Thursday, 29 Jul 2021

Home Truths: Simon Wilson explores the community housing solution

Runaway house prices have made renting as well as buying unaffordable for many New Zealanders. Simon Wilson gets a first-hand look at the new wave of community housing and wonders if this could be part of the answer.

Suddenly there was sunshine. Gleaming on the new walls and windows and the lush wet grass. A fenced-off field next door, all dug up and waiting for more houses to rise from the clods. The school behind the trees, children running and shouting in their playtime delight and when the bell rings its Dave Dobbyn’s Welcome Home. Early winter in fast-growing Flat Bush and you’d call it maybe a little bit warm.

There was a crowd, gathered under a marquee, the dignitaries chatting politely, the mayor working the crowd as he always does, the builders, planners, architects, assorted officials, the funding agents and philanthropists, the local board, the Salvation Army in all their buttons and epaulettes. The neighbours. And some residents, people who have been waiting so long in the cramped misery of motels and who will now live here. The little swarm of preschoolers who turn the bike shed into a jungle gym.

Housing Minister Megan Woods in a floral frock, earnestly chatting; Prime Minister Jacinda Ardern in a black wool coat, smiling at everyone.

Welcome home to the Kaitiakitanga Housing Community, one of three new Salvation Army housing projects in Auckland. Kaitiakitanga has 36 two-bedroom units, another 10 single units, all entirely self-contained but also with communal facilities, a manager’s home, scope for support services and lots of bump space.

Bump space is what they call the shared areas – outside and in – urban planning that knows it’s good for us to bump into our neighbours, randomly and frequently.

A good home is a healthcare device, they like to say, and there’s a whole healthcare skillset at work here.

“The homes are designed first and foremost to foster a supportive community,” says Commissioner Mark Campbell, “with plenty of room for groups to gather, including garden spaces. Added to this is the ongoing support of the Army’s suite of services designed to strengthen relationships and encourage whanaungatanga.”

Weaving the ties that bind. Welcome to the world of Community Housing Providers, CHPs or, as they like to say, “chips”.

These are not-for-profits, including church groups, iwi and other Māori organisations and a spread of other community and funding groups. All of them determined to do this work and do it well.

No one doubts the demand is there. Agencies referred more than 300 applicants for places in Kaitiakitanga.

Nationwide, the numbers are dire. The waitlist for public and transitional housing is approaching 24,000 and keeps rising: the higher property prices go, the more people get pushed out the bottom end, unable to buy, unable to afford the market rents, reduced to desperate need.

The Government is “on track”, says Woods, to build 18,000 new homes by 2024. She and Ardern both call the programme “unprecedented” in 50 years, which is true, and they admit it hasn’t been easy.

“Gearing up Kainga Ora to do that has been a massive undertaking,” says Woods.

Economist Shamubeel Eaqub says 18,000 is an increase of 10,000 on the current level (March figures), which still leaves a shortfall of 14,000, with over 3500 of them in Auckland.

“We are planning to fail,” he says.

The Salvation Army says the new tenants in Kaitiakitanga include parents who had been separated from their children, to limit the disruption to schooling. Also “older people and pensioner whānau, many of whom were living with extended family in overcrowded accommodation”, and single fathers, too, a group “often overlooked by landlords”.

The prime minister barely stops smiling. And why would she? This is Government support to provide homes for people who need them most, with the not-for-profits making it happen. She calls it “the perfect partnership”.

NOT SO long ago, the CHPs might have baulked at that. Ribbon cutting aside, they’ve been frustrated at how little money the Government commits to the sector. The construction of Kaitiakitanga was funded entirely from private sources.

National’s housing spokesperson, Nicola Willis, has consistently called for funding to increase.

The minister’s response is blunt. “We’re not subcontracting out our responsibility to build social housing,” she says.

So what are they doing?

The Salvation Army projects were built with a $40 million community bond put together by Community Finance, with the core of the investment coming from Generate Kiwisaver.

The Government didn’t underwrite the bond, but through the Income Related Rent Subsidy scheme (IRRS) it helps with the tenants’ rents: in this case, it pays 75 per cent. The commitment can be for as long as 25 years.

Woods says that gives the housing provider “leverage”: it can assure potential investors the rents will be paid.

“Everyone’s a winner,” explains Community Finance CEO James Palmer. Investors get a 2 to 3 per cent return which they know is reliable and, an important bonus, they get to know their money is doing good in the world. The tenants get to have a home in a community and they can afford to stay living there. The Government gets more people off the waiting lists and well housed.

On the back of this scheme, Community Finance has launched the Aotearoa Challenge, aiming to raise $100 million for similar projects run by community housing providers. They’ve got $71 million already.

Megan Woods calls the approach “innovative” and says it’s “something I’m really excited about”.

“It’s very scaleable and Government and investors love it,” says Paul Gilberd, Palmer’s colleague at Community Finance.

There’s even a name for it: impact investing.

IN FLAT Bush, the official party is inspecting one of the units. Carpet soft underfoot, the interior layout tidy, the whole place toasty warm. The PM opens cupboards and peers at the fittings.

That toastiness is by design. Architects Fat Parrot specified Formance Structural Insulation Panels (SIPs), a proprietary system for walls, ceilings and floors, comprising foam sandwiched between rigid board. The insulation rating, known as the R-value, can be double what’s specified in the Building Code.

Extraction and air-circulation systems also do their bit: these homes will be as warm, dry and energy-efficient as can be. The heating bill for the unit we’re in now will be about $10. A year.

Water is retained for reuse on site and those SIPs also provide good sound insulation: a major issue for terrace and semi-detached housing.

Paul Gilberd, Palmer’s colleague at Community Finance: “This is really important. Everyone is trying to work out, how do we not skimp on construction and create slums?”

Mayor Phil Goff, in his speech, evokes Michael Joseph Savage. “What we do,” he says, “can be called applied Christianity.”

Jacinda Ardern sees his Savage and raises him a Norman Kirk: “‘People don’t want much,’ he used to say. ‘Just someone to love, somewhere to live, somewhere to work and something to hope for.'”

She’s been using this quote for a few years now.

Also, she says, “We will keep pulling every lever we can,” and, “We’ll keep going until all the needs are met.”

This year, for iwi, the levers have been significant: $380 million allocated to build 1000 houses and another $350 million earmarked for infrastructure to support new housing.

Chris Glaudel, deputy CEO at Community Housing Aotearoa, the “peak body” for CHPs, calls it a “huge step in the right direction”.

And he likes the look of that infrastructure lever for the whole sector. “We know Government and councils are putting in infrastructure for development,” he says. “When that happens, maybe landowners should be required to make 10 or 15 per cent of the land available for social housing. So everyone can benefit from the value capture.”

The model has already been used successfully, he says, in Queenstown.

Beyond that, Glaudel would like to see a national housing strategy, enshrined in law. “We’ve got a lot of useful programmes now,” he says, “but we don’t have a strategy, so we don’t know how permanent or long-term any of them are.”

Again, the iwi sector leads the way. With the support of Te Matapihi, the peak body for Māori CHPs, a national Māori housing strategy already exists.

MC for the morning in Flat Bush is the Salvation Army’s Greg Foster. He doesn’t mince his words. “We’re adding 50 homes here, 46 there, 22 here,” he says, “but it’s only a drop in the ocean.”

Paul Gilberd thinks things are changing, although he confesses to being “a terrible optimist”. He talks about “green shoots” and points enthusiastically at the $82 billion now held in Kiwisaver funds.

“We really do have the capacity to solve our housing issues with homegrown housing solutions,” he says, “using New Zealand money.”

Foster reports the builders’ view of the school’s Welcome Home bell. “The first week was great. But 14 months later?”

The PM channelling Norm Kirk can feel a bit like that sometimes.

House hunters respond

On Saturday we shared the stories of first-time house hunters. Here’s what they have to say about the ideas in today’s Home Truths coverage.

Kelly

What a great initiative. The houses sound like they are built to a high standard, and on top of that, thought has gone into creating a community space, a positive environment for those who have been through hard times.

I cannot see how you could lose from this. Everyone wins.

How will this affect the market depends first on how the buildings themselves stand the test of time. If they are well looked after, they will help increase value in that area.

As the rental market canbe unaffordable for lower income families or solo parents, this sort of initiative will offer a solution to those families. That has a ripple effect in the rental market, which then has a knock-on effect on the housing market.

Will it bring house prices down in value? Probably not, but will it solve a huge issue in New Zealand for those struggling to find a house – absolutely!

Tim

Social housing has existed here and worldwide for a long time — nice to see these but why the long queue? This need is not a new phenomenon.

The idea is lovely, but the reality as seen in similar projects here and in comparable countries makes me wonder how long the ‘community’ will hold.

Finally, if the government can get these built without using for-profit developers, why not build twice as much using the funding from KiwiBuild, then sell half of them at cost price to first home buyers?

40 years of sky-high house prices

Follow our interactive timeline which traces how and why house price rises have risen so sharply from 1981 to 2021

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