Getting lower-income families into home ownership won’t just ease the housing crisis – it will have social, health and economic benefits across the board, new research says.
The Housing Foundation has gathered a raft of international studies showing how getting low and low-middle income families into their own homes has benefits for mental and physical health and job security, while lowering crime and welfare dependency and increasing asset wealth and education.
Foundation general manager Paul Gilberd said getting people out of the broken system of tens of thousands of people stuck in often substandard rental poverty traps and welfare dependency was the key to solving the housing crisis.
“If people can’t move along the housing continuum, then there’s no space for others behind them. We need to get the blocked housing system flowing again,” Gilberd said.
READ MORE: * Wellington City Council puts affordable and social housing on urgent agenda * How affordable housing can be ‘good for everyone’ * Philippa Howden-Chapman highlights NZ’s increasingly embarrassing housing crisis * Weekend housing protest in Lower Hutt draws hundreds
An affordable house was one in which one-third of household income went on either rent or mortgage – “and that’s absolutely not happening”.
“When people don’t own things, they don’t look after them. The decline of home ownership is not good for New Zealand society at all levels.”
Modelling done by economic research firm BERL for the foundation also shows moving renters into homes could save the government millions in hospital, jail and welfare bills, while boosting jobs and the tax take.
Moving 1000 social housing renters into home ownership could produce a net fiscal saving of $11.1 million over 15 years, BERL’s data shows.
The foundation’s report shows a dramatic shift in home ownership over the past 25 years. Between 1991 and 2015, home-owning households dropped from 74 per cent to 64 per cent.
Over the same period, renters increased from 23 per cent to 32 per cent – a figure Gilberd said was set to keep rising if the housing system was not unblocked.
Sisters Awhi and Amba Te Ngoungou have escaped the rental trap and are into their first home in Stokes Valley, Lower Hutt. Both agree home ownership benefits family and wider society.
Awhi bought the house backed by the KiwiSaver first-home buyer scheme, and hopes to make it a family home and intergenerational asset.
The plan is for Amba and her two young children to eventually become trustees.
“We’re happier here, and the kids are warmer and it’s a stable environment. We’re investing in our dream,” Amba said.
“With lots of prayer and hope and faith, we got there in the end. It’s been a blessing,” Awhi said.
Charles Waldegrave, who leads the Family Centre social policy research unit, said the research was done to give the Government solid evidence to drive housing policy based on tenure and ownership.
On the back of the soaring house prices and climbing rents, one International Monetary Fund (IMF) survey showed New Zealand had the second highest growth in houses prices in 2015, and the highest jumps – relative to income – of any country.
Waldegrave said the IMF survey showed the situation was grave, but was being dealt with from a policy perspective that looked to the market, business and developers for solutions, rather than a social housing and home ownership angle.
Children in low-quality rentals were growing up under massive stress and insecurity, which could affect brain development, while future generations would not own their own homes as they aged.
“These are really serious problems that will create massive poverty in the future if we don’t do something about it now,” Waldegrave said.