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Community and Environment Committee
8 June 2016
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Local Government New Zealand Social Housing
Forum
Wellington,
Wednesday 16 March
Attendees
60 participants
from a 15 councils, both staff and elected members.
Of the 15 councils
represented:
- 12
currently intend to continue to provide social housing into the future
- three
are considering whether to continue
- five
are investigating partnership options
- at
least one is delivering social housing through a CCO
- at
least five are actively looking to increase their social housing provision.
Key themes in the
feedback from the councils represented included:
- Age
and style of housing stock (a lot of it older bedsits – many
Council’s seeking to modernize through upgrades, via sales and investment
in new stock)
- Partnerships
(some contemplating this, particularly in context of SHRP)
- Complementary
tools/policy approaches (e.g. enabling rules in District Plans around granny
flats)
- Financing
(most council’s have a self-funding policy, but rents are struggling to
fund depreciation, worries about financial sustainability of model)
- Rental
policies/alignment with central government (many councils supporting tenants
that would not qualify for IRRS, have variable rent structures for tenants
whose situations vary, frustrations with lack of access to IRRS and a desire
for closer alignment with central government, difficulties supporting with
complex needs).
Presentations from
Government agencies
Richard Braae,
Director of Social Housing, The Treasury outlined the
overall Government direction for social housing and the Social Housing Reform
Programme (SHRP).
The stated
objectives of the Government’s SHRP are to:
- Ensure
people who need housing support can get it and receive social services that
meet their needs.
- Ensure
social housing is the right design and size and is in the right places for
people who need it.
- Help
social housing tenants to independence, as appropriate.
- Encourage
and develop more diverse ownership of social housing, with more innovation and
responsiveness to tenants and communities.
- Increase
affordable housing supply, especially in Auckland.
The Government
cites a number of reasons for initiating their SHRP:
- The Government has
identified that 3,600 people assessed as in high need are waiting on the social
housing register[1]
and another 1,300 HNZ tenants have applied for a transfer.
- The Government has
identifed that one third of the $18.7 billion HNZ portfolio is in the
‘wrong place’ or of the ‘wrong type’ to meet this need.
For example, 30% of people waiting for social housing require a one-bedroom
place, but these make up only 9% of HNZ properties.
Figure 2: Social
housing type (source:
MSD)
- The Government
feels there are ‘poor incentives’ for people to move into housing
independence when they are ‘capable of making this transition’
and/or for providers to help tenants to move.
- Given the changing
housing needs of tenants – and the needs they often have beyond housing
itself – the Government feel there is a need to ‘find better
ways’ of meeting those needs.
The SHRP has a
number of elements. Amongst them are:
- A move away from a
focus on ‘state housing’ to ‘social housing’,
reflecting the fact that it may no longer be provided directly by
the state through Housing New Zealand (HNZ), but also by Community Housing
Providers (CHPs, either public or private).
- Growing the role of
CHPs in the provision of social housing (through transfers of social housing
units from HNZ, Treasury funding and MSD contracts to facilitate investment in
more social housing, and purchasing of tenancies via Income Related Rent
Subsidies).
- A restructure of
the role of various government agencies involved in the provision of social
housing, to separate out purchasing and assessment from provision, and
provision from regulation.
- Increased services
that support tenants’ ‘transition to independence’.
- Tenancy reviews,
resulting in some long term tenants moving into the private housing market.
Terminology:
- ‘Social
housing’ is the term now Government now uses to refer to approx. 62,000
tenancies provided via an Income Related Rent Subsidy (IRRS) from the Ministry
for Social Development (MSD). These 62,000 tenancies cater for the needs of
approx. 190,000 people. The tenants are very diverse. The main eligibility
criteria is that they are unlikely to maintain a tenancy in the private housing
market.
- ‘Income
Related Rent Subsidy’ is a Government subsidy (historically through HNZ,
now through MSD) which tops up eilligible tenants’ rent payments to
market rental rates, over and above the 25% of their income that tenants
contribute themselves.
How things have
changed:
- Previously, HNZ
assessed tenant eligibility, maintained the waiting list, and placed tenants in
its houses. This made the tenant eligible for the IRRS. Only tenants in HNZ
houses could get the IRRS.
- The
situation is now different:
Figure 3: Roles of
Government agencies and other players under the SHRP (source:
MSD)
1. The
Government sets the MSD budget for IRRS.
2. MSD
assess need and inform Housing NZ and registered CHPs of IRRS purchasing
intentions (where/how many social housing tenancies). They purchase social
housing tenancies in response, contracting HNZ and CHPs to provide the
tenancies via IRRS.
3. On the
tenant side, MSD assesses prospective tenant eligibility and maintain a Social
Housing Register of eligible prospective tenants. They also conduct reviews of social
housing tenancies, and provide services that ‘assist tenants’
transition to independence.’
4. The
Community Housing Regulatory Authority (CHRA, based within the Ministry of
Business, Innovation and Employment) registers CHPs and monitors their
performance as housing providers.
- At the
same time, HNZ houses (starting with an initial 1000-2000 in Invercargill and
Tauranga) are being sold through the Treasury in a competitive tender process,
to Community Housing Providers. There are also business-as-usual sales of HNZ
houses (approx. 500 per annum).
Looking to the future:
- The budget for IRRS
is currently anticipated to grow from $718 million in 2014/15 to $880 million
in 2017/18. It is unclear yet how many tenancies this will purchase.
The role of local
government in the new system:
- Under
the Government definition, councils are not considered to provide ‘social
housing’. This is because the legislation does not CHPs to be controlled
by councils, which in turn means council-owned housing is ineligible to
providing for tenancies that receive IRRS unless it is leased to a CHP
that is not council controlled (see next section).
- This
does not change the fact that there are approximately 12,000 housing units
currently provided by councils around the country, generally at below market
rates, to provide for people in need of low cost housing.
Kelvin Moffat from
the Ministry of Social Development and Fiona Fitzgerald, the
Manager of the Community Housing Regulatory Authority, spoke about the
roles of their respective agencies, and the process for registering and
operating as a CHP, with a focus on councils.
Figure 4: Roles of
MSD and the CHRA (source: CHRA)
Registering as a
CHP:
- To be
able to operate as a landlord for IRRS-eligible tenants on the MSD Social
Housing Register, a CHP must successfully apply with the CHRA to be a Class 1
Social Landlord.
- A CHP
applicant must not be a local authority; or a council-controlled organisation;
or a subsidiary of a local authority or council-controlled organisation unless
the subsidiary is operating at arm’s length from the local authority or
council-controlled organisation.
- Some
councils have decided to investigate (Auckland – 14,000 units) or
proceed with (Christchurch – 2,300 units) the arms-length model.
- Key to
this approach is that council-appointed representatives on the CHP board must
be in the minority, though asset ownership can stay with council
Figure 5:
Arms-length model for councils wishing to operate social housing under a CHP (source:
CHRA)
- Some
other councils (Whakatane, Hamilton) have simply sold their
housing to CHPs.
- Others
have retained both ownership and management in-house and are currently
providing low cost housing to a range of clients, albeit without access to IRRS
(e.g. Wellington).
Operating as a CHP:
- In tenancy-by-tenancy
contracts CHPs are only paid IRRS for social housing units that are tenanted
with someone from the Social Housing Register at any given time.
- Can in this way
lease any empty tenancies in a given social housing complex to a CHP, without compromising
the ability to maintain other units for longer term, non-IRRS tenants.
- MSD benchmarks
‘market rent’ against lower quartile market rent (adjusted for any
warm/safe/dry attributes typically not found in lower quartile housing e.g.
insulation, double glazing) – refer www.dbh.govt.nz/market-rent
- Longer-term
contracts with MSD are less flexible.
- The MSD IRRS
standard contract and provider guidelines available from MSD’s housing
assessment website – refer www.housing.msd.govt.nz/information-for-housing-providers/providers/index.html
Process for
receiving tenancies when operating as a CHP:
- CHP advises MSD of
a vacant property – enters property details in Business Online Services
(BOS)
- MSD checks demand
for the property on the social housing register and checks market rent
- MSD accepts
property – and generates a shortlist of 10 prospective households
(property/tenant characteristics matched) and sends to CHP (via BOS)
- CHP matches most
suitable tenant to property
- CHP and tenant sign
tenancy agreement and provider advises MSD of tenancy start date (via BOS)
- BOS calculates
provider’s fortnightly IRRS payment, tenant’s income-related rent
and the market rent of the property
- CHP reconciles the
report and invoices MSD for payment
Regulation of CHPs:
- The CHRA has a role
in assessing CHPs against performance standards both at the point of
registration, and subsequently in a regular annual monitoring capacity.
- CHRA Performance
Standards relate to Governance,
Management, Financial Viability, Tenancy Management and Property & Asset
Management.
- Financial Viability
must be proven based on rentals alone (must not be reliant on IRRS).
- Housing quality
standards for CHPs are no more rigorous than for private landlords at this
stage (just compliance with Residential Tenancy Act and the Building Code) but
CHPs will need to comply with the new rental housing standards currently under
development, when they are implemented.
- CHRA wants to see
clear separation of CHP functions from any additional social services offered
by a registered CHP.
Presentations from
other councils
Christchurch City
Council
originally decided to proceed on the understanding that all current tenants
would be able to stay on as IRRS-elligible clients. This is not the case. As a
result the first few years of the new organization will be very tight, with
expenditure limited to essential repairs and maintenance whilst they are trying
to stay afloat on existing rents only.
Auckland Council are
investigating a partnership approach following the development of a Housing
Action Plan which identifies the need to substantially grow supply of both
affordable and social housing in the city. They started with an open RFP
process based on an interactive dialogue process and have now progressed to an
EoI with The Selwyn Foundation.
Both Auckland and
Christchurch reiterated that exploring a partnership approach with the aim of
placing their housing in a CHP is neither a quick process nor a cheap one.
Christchurch’s representative urged those present to focus on the problem
that needs addressing in any given city, reiterating that there are other ways
to deliver those outcomes.
Rather than going
down the CHP route, Wellington City Council is currently work with MSD
to improve their up front assessment system, to ensure that prospective clients
are provided with information about the range of options available to them
(e.g. going on the Social Housing Register if they are IRRS-elligible).
Presentation from
Community Housing Aotearoa
Scott Figenshow,
CEO of Community Housing Aotearoa (the community housing
sector’s umbrella organization) outlined the proposed sector strategy.
Community Housing Aotearoa
represents not-for-profit organisations who deliver community housing
solutions, including local government[2].
The sector’s Vision is that
‘all New Zealanders are well housed’ recognising permanent, secure,
appropriate and safe housing as a basic human right. It has set a goal of
providing homes for 50,000 people by 2020, and three objectives:
- Positive
outcomes for communities, families and individuals: mixed tenure, mixed
income communities where community housing organisations work across the
housing continuum.
- Local
responses to delivery: an increase in local partnerships that meet
community needs among iwi, the private sector, service providers and community
housing organisations, each playing to their natural strengths.
- Long-term
certainty of the operating environment: including enabling status;
regulations; contracting; investing and purhcasing frameworks; tax and
charitable status; pipeline; funding tools; transaction structures;
development; capacity and capability; research and development.
CHA promotes a focus on a Housing
Continuum. CHA reports that community housing organisations deliver across the
full continuum, from emergency housing solutions to pathways towards home
ownership for low-income families.
Figure 6: The
Housing Continuum
(source: Community Housing Aotearoa)
CHA is of the view that the
diversity in the sector is a strength, as it provides people with housing
choice, and cites international evidence that it costs less to provide
“appropriate, secure housing and in-home support” than
“sporadic, ongoing emergency housing and institutional assistance”.
The CHA have adopted a work
programme based around five key areas of work:
- Housing
policy: leadership from a sector perspective
- Sector
expertise: assist the government to align its work programmes
- Strong
providers: build the capacity and capability of diverse housing providers
- Grow
supply: of social and affordable housing in mixed-tenure, mixed-income
communities. Deliver adequate housing that meets the seven UN standards
(Security of Tenure, Habitability, Accessibility, Affordability, Access to
Services, Location and Cultural Adequacy).
- Measure
acheivements: evaluate social outcomes and demonstrate our value
The Dunedin context
Council owns and
manages approx. 950 social housing units (non-IRRS-elligible). Housing New
Zealand also has a portfolio in Dunedin that sits at just under 1500 units.
These are ‘by default’ eligible to house IRRS-eligible residents.
There are two registered CHPs operating in Dunedin – Pact and Just
Housing Otepoti. There are also range of other community housing providers in
Dunedin that are not registered as CHPs (e.g. Abbeyfield) – the 2011
Dunedin Social Housing Needs Assessment identified 24 community housing
providers managing a total of 345 social housing units comprising more than 800
bed spaces. The social housing portfolio is heavily geared towards smaller
units, with over 70% of all units being two bedrooms or less. Only 6% of all
units contain four bedrooms or more.
In their 2013
Social Housing Purchasing Intentions, MSD signaled that it wished to purchase
an additional 30 social housing units in Dunedin.
The Council’s
2011 Housing Needs Assessment looked at housing affordability across the
housing continuum. It estimated
“there are about 3,500 renting households either facing serious housing
stress in the private market or already housed by the social housing sector.
It identified that market rent
levels in Dunedin are still low by main centre standards, but have moved up
over the past decade to a point where the City is no longer the “low rent
capital” of New Zealand. The largest rental price increases have occurred
in traditional low-cost rental areas where the emerging intermediate housing
market is competing with traditional low-income renters for available stock.
This is particularly the case for smaller one and two-bedroom rental stock, for
which weekly rentals have increased by more than 100% in some areas over the
past five years. “
It further
established that “Dunedin’s Social Housing asset pool currently
comprises almost 2,800 housing units owned by 26 housing providers. The sector
currently houses about 80% of those broadly identified as being social housing
consumers - the balance being housed in private sector housing either at market
rates or via informal subsidy arrangements.”
“Although
details of total social housing demand is sketchy, our analysis suggests that
social housing providers have managed to absorb most cases of serious housing
need in the city. As a broad estimate of unmet demand, there are up to 200
individuals and households on various wait lists who could be construed as
having serious and immediate housing need. Low income single people and sole
parent families are most at risk, in particular those with support housing
needs or at the severe housing stress end of the affordability spectrum.”
The Assessment concluded that
“our overall impression is that the Dunedin social housing sector lacks
role clarity. HNZC and City Council, for instance, are both significant
providers of housing for older people, but have yet to coordinate their waiting
lists.”
The Assessment sought to identify
the size of future demand:
Figure 7: Unmet and
future demand for social housing in Dunedin (source: Dunedin
Social Housing Needs Assessment 2011)
- “About
1,000 new “social housing solutions” will be required to meet the
needs of older social housing consumers, including a significant increase
in independent living units, and supported housing for 80+ households.
- The
overall quantum of working age households needing social housing assistance is
likely to decline, although there will be an increase in sole parent households
(2-300) and single people (500+) seeking assistance. This supports a case for
reconfiguring the existing portfolio.
- Population
and benefit trends suggest that Dunedin is unlikely to face a significant surge
in demand for health and disability-related housing. Third sector providers
have, however, identified a number areas of unmet demand, and some provision
should be made for population-based growth.
- Emergency/transitional
housing in Dunedin is currently restricted to ex-offender housing, refuges and
the night shelter. Sector respondents believe that additional provision is
immediately required for young people at risk, young women and children with
addiction and other complex needs and homeless women. Longer term, more
transitional housing will be required to cater for New Zealand’s growing
prison population.”
The full Social
Housing Needs Assessment, which includes a suggested cross-sector approach to
meeting the need for growth, is at http://www.dunedin.govt.nz/__data/assets/pdf_file/0018/251541/Social-Housing-Needs-Assessment-Dunedin-CC-Jan-2012v2.pdf
Key questions for
the Council:
Given the
regulatory and social housing provision landscape described above, what needs
to be done to satisfactorily meet Dunedin's future social housing needs?
What role should
the Council play to
- ensure
current needs across the housing continuum are being met?
- maximise
the chance of growing demand being met?
Under
business-as-usual, is there stronger collaboration that could happen between
Council and MSD in the first instance, and with all sector providers more
generally, to ensure that people in need are being connected with options that
will best meet their needs?
Is there any merit
in exploring options to register Council’s social housing under a CHP, or
will this just risk freeing up Housing New Zealand stock for sale and achieving
overall net reduction in social housing provision in Dunedin across the
continuum?
Are the figures in
the 2011 Social Housing Needs Assessment still likely to be accurate? Is there
merit in updating the Assessment?
What might the
city’s new status as a Refugee Resettlement location mean for demand for
Housing New Zealand housing stock?
What does best
practice social housing provision look like, and how can we ensure any new
Council units are in line with this?
