The Green Party can go to the September 19 election saying it managed to follow through on its promise to deliver progressive home ownership models - only just.
The Government on Friday took its first step towards helping more New Zealanders into their first homes via progressive home ownership, by giving two community organisations a total of $23 million to scale up their existing offerings.
The Housing Foundation in Auckland received $17 million to deliver 78 homes mainly through its Shared Home Ownership Programme, and also its Rent to Own offering.
The Queenstown Lakes Community Housing Trust received $6 million to deliver 25 homes through its Secure Home programme which offers leasehold homes.
Each organisation will use the funding to scale up their existing programmes, offered according to their own eligibility criteria.
There are currently 7000 families on the Housing Foundation’s waitlist and 600 families on the Queenstown Likes Community Housing Trust’s waitlist.
Both organisations also offer other products and services, but the funding will help them ramp up their progressive home ownership offerings.
Housing Foundation general manager of operations, Dominic Foote, said the organisation was recruiting more staff.
Meanwhile Queenstown Lakes Community Housing Trust’s executive officer, Julie Scott, said the funding would put the trust in a stronger position when securing bank funding.
The Labour/Greens’ Confidence and Supply Agreement stipulated a commitment to delivering “innovative home ownership models within the State and broader community housing programme”.
It said, “A Rent to Own scheme or similar progressive ownership models will be developed as part of Labour’s Kiwibuild programme.”
Housing Minister Megan Woods said work was underway to establish an initiative within Kāinga Ora for households with an annual income of under $130,000 to receive shared ownership support directly from the Government.
This is expected to be available in early 2021.
In the meantime, the Government will look to support more community organisations to scale up their progressive homeownership models.
It has allocated $400 million towards progressive home ownership.
Asked why Kāinga Ora couldn’t simply lift successful models already in use, and roll them out at scale, Green Party co-leader Marama Davidson said: “The beauty about the community housing providers is that they have taken time to form relationships and they know the communities because they are in the communities. The Government can never immediately replicate that... This is the start to scaling up.”
This is how the Housing Foundation describes its Shared Ownership Programme:
Our Shared Ownership Programme provides an opportunity for you and Housing Foundation to share the ownership of a property. You would buy a majority share of the property (usually 60% or more) making it more affordable for you than if you were to buy 100%.
Housing Foundation would retain ownership of the remaining share of the property (e.g. 40%) and both you and Housing Foundation would be recorded on the property title as owners until you are able to buy us out. Most households are able to do this within 7-10 years. You will need a deposit (your savings plus KiwiSaver) and a mortgage for the balance of the purchase price to buy your share. This will all be explained to you in detail before you are asked to sign a Shared Ownership Agreement. Look at this example where you buy 60% and Housing Foundation retains the remaining 40%.
This is how the Queenstown Lakes Community Housing Trust describes its Secure Home model:
Secure Home is based on a leasehold agreement between the Housing Trust and the household. Essentially, the Trust retains full ownership of the property and the household purchases the right to occupy that property at the cost of house construction (excluding land). The household then pays an annual ground rent to the Trust for use of the land, which is set well below market value and only ever increases annually with inflation for the period the household remains in the programme. This ensures the initial purchase price (Upfront Payment) and ongoing ground rent remain affordable for the household in perpetuity.
The Secure Home agreement provides a 100-year lease, which provides the household with a home for their lifetime. Secure Home is not a rental arrangement. A household in the Secure Home programme has all the benefits and responsibilities any home owner has, except the ability to on-sell the property in the private market.
The lease cannot be transferred or on-sold on the open market, but should a household decide to move on, the Trust will purchase the house back at the original purchase price, plus an annual inflation adjustment (provided the house has been well maintained). If the household has made any improvements to the property which the Trust has approved, then these too will be factored into the resale price.