Social housing: where have we come from? Ben Schrader Partnerships for Social and Affordable Housing 28 June 2012 Three main ideas 1) Private enterprise has been a deficient provider of both affordable and good quality housing, necessitating 2) The intervention of governments in the housing market to increase supply, and 3) Left leaning governments have focused on direct assistance (social housing); right leaning governments have concentrated on indirect assistance (housing subsidies) Colonial experience • Laissez-faire political economy meant housing provision left to private enterprise • Housing market lightly regulated • Election of 1890 Liberal govt led to more interventionist stance in housing market • Reformers claimed market failing to deliver affordable & good quality housing • Image: 19 th C workers’ cottages in Te Aro, circa 1930s First state houses • 1905 Workers’ Dwelling Act led to erection of first state houses in Petone & other cities • Distance from workplaces & high rents (due to use of high quality materials) meant scheme unsuccessful • 1912 (conservative) Reform govt sold workers’ dwellings • Image: Workers’ dwellings in Patrick St, Petone, circa 1907 Government housing assistance • Two main forms of government housing assistance: 1) direct assistance (state rental housing) 2) indirect assistance (state funding of private housing) • 1920s indirect assistance prevailed, with 95% state loans for new suburban houses • 1930s Depression burst housing bubble & led to housing shortage 1930s/40s state housing • First Labour govt blamed shortage on market failure and initiated state rental housing scheme to: 1) provide jobs 2) raise housing standards 3) give tenants security of tenure • Aimed at low- to middle-class families • By 1939 state house waiting list stood at 10,000 • After WW2 whole state housing suburbs built • Image: State housing in Naenae 1940s New directions 1950s • By late 1940s state housing backlash among wider public • Holland National govt rejected state housing as mainstream form of tenure. Became a residual provision for the poor • Promoted property owning democracy & encouraged state housing tenants to buy their houses • Nash Labour govt encouraged this – family benefit capitalisation Mass housing suburbs 1960s • Increasing housing demand led to creation of mass state housing suburbs in Porirua & South Auckland • Changed public perception of state housing from positive to negative • By 1970s housing shortage solved • Image: Eastern Porirua,circa 1960 Market rents • 1980s Lange Labour govt stopped family capitalisation scheme & introduced market rents for ‘wealthy’ state housing tenants • 1990s Bolger National govt extended market rents to all state housing tenants • Introduced ‘fairer’ Accommodation Supplement for all low-income households • Market rents unaffordable for many tenants, leading to household deprivation among some Early 2000s • Clarke Labour-led govt stopped state house sales, reintroduced income-related rents and realised plans to construct further state houses Council housing • Early 1900s many municipalities became more interventionist in city economies, including housing provision • First council houses built in Auckland in 1916 • In 1938 Christchurch pioneered new direction with pensioner housing • 1970s saw councils house people most in need • Image: First Akld houses (1916) & first Chch pensioner housing (1938) Recent developments • New housing shortage led to skyrocketing house prices and lowered affordability for first- time homebuyers • Clarke govt encouraged growth of community housing sector • In 2010 Key govt announced state housing available only to those in greatest need. • Greater reliance to be placed on community sector for social housing provision • Image: Ali Isse outside Wellington Housing Trust property in Newtown Conclusion 1) Private enterprise has been a deficient provider of both affordable and good quality housing, necessitating 2) The intervention of governments in the housing market to increase supply, and 3) Left leaning governments have focused on direct assistance (social housing); right leaning governments have concentrated on indirect assistance (housing subsidies) 4) Much future social housing provision to come from community housing sector Sources: Ben Schrader, We Call it Home: A History of State Housing in New Zealand , Auckland, 2005 Ben Schrader, ‘Housing and Government’, Te Ara/New Zealand Encyclopedia, http://www.teara.govt.nz/en/housing-and-government.