

"At this rate the Government will have made 36,000 grants costing $33 million in the first year instead of providing 1,400 grants costing $2 million as expected.

"The fact the Government thought $2 million would be enough for a year shows how painfully out of touch they are."

Adams says as more transitional and social housing is secured, "we expect the need for the Special Needs Grant to decrease. New Zealanders needing housing support will continue to get it".

She says the latest figures "underscore the importance of our plan to grow the number of social houses available, from 66,000 today to 72,000 over the next three years".

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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75 Comments

This must be the "social investment" approach I keep hearing Bill and the media talking about... something along the lines of "spend a bit now to save on long term costs"

NZ SHOULD TAX FOREIGN SPECULATORS 15% & CAP RENTS LIKE TORONTO WITH 16 POINT PLAN JUST ANNOUNCED http://www.financialpost.com/m/wp/personal-finance/mortgages-real-estate...

Fantastic exactly what I have been calling .. Vancouver Tax 15% now soon to be the Toronto Tax also
(Although I will settle for the Ban Labour has suggested. Perhaps Ban existing and 15% stamp duty on new builds)

Per the link above:
The 15 per cent foreign buyers’ tax won’t apply to refugees and immigrant nominees, and a rebate "could be available for those who get citizenship later
Increase in rents is capped at 2.5 per cent, with some exceptions
Government to amend the Residential Tenancies Act to clarify text of leases and compensate evicted tenants
Identify surplus provincially owned land that could be used to build affordable housing
Tax vacant homes to push owners to sell unoccupied units or rent them out
Align property tax for new multi-residential apartment buildings with other residential properties
Municipalities could be allowed flexibility to use property tax as a policy tool to influence development
Effective immediately, the NRST which deals with foreign buyers will be 15 per cent on all property purchased in the Greater Golden Horseshoe, the area of south Ontario that is home to nine million Canadians.

Joe Public right ! You can see the GIANT LOOPHOLE in the Toronto 15% foreigner tax
Just use a nominee residing in Toronto
Best piece of the new law announced is ALL provinces of Canada will now be allowed to tax vacant houses
and they will collect land transfer tax on those speculators who re assign purchases for a quick profit without ever taking possession ! NZ govt must try all these points including a cap on rent increases .
If this seems draconian it maybe so but the Auckland property market has been like The Wild West utterly devoid of satisfactory regulatory control

Housing bought and sold within 2 years of ownership are taxed already so Govt already have that point covered.

I agree that vacant housing should be targeted in some way also overcrowding of housing aswell. However I think that Vacant housing should be left to local council to charge the owner. We don't need Govt putting another tax in place & policing it.

Rental Caps are ridiculous and Draconian. If you cant afford the rent then move to the suburbs and live within your means. Encourage building outside the main centers that will in future provide the basis for better public transport into the city.

This is a Transition that will last the entire span of our lives and if done properly will be world class. Auckland is a young city and is still a work in progress.

I dont understand why there is a 2 year brightline, it should be a minimum of 10 years.

The lack of "Draconian" measures led to wonderful things like CDO's, I think its been proven time and time again, unregulated markets (where money is involved) is a recipe for disaster. Unfortunately housing has become a market and needs to be regulated like one.

10 years is getting ridiculous. If you want 10 years then may as well make any capital gains on residential buildings taxable. (I am not opposed to this by the way)

I think it is a multi pronged approach, i.e. Make sure we are utilising all housing, Address the supply issue, review immigration, and lastly we need to find a way to relocate beneficiaries/non working families out of Auckland. We simply cannot afford to house them there.

Sluggy people have to shift locations for a variety of reasons why should they be affected by the brightline test?

You state that the housing market needs regulating - so I take it you are either not aware or are refusing to look at the regulations involved already with housing.....it is regulation that pushes prices higher. And there is regulation aplenty. I am currently running some budgets through on a build project we are looking at.......

A free market is an illusion.

you know what would be draconian? 100% cap gains tax for investors. That way you are actually investing in a productive asset. No problem if you're not speculating right?

This is silly.
The tax and rent control is a stupid idea.
Fast track supply/development and leave the market how it is. That's the only way to fix it, with a minimal amount of flow on effect.

What a success,!!!!

What a successful way to spend taxpayer money

Yep! if you have a million taxpayers, that is a cost of $550.00 each.

Hippy - very good point - but hypothetically lets say we have 2 million tax payers. On an annualised basis if this continues, NZ tax payers are going to be forking out approx $1000 per annum individually to support our housing ponzi/mass immigration/foregin speculation circus.

I can think of far better ways to run this country - with very little effort.

I-Observer. that is a drop in the bucket of the true cost. The police need a billion dollars to update staffing ratios and then there's hospitals, schools and 100 billion dollars deficit in infrastructure.
National crowed how clever they are because their GST take is up. These politicians have probably never run a business and we have trusted them with a country for 9 yrs.

Wow , how an earth did we ever get into this deep hole ?

Do you know how many apartments you can build with $550 million every 90 days ?

Last time we had anything even approaching this level of hellish cock-up failure they built whole new suburbs. Could we please just bloody get on with it, this is unacceptable.

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This is short term vision by the government and they are trying to put a positive spin on it. They are spending millions and making motel/hotel owners rich, bet some of them are connected to politicians or are family members. There is no disclosure required for this so who knows how much of this is driven by vested interest. Some of them are charging MSD over $1500 a week to house families, in some cases for months. What is even more annoying is some of these families were evicted from state housing on drugs and property damage charges, there are no consequences for that behavior.
If the government had the right approach they would have used all this wasted money to fund building new housing stock in public/private partnership so they are building an asset base. This is another way of them subsidizing landlords at the cost of taxpayers. I guess for someone who is working hard, paying their taxes, paying their mortgage this is a slap in the face for all their efforts because I don't see the government lifting a finger to give that lot any assistance.

Those who live in Auckland should consider buying affordable homes. There are affordable one-bedroom units for sale in Onehunga for $620k.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11841898

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$620K is not affordable - given that's a lower quartile price for a home in Auckland, expectation should be if the market is fair to all concerned, that it would be purchased by people on lower quartile salaries (people on medium incomes buy medium income homes, people in highest quartile salary buy highest quartile homes). At a guess that would be a combined income of approx $50-60K p/a for Aucklanders in lower quartile salaries. So you're still looking at a Price to Income ratio of well over 10 - which by all historical standards is an outrageous price to pay for a property.

Doubly dillusional yet again from DGZ.

Oh, and what do you do with the kids in your one bedroom unit? Do they sleep on the couch or the floor - or in the car?

It's been reported as affordable in the Herald, as per the link. In fact the word 'affordable' is all over the article if you read carefully, so it doesn't make it affordable?

I guess now is as good a time as any for you to learn this: sometimes newspapers don't tell the truth

Yes the Herald - that newspaper full of alternative facts....

He was being sarcastic. Or funny?

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I am sorry , maybe I am too old for this , but a one bedroom apartment in Onehunga for $650 k is not affordable ...... its not even reasonable or sensible .

How much is that per square metre ?

Probably easier to understand at price per square centimetre

Apparently a one bedroom apartment in a not particularly central suburb of Auckland is now on par with Manhattan, New York.

Manhattan for $625,000.

Perfection

It's within less than a days walk of Auckland International Airport

It might not be central to the CBD, but, in the memorable words of Basel Brush III, Onehunga fits within the desirability criteria for Chinese buyers - within a days walk of Auckland International Airport - perfect

Yeah, come on, be fair, that's USD = NZD890,000! Bit more than $625,000 !

True but you would be earning easily the same numerical figure in USD living in New York vs someone living with a similar occupation in Auckland

Surely you're not arguing a person living in Manhattan would make a NZ salary in NZ pesos?

You'd be making a NY salary with which to pay for that apartment. So, for example a Developer on US$100k will get a better deal on an apartment like this than a Developer on $100k in Auckland.

Maybe the living area, dining, entertainment area is a luxury 100 square metres - I'm joking of course

Haha wow, they have a communal bbq, thats probably half the price right there.

Fiscally responsible my feathery arse.

In the name of sanity could we build some motherflippin' houses and apartments so that people can live in them, and tourists can stay in the motels. This should not be so difficult.

on top the housing accomodation supplement!

$620k for one bedroom. Do you know how much banks are willing to lend a single income two young children family, $180k. You ask them to go over your very good credit history and that takes you to $210k. So we'd have to stump up $410k and all share a california king bed.

Thank god we're not trying to buy in Auckland

But you're not appreciating, it's a sign of our success! You should be celebrating.

So rent and save until you are able to afford a home in Auckland otherwise buy elsewhere If home ownership means so much to you. Simple.

You're missing the underlying principles here ballz that are important.

Why should young people have to leave their city of birth, where their family are, and their established jobs are, so that property developers, speculators, landlords and foreigner buyers can create a housing ponzi that is putting the entire countries economy at risk?

We've allowed idiots to be idiots without regulation for too long and the hole is starting to get too deep to recover from - why not fix the underlying issues here as opposed to do nothing and expect the young (who have no involvement in the cause of the issue) to pack up and leave town?

"Why should young people have to leave their city of birth"

There is no divine right to buy a house in the city of your birth.

Not any more Ralph - you're right! Yet I was full of hope when I was younger that if I worked hard, that it could be possible.

Much better for the future of the country to sell a house to rich foreigners and landlords who already own 5 houses.....

This highlights the failure of our values as a country - there appears to be more support towards allowing someone rich from Shanghai to buy a house in New Zealand, than there is for a young local. I fear we're losing our way...Go back 10 or 20 years - this concept would be outrageous. Yet here you are Ralph highlighting a very good point. Thank you.

Well, yeah, native populations are often asked to make way for new populations. It's part of history. Of course, these days native populations are typically afforded some rights to their country of birth, and compensated when they're turfed off it.

There's no divine right for a place to have policies that make houses about investment rather than homes for the people who live there either. That's why those who live in a place will ultimately vote for leaders who will deliver better outcomes for them.

Young voters need to be asking politicians to rebalance policies back to what NZ had in the past - i.e. policies that broke up land banks and created the high rate of home ownership enjoyed by people born at the right time to benefit from these policies.

One of the most cherished values in Australia was to be "Australian" and talk the Australian talk and wear an Akubra and a Driza-Bone and know how to chuck a prawn on the barbie and how to sink a Fosters or a VB

Moves by Australia to close their borders more tightly are based on new arrivals adopting "Australian Values" and to demonstrate a good command of the English Language and to prove they are assimilating into the community - not just their own ethnic enclave, but the wider Australian Community

In the "9th floor" interview Jim Bolger states the "New Zealand ethos" is one of fairness

Dont think thats working too well Jim

NZ does not have a citizenship test - all the others do

Following article - NZ gets a mention

"The US, the UK and Canada all have citizenship tests. All test different things – history, values, institutions and symbols. New Zealand does not have a citizenship test"

https://au.finance.yahoo.com/news/malcolm-turnbull-apos-tougher-citizens...

I think you are missing the point! They don't have to leave the city of their birth at all and there are many avenues for them to stay there (Rent, Buy, Live with Family, etc) The same as the rest of the country. You are calling it a Ponzi but that is just your opinion, it doesn't make it fact. Id like to see the Average of the population in Auckland, I assume the young are not as you say packing up and leaving.

Judging by the chatter on NewstalkZB talk-back radio last night the empty-nesters are getting out of Auckland in droves and going to Tauranga, Napier and Gisborne - even as far afield as Foxton - the locals are not happy

I'm not saying they are - but I am saying that they shouldn't have to unless of course they want to stay and rent for the rest of their lives. All so investors/speculators/foreign money can play a risky game of capital gains.

No idea what part of the country you are - but if the Auckland housing market crashes, it will effect you. So you may not take any interest in it, but it's putting the health of the whole NZ economy at risk. So I could shift, only for the market to crash, economy slumps, then lose my job in the new location outside of Auckland. We need to fix the underlying issues here to stop this house trading that's going on.

It may not be a ponzi, but it sure looks and smells like one!

Are you aware of what happened to the likes of US, Ireland, Spain and Japan when their assets were this elevated?

The hidden costs of immigration.

I wonder why there is this shortage of housing? The government assures us that 70,000 immigrants a year is a celebration for being popular.
We need to train and hire more police, more school teachers, more nurses etc etc...
We need to build and pay for over 100 billion dollars of infrastructure.
These are extra business expenses that are not being covered by our falling export earnings. The more people that live in NZ the less for everyone.
If we export 43 billion dollars of produce and tourism then that's how much money there is to import oil, cars, computers etc etc...
Our population is growing and our export earnings are going down. In a business that would have the smell of going bankrupt.

No one knows how many houses there are sitting empty in Auckland or around the country.

I've said this before - more than $2 billion a year to subsidise landlords, investor and speculators and therefore the housing crisis. Putting money before their responsibilities to the majority of the people. Labour are no different!

and the crazy thing is that it is year after year, if you went back and total the spend then worked out how many you could of built over the years, there would not be a housing crisis , house inflation would have run at single digits,
as usual ideology overrules good financial principles

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This is what happened to Argentina. It started out with a small population that was kept in style by its agriculture. Then Buenos Aires swelled but the export receipts stayed the same and had to be shared with a much bigger population. We're repeating the Argentinean mistake with Auckland ballooning but no increase in exports so the receipts have to be shared with more and more people. It's economic suicide.

Didn't the Argintinians also have the CIA interfering with their politics?
Or was that historically latter on?

Yes Graham it is a no brainer that more people living off an income means less to go around. In NZ's case not only is there less to go around but it is also being shared disproportionately.
People who own multiple properties are becoming rich.
People who own one property foolishly think they are getting richer so they are happy as well.
The people who don't own property at all are paying higher rent, competing for the same jobs against more people and haven't got a hope of getting ahead. They are the ones who are paying the bill for this population growth.

Time for change. Vote change. Vote Labour.

What a mess. Ignoring foreign buyer and investor demand has so many consequences and we are starting to see them. High prices equals high rents equals high subsidies .....

Change, change, we must have change. Change that isn't change, change regardless of the cost.

Lemmings in the dark, we all chant 'change'.

Nah, vote National for a 'brighter future' eh Ralph.

Why am I not surprised yet another government makes a mess and after three terms we throw them out to let the other mob try to fix up
both sides get caught up with ideology which over rides good economic principles
why spend more and more now rather than invest in the future? we can only sell so much to pay for it and once gone hard decisions will need to be made

I personally think all homeless, should be housed at the Beehive. I am sure a quickfire solution will be found...to hive off the unwanted and totally unwarranted attention.

What do we pay these overpaid stupid Politicians for.

We need solutions, not problems, in this day and age.

The nutters are running most Countries. Our has more per capita, than we can cope with. Talking around and around problems, does not fix em...But that is why we have so major problems ...Today.

Not casting any votes, just railing against empty headed chants dressed in drag as debate.

America voted for "change", look where they are now.

There seems ti be some assumption that change is always good, or it can't be any worse. Both of which are wrong.

I don't want pointless or empty change, change for the worse or change at any cost.

Where is America now Ralph?

Politics is just a reflection of societies values (in a democracy). Obama created the Trump supporters through his actions/inaction. So in my opinion, Obama created Trump. If Obama governed differently, Trump supporters wouldn't have emerged. They would have been satisfied with status quo. But Obama neglected a proportion of society, much the way National is doing so right now. If we end up with a Trump in NZ, we can blame current National supporters for creating him/her for they are driving Nationals policies (self-licking ice-cream cone type stuff) - which for a younger person in NZ, are really starting to %#@ me off...

Bernie sanders was, for Americas youth, the only glimmer of hope and that was promplty snuffed by a corrupted political system. People would have voted for an Alsatian dog over Clinton. We have real choices in New Zealand. You can either vote labour / green for real change, or any other political party for more of the same neoliberal laissez-faire government we’ve had for the last 9 years.

I agree Pat - my opinion is that Bernie would have beaten Trump head to head. But Hillary got in the way...

I think Little could be the downfall for Labour/Greens. My opinion is that he should stand aside if they're to have a chance of rolling National.

Little seems to have brought Labour together, something a few have had trouble with since Helen, and now people are not under the sway of the smiley wavy one and can see that absolute mess he has left to Bill English, I think they will vote with the heads for a change. Yes, Little looked like Joe 90 with his glasses on and now looks like Joe 90 minus glasses without, but that should not be the measure of the man. We all know where admiration of surfacey attributes get us.

Yeah Little's a solid guy. I saw him joking that he'd take up busking if he'd lost that trumped up defamation case. The Nats and MSM have pegged him as an Achilles's heel so I expect nonstop character assassination, sandbagging and negative innuendo right up until the election (just like last time). If Labour and the Greens want to win they probably just need stick together.

And we should remember that Little knows all the words to The Redemption Song while Key could not even recall where he stood over the 81 Springbok Tour.

Key did have some fortunate memory lapses.

I'd welcome a spell of dull and honest after 9 years of corrupt and incompetent used car salesmen.

What a laugh. People who vote national here in NZ can be likened to those who voted for Trump in the USA. The Democrats (Much like Labour Supporters Here) screamed at, protested and physically and verbally abused republican supporters so they keep it to themselves that they liked what Trump was standing for. This can be seen here, you have people like yourself and alot of other commenters on here who make outrageous accusations and predictions. Alot of people are happy with the way the country is being run, they look past just one issue like housing and consider the facts, their community, their opportunities etc. Come this election National will still be the preferred party and you will again say everyone in this country are idiots for voting them in for another term and try convince everyone that National are bad news.

If you look at the number of rentals being advertised on trademe you will see there is no shortage of rentals in Auckland. The problem is the accommodation allowance has not kept pace with rent increases. This means more and more people just can not bridge the gap. DSW / the Government are being creative by paying money for emergency accommodation which is not counted as accommodation allowance. To fix part of the problem they need to link the accommodation allowance exactly the same way they link the rent subsidies that get paid to HNZ. Every time the rents go up in the private sector HNZ gets paid more. Investors will always provide all the housing needed if someone will pay them what it costs to provide that service. There is no shortage of food in the shops but there is no Government control on food prices nor restrictions on the provision of shops to sell it.

Yeah food prices and availability are left to the free market to work out. Not interfered with by Government.
Housing is heavily manipulated by government with rent subsidies, state housing and artificial intense population growth not to mention availability of infrastructure.
A freemarket sorts itself out and works out its true value. With all the interference in housing no one knows what its true value is.
Up North here, the true value of a house to keep you warm and dry is about $50,000 for the build if you step out of the system and don't have building permits. Another $20,000 gives you an excellent solar power system.
Composting loo $2,000. So there are alternative folks. But you have to step out of the system and $50,000 build is top end. There are plenty of people living in cargo containers with a long drop. Thats like a $10,000 home. Some people even bury the cargo containers for insulation and to make sure they stay off council radar. NZ's low economy rural communities are where the innovation and future is. As usual the hippies are 20 yrs ahead of every one else. And we are laughing at you in your rat race stupidity! Not gloating, we feel your pain and we care. So don't ring the council and tell on us. THANKS!

, there are very few bubbles in the world right now. But there is a bull market in people running around calling everything a bubble. Please ignore those people. The only real, honest-to-goodness asset price bubbles out there are in residential real estate in Canada, Australia, and Sweden. They are going to end up in the landfill in New Mexico with all the Atari E.T. cartridges.
People (including me) were pretty bulled up on Atari 2600 video games back in the day. This led to Atari getting a little out over its skis, producing way too many games and ending up with a boatload of excess inventory. The situation was so embarrassing to the company that they dumped them all in a landfill in New Mexico in the middle of the night. The games were excavated (by archaeologists!) over 30 years later for a documentary.

Jared Dillian

Trump dropped the MOAB on Afghanistan against terrorism!!!

The National Party keeps dropping similar MOAB's on the kiwi people, such as Immigration, the housing crisis..

To all out there, especially property "bulls" saying this property market is a "free market" well, I say ###### !!

Taking rents as an example, if it was a "free" market, the taxpayer would not have to "top up" peoples rents, through the accommodation supplement ....in a real free market, the corresponding market forces will decide the "true" value of rents. This is household income received from wages/salary/a business etc, and it's on this basis, rents should set.

If a household can not afford the advertised rent, they should find accommodation they can afford, not come and ask the taxpayer for a handout, because a greedy landlord wants an $XXX per week !!

If we were "punching above weight" economically, as so many in the media rave on about, we wouldn't need an accommodation supplement and landlords would have to take what people can "really" afford - not topped up with taxpayer money !!

Free Market .....my *** !

http://thespinoff.co.nz/society/20-03-2017/more-new-zealanders-are-renti...
'Over the 11-year period 2006-2016 rents increased at a much slower rate than house prices but faster than wages. For example, nationally house prices were up 67%, wages 33% and rents 53%. The situation in Auckland is more difficult for tenants with house prices up over the same period by 115%, rents up 45% and wages 33%"

Auckland House prices up 1/2million and wages up 20k

Time for Change .... http://www.labour.org.nz/cracking_down_on_speculators

Under our policy only citizens and permanent residents will be able to buy existing homes. The ban will also apply to foreign trusts and foreign corporations. Removing this speculative demand from the market will help stabilise prices and give Kiwi families a fair shot at buying a place of their own.