The community housing sector wants an increase in funding for schemes that are proven to help families with less resources buy their own homes | Content Partnership
Home ownership has always been considered King in Aotearoa New Zealand for very good financial, cultural and legal reasons.
But the current housing system is at a point where home ownership is not about “realising the dream”, it is more like a waking nightmare as opportunities slip ever further out of reach, while we create a property-owning asset class and a have-not majority in severe rental stress.
As the headwinds of spiralling costs and rising interest rates hit many current and aspiring home owners, it may seem the home ownership dream is dead.
But not all is lost. For years, many housing experts – including those with institutional memories of 30 years or more in the community housing sector – have called for an increase in the funding and support for progressive home ownership.
Progressive home ownership is all about assisting people into home ownership over time through supported financing and tailored ongoing support. It is a proven model that the community housing sector has been delivering since the early 1990s and an absolutely critical piece of our housing puzzle.
In this model, people are more than a number – they are future potential – and the investment in them and the home they get to call theirs is one for the long term.
Homes for essential workers
One of the key ways in which progressive home ownership supports and enables communities is by meeting the housing needs of essential workers, who are often woefully underpaid relative to house prices.
Queenstown has suffered the dubious honour of being ahead of the curve on the housing crisis, with a crunch period taking place about six years ago when huge numbers of essential workers simply could not find a roof to put over their heads, including during the particularly cold winter and particularly high prices of 2015/2016.
The Queenstown Lakes Community Housing Trust, a leading community housing provider, has developed an innovative ‘leasehold’ model to respond to this ‘missing middle’ market for essential workers, which is now being rolled out elsewhere in the country, including by Bridge Housing Trust in Hamilton.
The model separates out the value of the land from the home. Any land costs, such as civil works, are covered by the Trust, keeping the buy out price more affordable for the home owners to be. The quid pro quo of this is that the Trust retains the land, with the home owners leasing the land on which their new home sits for a tenure of 100 years. The Trust has committed to the Council to hold that land in perpetuity, meaning that while the household may not get windfall gains should they decide to sell, they have a secure, affordable home of their own in the community to which they offer so much.
Beyond the mechanics of being able to afford the home, progressive home ownership recognises that being human often means that there are ups and downs in life. Built into the approach of the community housing sector is the commitment to helping people succeed, even if they don’t necessarily ‘tick all the boxes’ right out of the gates.
Funding to support scale
Despite seeing the power and promise inherent in the progressive home ownership model, Queenstown Lakes Housing Trust and others such as Habitat for Humanity New Zealand, the Salvation and Army and the NZ Housing Foundation recognised that growing it required funding. The ‘Kiwibuy’ campaign they launched was successful in achieving the launch of the Progressive Home Ownership fund, a $400 million dollar fund managed by the Ministry of Housing and Urban Development.
The Fund is designed to complement Kāinga Ora’s First Home Partner scheme and provides up to 50 percent capital, paid off interest free by the housing provider over 15 years, which effectively means that providers can support famiies who are able to service a $400,000 mortgage into a house with a market value of $800,000. There is also a dedicated Māori pathway, Te Au Taketake that is specifically set up to support tangata whenua led approaches to progressive home ownership.
Partnering to create pathways
The fund has experienced ups and downs, but it is clear that it has been a key catalyst for growing progressive home ownership as an option. It is also an important vehicle for growing the community housing sector and its ability to deliver housing solutions tailored to individuals, families and communities.
What is also clear from the experience of the fund is that creating home ownership opportunities cannot be done in isolation. The housing providers need the capital injection of the Fund to make the development finance stack up. We believe the Government needs community housing providers with specialist knowledge of the particular needs of their communities to ensure it is reaching the right people. Housing providers need each other to learn and evolve innovative models and, most importantly, the people buying the homes thrive when they have the housing provider walking alongside them providing that critical trust and opportunity to realise their dreams.
How do we embed these relationships and the traction that has been gained so far?
First, as the convenor the Kiwibuy campaign, we commit to knowledge sharing and support for organisations exploring how they might deliver progressive home ownership. The leading providers have learned a lot and want to grow the opportunity for others.
We also need policy clarity that the community housing sector has a really important role to play in creating and delivering solutions to our housing crisis.
Part of that policy clarity is surety that the fund will be extended beyond its 2024 deadline.
And we need the likes of the banks to consider their role in providing lower cost finance and other supports for progressive home ownership as a model. How are they as systems actors leaning into their role in stimulating supply side options that are outside of the residential box and for purpose over profit?
As Penina Trust CEO Roine Lealaiauloto said when her organisation was recently confirmed as the first Pasifika progressive home ownership provider:
“If we want to make a real positive change in our communities to address poverty, fear of displacement, and ensure our Pacific children don't end up at 10 different schools before they get to college, then we need to work together to build stability through a pathway to homeownership.”
This is part of a paid content series for Newsroom for Community Housing Aotearoa
