Declining egalitarianism and the battle for affordable housing in New Zealand Nina Saville-Smith & Kay Saville-Smith Declining egalitarianism and the battle for affordable housing in New Zealand Nina Saville-Smith Centre for Research Evaluation & Social Assessment, Wellington, New Zealand [email protected] K. J. Saville-Smith Centre for Research Evaluation & Social Assessment, Wellington, New Zealand, [email protected] Paper Presented to European Network of Housing Researchers Conference, Uppsala, Sweden 27-29 June 2018 Abstract This paper examines public expressions of exclusion and exclusivity in response to the proposed development of Special Housing Areas (SHAs) in the Western Bay of Plenty sub-region through the thematic analysis of 603 submissions and a review of New Zealand and international literature. It explores a shift in New Zealand cultural values, which increasingly prioritises individual gain and aesthetic preference over policies that support those living in housing insecurity, identifies groups subject to discrimination and exclusion and attitudes to exclusion in the context of national identity and egalitarianism. Introduction Conceptions of New Zealand as a classless utopia, defined by egalitarianism have been central to formulating a mainstream cultural identity in New Zealand and these values are still held up as distinguishing national characteristics in which many New Zealanders firmly believe (Belich & Weaver, 2008). A core facet of this notion of egalitarianism has been access to housing, including the attainment of homeownership. This aspiration was, for many years and for most people achieved. Jackson’s cohort analysis of homeownership in New Zealand shows that by the time those born in 1927-1932 reached 65 years an excess of 87 percent of that cohort were living in owner occupied dwellings (Jackson, 2017). However, over the last thirty years, access to adequate and affordable housing has become an ephemeral goal both in homeownership and increasingly in the rental market. An estimated 574,000 households were renting (Johnson, Howden-Chapman & Eaqub, 2018) and an estimated one in one hundred people were homeless in 2017 (Groot, Vandenburg, & Hodgetts, 2017). Along with the falling rate of homeownership, New Zealand has become an increasingly unequal society, now with one of the highest rates of inequality in the OECD (Arrowsmith et al., 2017). There is considerable resistance to affordable housing developments evident in the take up of a moral discourse by New Zealanders which maintains “a prevailing view that their country is an idyllic paradise apart from the rest of the world’s ills that, if anything, is too generous to its less advantaged” (Marcetic, 2017). This paper explores changing attitudes to and support for inequality expressed in the current housing context. It is structured as follows. It begins with an overview of housing and the welfare state in New Zealand. This is followed by a brief comment on housing inequality in New Zealand. The final section reviews submissions to the proposed development of Special Housing Areas in the Western Bay of Plenty. Workshop 22. Residential Environments and People Housing, the Welfare State and Inequality Housing and government investment in housing provision has historically functioned as a pathway towards a more equitable society. Certainly, access to decent housing was part of a package that attracted new settlers to New Zealand in the nineteenth century. Some came to participate in building a new society, others were trying to escape poor conditions and limited social mobility in their home- countries. New Zealand offered the prospect of new lives and new possibilities. Demands for state intervention from workers and labour groups in housing provision were stimulated by health crises and, in combination with a bubonic plague scare, were a catalyst for the introduction of the Workers’ Dwelling Act (1905). The Act sought to reduce the impacts that rising rents had on inflation and economic well-being (Schrader, 2007) and provide urban workers with quality housing that would remove them from the province of “city slums and grasping landlords” (Ministry for Culture and Heritage, 2014). The scheme had limited success as rents remained too high and the dwellings too far from urban centres for many prospective tenants (Housing New Zealand Corporation, 2017). The Advances for Workers Act passed in 1906, which offered low cost state credit for eligible workers to build their own homes had a much higher level of success, with 1296 loans granted over a period of four years (Schrader, 2007). Following the success of this scheme the focus shifted from rental provision to supporting and encouraging the uptake of homeownership and the provision of loans and subsidies for construction became the main mechanisms utilised by government to improve housing. In 1912 the remains of the first state housing experiment were sold off by the conservative reform government. Intervention centred around lending, with workers able to access up to 95 percent of the cost of a home throughout the twenties (Housing New Zealand Corporation, 2017). Following the economic and societal upheaval of the Great Depression, a comprehensive state housing programme was launched by the Labour government in 1936 and was followed by other significant welfare reforms under the Social Security Act of 1938. Some argue that those reforms “were as much about insurance for the middle classes” as they were “about addressing poverty” (St John, 2001:5), however they led to substantial improvements for a considerable number of New Zealanders and heralded a move toward collective responsibility and rights of citizenship (Johnson, 2015). Thousands of state homes were built for lifetime rent and “a new concept was introduced to the country…that every citizen had a right to a reasonable standard of living and that it was a community responsibility to ensure that its members were safeguarded against the economic ills from which they could not protect themselves” (Johnson & Carter, 2015:8). The “abstract principles of all citizens being entitled to decent housing” (Groot & Mace, 2016:6) was established. By the end of 1939 the number of houses being constructed rose to around 70 per week (Schrader, 2007) and by 1940 it was estimated that around two thirds of New Zealand homes had been built by the state (Yarwood, 2013). However, even at this rate construction was unable to keep pace with demand and virtually ceased as New Zealand entered the second world war. Government efforts intensified in the wake of the war. A group building scheme was launched, with government underwriting of homes built to specifications (Housing New Zealand Corporation, 2017). In 1950 the National government began an initiative which enabled state housing tenants to purchase their homes with a five percent deposit and low interest rates over a maximum term of forty years (Ministry for Culture and Heritage, 2014). By 1957 an estimated 30 percent of state housing stock, around 13,300 homes, had been sold (Schrader, 2007). In addition, National raised rents for new tenants, to reduce the advantage over private rentals and introduced an income bar to ensure state housing was reserved for the very poor. In effect, “state housing became a residual provision for those locked out of homeownership” rather than the envisioned ‘tenure of choice’ (Ministry for Culture and Heritage, 2014). After their 1957 election, the Labour government acted against further sales of state homes, Workshop 22. Residential Environments and People setting “the general pattern for half a century, with Labour-led governments restricting sales and National-led governments encouraging them” (Schrader, 2007:18). The 1984 election saw a Labour-led de-regulation of New Zealand’s highly centralised economy and embarked upon a neo-liberal agenda, cutting the top rates of income tax, reducing tax on company profits and introducing a means tested family incomes scheme to “ensure a significant margin between the incomes of families working and those on benefits” (Hope & Scott, 2017:51). In 1991 the National government introduced full-market rents for state housing tenants, replaced income related rents and housing benefits with an untied Accommodation Supplement (Rea & Thompson ,2017) to assist people with unaffordable housing. The Accommodation Supplement was designed to be tenure neutral but was accessed primarily by those in rental accommodation. Its introduction was accompanied by a cut in welfare payments (other than superannuation) and the supplement itself was designed to only partially address unaffordable housing costs. Government support for homeownership also fell away. By the late 1980s/early 1990s almost 75 percent of households owned the dwelling in which they lived (Law & Meehan, 2013) and in some areas the proportion was even higher. The movement away from a mixed policy of housing assistance both in the rental and homeownership sectors has seen a significant decline in homeownership (Figure 1). It also saw considerable reductions in housing affordability and increases in housing stress. Figure 1 Dwellings in Owner Occupation 1986-2013 (Jackson, 2017). Median house prices rose over 50 percent between 2004 and 2008, conferring significant gains on around half the adult population (Johnson, 2015), while the proportion of individuals able to afford homeownership declined around 20 percent (Law and Meehan, 2013). On a year on year basis to March 2018 median national house prices increased by $35,000 contributing to a 4.4 percent decline in affordability (Squires & Mee Chin, 2018). As the homeownership rate declines, the number of households dependent on the private rental sector has increased. Over the ten years to 2017 the number of households in private rentals grew by 126,000 contributing to an estimated 574,000 to 581,000 private tenant households (Johnson, Howden-Chapman and Eaqub, 2018). Competition for private rentals is fierce and rents have been rising at a faster rate than wages (Johnson, Howden- Chapman & Eaqub, 2018). The median national rent increased 5.6 percent over the last year to $475 a Workshop 22.