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Social housing assistance

  • Government contribution to housing: Updated 29 January 2010
  • Income-Related Rent beneficiaries: Updated 29 January 2010
  • Accommodation Supplement beneficiaries: Updated 29 January 2010
  • HNZC housing waiting list: Updated 29 January 2010

Government housing assistance grew in late 2009, in terms of both expenditure and number of recipients. Pressure is mounting to meet the increase in demand for social housing.

The two main ways [1] that the government assists low-income families into affordable housing are the Accommodation Supplement [2](AS) and Income-Related Rents [3] (IRR). At the end of December 2009, there were 322,490 AS recipients and 61,220 IRR tenants.

Figure 14 shows government expenditure on social housing assistance as a percentage of total housing sector expenditure [4]from the March 2005 quarter to the September 2009 quarter.

The level of total government housing assistance as a percentage of total housing contribution to GDP increased to 7.3 percent in the September 2009 quarter from 6.9 percent in the June 2009 quarter, and 6.6 percent in the March 2009 quarter. IRR assistance remained steady at 2.3 percent of total housing contribution to GDP. AS rose for the fifth consecutive quarter, increasing from 4.6 percent in June 2009 to 4.9 percent in September 2009.

Figure 14: Government housing assistance as a percentage of the contribution of housing to gross domestic product  (to September 2009)

Figure 14: Government housing assistance as a percentage of the contribution of housing to gross domestic product (to September 2009).

Source: Department of Building and Housing, Housing New Zealand Corporation, Ministry of Social Development and Statistics New Zealand

Total government housing assistance (as measured by IRR and AS) increased from $413.4 million in the September 2009 quarter to $423.4 million in the December 2009 quarter.  Total government housing assistance in the Decmeber 2009 quarter was 14.6 percent more than the $369.6 million provided in the December 2008 quarter.

Over the December 2009 quarter, the proportion of IRR tenants receiving the Unemployment Benefit increased slightly from 7.6 percent to 7.8 percent. This was the only change in the composition of benefits for IRR tenants, as shown in Figure 15.

Figure 15: Parent benefits received by income-related rent tenants (to December 2009)

Figure 15: Parent benefits received by income-related rent tenants (to December 2009).

Source: Housing New Zealand Corporation

Figure 16 shows that AS recipients who also receive the Unemployment Benefit continue to increase. As a proportion of total AS recipients, 19.2 percent received the Unemployment Benefit in December 2009, compared with 17.1 percent in the September 2009 quarter, and 11.4 percent in December 2008.

Figure 16: Other benefits received by accommodation supplement recipients (to December 2009)

Figure 16: Other benefits received by accommodation supplement recipients (to December 2009).

Source: Ministry of Social Development

Waiting list priority for Housing New Zealand Corporation housing is determined by several factors,[5] and applicants are divided into four groups that reflect different levels of need. The groupings are referred to as:

  • A priority[6]
  • B priority[7]
  • C and D priority[8].

As shown in Figure 17[9] , the combined A and B priority waiting lists increased 11.5 percent from 4,155 applicants in December 2008 to 4,633 in December 2009. Priority B applicants increased by 9.0 percent and Priority A applicants increased by 56.1 percent over the same period.

Figure 17: Waiting List for Housing New Zealand Corp Dwellings – Number of Households A and B Priority (to December 2009)

Figure 17: Waiting List for Housing New Zealand Corp Dwellings – Number of Households A and B Priority (to December 2009).

Source: Housing New Zealand Corporation

As shown in Figure 18, the average waiting time for Priority B applicants increased markedly over the latter half of 2009, from 81 days in September 2009 to 94 days in December 2009. Aside from minor monthly volatility, the average waiting time for Priority A applicants remains steady at 31 days for December 2009, compared with the cyclical peak of 44 days in December 2008. Taken together, the data suggests that Housing New Zealand Corporation has been able to meet the increase in demand from Priority A applicants, but less so for Priority B perhaps due to the larger number of applicants in the latter category.

Figure 18: Waiting List for Housing New Zealand Corp Dwellings – Average Waiting Time (to December 2009)

Figure 18: Waiting List for Housing New Zealand Corp Dwellings – Average Waiting Time (to December 2009).

Source: Housing New Zealand Corporation

 [1] Note that a variety of homeownership assistance programmes such as Welcome Home Loans are not considered as part of these statistics, because they are relatively small compared with the IRR and the AS, and focus on homeownership rather than rent relief.

[2] The Accommodation Supplement is available through the Ministry of Social Development for people in private accommodation (i.e. not in social housing) who meet the income criteria. Recipients can then use the AS to offset some of the cost of their board, rent or mortgage payment.

[3] The Income-Related Rental Subsidy is paid to Housing New Zealand Corporation by the Government to subsidise the rent of Housing New Zealand Corporation tenants on low incomes (that is below the single living-alone rate of New Zealand Superannuation, after tax, for single tenants and below the married couple rate of New Zealand Superannuation, after tax, for all other tenants). Tenants in Housing New Zealand Corporation homes are not required to pay more than 25 percent of their income in rent. The marginal proportion rises to 50 percent for incremental amounts beyond the relevant rate of New Zealand Superannuation. The IRR subsidy compensates Housing New Zealand Corporation for the difference in the rent paid and the market rent on the property. As such, IRR is an indirect subsidy of social housing.

[4] Gross Domestic Product: Household consumption expenditure by purpose in actual current prices – Housing (series SNCQ.S2NP30CZE). Source: Statistics New Zealand.

[5] The factors are used to determine housing needs are: affordability; adequacy; suitability; accessibility; and sustainability.

[6] ‘A’ priority households have severe and persistent housing needs that must be addressed immediately. The household’s wellbeing is severely affected or seriously at risk due to housing circumstances that are unsuitable, inadequate or unsustainable, and there is an immediate need for action. The household is unable to access or afford suitable, adequate and sustainable housing without state intervention.

[7] ‘B’ priority households have a significant and persistent housing need. The household’s wellbeing is affected in a significant and persistent way by housing circumstances that are unsuitable, inadequate or unsustainable. The household is unlikely, in the near future, to be able to access or afford suitable, adequate and sustainable housing without state intervention.

[8] ‘C’ and ‘D’ priority waiting lists are for households with low to moderate housing need.

[9] Our data source for the Housing New Zealand Corporation waiting list has changed this quarter to provide more frequent and more robust data. Figures 16 and 17 may therefore not be comparable with the equivalent figures in previous trends reports.