The government is comfortable with its interventions to date to help with a housing shortage and rent rises in Christchurch, but is open-minded to future moves.
Housing Minister Phil Heatley said in Parliament today that although the government was "not considering...at this time" regulating the Christchurch rental market, it was boosting the supply of temporary homes available in Christchurch.
“The Minister responsible for earthquake recovery announced last week that we’re providing more temporary accommodation in Christchurch to provide for supply," Heatley said in response to questions from New Zealand First MP Denis O'Rourke.
“Clearly we’ve got new developments coming on stream, and we believe that supply will help meet demand and therefore drive down rental and house prices. That’s what our primary objective is,” Heatley said.
O’Rourke asked whether the government would consider providing some form of bridging finance to help people buy homes in Christchurch, given houses were getting more expensive and harder to buy.
Heatley said there were already a number of forms of finance the government supplied.
“Clearly we’re buying people out of properties in the red-zone where they can take that check and buy elsewhere. I’m assured by the Minister of Earthquake Recovery (Gerry Brownlee) that when he reads the newspaper, there are sections and house packages available," he said.
“We also have the temporary housing villages, Mr Speaker. We have the accommodation supplement, those seeking rental in Housing New Zealand properties have the Income-related rents supplement.
“Yes, we’re open minded to any other interventions, but at this stage Mr Speaker, we believe that our progress so far is sufficient. If we need to ramp up, we will,” Heatley said.
Heatley had been answering questions on housing affordability in Question Time. In response to an initial question from Labour MP Annette King on what the government was doing to improve housing affordability in New Zealand, Heatley said the most important actions it had taken was to manage the economy well, cut tax rates and provide the scenario for low interest rates.
“We’ve also changed the Building Act and the Resource Management Act to remove unnecessary red tape, and we’ve increased Welcome Home Loan caps since we’ve been in government," Heatley said.
NZ$1 bln lent under Welcome Home Loans
"In fact seven-and-a-half thousand people have bought their first home using the scheme, a total value of borrowing [of] NZ$1 billion. That’s an awful lot of first home buying,” he said.
Under the Welcome Home Loans scheme, first home buyers can borrow up to NZ$350,000 in high-priced areas, with a deposit of 15% of the amount borrowed above NZ$200,000. For example, on a loan of NZ$350,000, an applicant would require a deposit of 15% of NZ$150,000, which is NZ$22,500. See more on the scheme, and the financial institutions participating in the scheme here.
Annette King raised the scenario of an 85 year old housing New Zealand tenant in Christchurch who had been told to vacate her temporary accommodation on Saturday, with no accommodation offered by Housing New Zealand, “and with her family finding it impossible to even contact the department.”
Heatley said he was aware of the case, and that Housing New Zealand was aware of the case.
“There is no doubt that there are significant housing issues in Canterbury. But it would be fair to say, Mr Speaker, that over the last twelve months, the pressure on Housing New Zealand tenants, the way that they’re being managed, shifted to alternative accommodation, has caused very little political or actual noise at all, and Housing New Zealand’s done an excellent job,” he said.
Labour MP Rino Tirikatene raised issues of overcrowding in Christchurch accommodation:
“For example, eleven people crowded into a two bedroom house. Or people renting a garage to live in for NZ$160 a week. Or the young man sleeping in his car when he’s not delivering pizzas, because he can’t afford a rental or find a place to live,” Tirikatene said.
Heatley said he was aware of some of those situations from media reports.
“I think Opposition members need to realise that, yes, there are housing pressures in Canterbury due to the earthquakes, but they should also remember that when we set up temporary accommodation, whether in the form of caravans or the units that are very successful in Kaiapoi and Linwood now, the opposition parties attacked that and opposed it. So they can’t have it both ways,” he said.
Mana Party leader Hone Harawira asked why the government got rid of the Rural Housing Fund, “leaving more than seven thousand Tai Tokerau households without the badly-needed renovations that had been approved under the fund?”
Heatley said the government had decided to put that amount of money, and more, into the development of new housing, “particular Papakāinga housing on multiple-owned Maori land or other land that Maori and Iwi use.”
“That fund’s been very successful. We figured that new houses, well-insulated and well-designed, is much better than patching up roofs that are leaking, roofs that are rusting, houses that are uninsulated and rotting, which is what happened under the previous Labour government,” Heatley said.
Increasing state homes in Auckland
Housing New Zealand provided almost 70,000 houses across New Zealand which housed 220,000 people, Heatley said.
“That is a huge commitment. The fact that they’re increasing housing supply in places like Auckland is the right direction," he said.
“The idea, like under [the] previous government, where you had one person rattling round in a four bedroom house, entertaining gangs in state houses, all those things are being put behind us. I believe Housing New Zealand’s heading in the right direction.”