Social versus state housing

Alan Johnson

‘It’s why we talk about “social housing” rather than “state housing”, because you no longer have to live in a state house to get a high level of government housing support.

It’s an important change.’

– John Key, State of the nation speech to Auckland Rotary Club, January 2015.




There’s a quiet revolution in the provision of state housing and the language used – state housing or social housing – is a clue to the policy shift.

The English housing advocacy organisation Shelter defines social housing as follows:

Social housing is let at low rents on a secure basis to those who are most in need or struggling with their housing costs. Normally councils and not-for-profit organisations (such as housing associations) are the ones to provide social housing.

As a definition it points to several important features: affordable rents, secure tenure and allocation to those most in need. While this definition refers to ownership of social housing by a public entity such as local councils or not-for-profit organisations, it does not do so exclusively.

There is an important question of ownership which is at the heart of the disputes around the use of term social housing in lieu of state housing. Strictly speaking those who advocate for state housing are of course advocating for housing which is owned and probably operated by a state agency – as in Housing New Zealand or a government housing department as proposed by the Labour Party. On the other hand, those advocating for social housing are less interested in who owns or operates the housing and more interested in who gains access to the housing and under what circumstances.

In his state of the nation speech 2015, Prime Minister John Key said, ‘Community housing providers already own around 5,000 houses and some are long established. There’s a lot of potential there. Locally-based providers can be closer and more responsive to their community. Providers that focus on particular types of tenants can integrate housing with the other services they provide, like mental health, disability or budgeting support. Non-government housing providers can also bring in new approaches and access new sources of funding.’

While social housing outside of the State has been presented in rosy terms as being locally based and community centred, the government’s move towards the term and the policy of social housing is effectively privatisation and is masking a down-grading of state housing. The real agenda was at least partly one of privatising social housing though state house sales and the payment of on-going rent subsidies to the new owners for some indeterminate time into the future.

The genesis of this government’s social housing reform agenda can be traced back to the Housing Shareholders’ Advisory Group report of 2010. In its report Home and Housed, The Advisory Group recommended that the Government move away from a reliance on Housing New Zealand as the sole provider of social housing, that greater attention be paid to developing ‘third party participation’ in the provision of social housing, and that the process of allocating social housing be given to Ministry of Social Development (pp. 5-7). The report was vague about the role of the private sector, but of course the private sector is within the NGO sphere. The government is comfortable with the private sector running social housing; Treasury announced that one of the two short-listed bidders for the sale of 1124 state houses in Tauranga was a private British-Australian consortium. The other bidder involved New Zealand-based private investors.

Since 2011 the National Government has been running a social housing reform programme. This programme initially emerged in two tranches – the first during late 2011 and early 2012 when announcements were made on the way Housing New Zealand would operate and the second at the time of the 2013 Budget when changes to how housing needs would be assessed and an allocation of a small budget for extending income related rents were announced. To some extent these changes were captured in 2013 amendments to the Housing Restructuring and Tenancy Matters Act 1992.

Following the 2014 General Election the social housing reform agenda became subtly more radical. While Government representations of these changes offer a benign picture of helping those most in need, of extending the coverage of income related rent subsidies and supporting people to ‘housing independence’ the reality is that it is planning to sell-off around 5000 state units in a so-called transfer process[1]. Plans to sell off all the state housing in Tauranga (1124 units) and Invercargill (348 units) were announced in March 2016 and a further announcement of a proposal to sell off 250 units in Horowhenua was announced in May 2016. Against these sell-offs the Government has been actively seeking third party interest in providing additional social housing units in Auckland[2]. Overall these changes have created an expectation that by 2017 the Crown would own or manage 60,000 social housing units through Housing New Zealand and have contracted a further 5000 through Ministry of Social Development income related contracts with third party providers.

Per capita, the state housing stock is at the lowest levels since 1949. There are around 84,000 to 85,000 state and other social housing units in New Zealand. This number appears to be declining as the Government continues to sell-off or demolish its stock of state housing. Local councils also appear to be gradually divesting their stock of housing which is generally directed toward elderly people. Ironically this divestment is happening at a time when more people are reaching retirement age as tenants who need affordable and secure rental housing.

Not explicitly stated in these policy changes was an expectation that the Government would receive higher dividends from Housing New Zealand. Between 2010 and 2015 these dividends averaged $91 million annually compared with an annual average dividend of $45 million paid out during the previous six years of Labour Party led governments.

The community housing sector, represented by a peak body known as Community Housing Aotearoa (CHA), is overwhelmingly funded by the Crown[3] and the organisation has actively advocated for the transfer of state housing to its member organisations. Clearly, the community housing sector is a beneficiary in this policy shift and so its advocacy that the sector be grown is self-interested. Aligning itself with the government’s policy undermines the legitimacy of the group as a genuinely independent community-focused housing representative.

The Government’s agenda of reducing the numbers of state houses through sell-offs and demolitions is now apparent. This agenda has perhaps been deliberately obscured by shifting the focus from state housing to social housing and by labelling this sell-off as transfers rather than privatisations. There is still however an important distinction between state-owned rental housing and the broader idea of social housing of which state housing is part. This distinction risks being lost in ideological rhetoric – on the left by an insistence that social housing needs to be publicly owned and on the right by pretending that private-profit oriented ownership of social housing is unproblematic. In the middle of this spectrum lies the not-for-profit or community housing sector which remains puny and under-developed and has not acquitted itself well recently with its complicity with the Government’s social housing reform agenda.





[1] Treasury in advice to the Cabinet’s Social Policy Committee in 2015 noted a previous cabinet decision of December 2014 thus:

‘Cabinet also agreed in December 2014, as “bottom lines” for the proposed transfer of state

houses, that over the next few years:

a   Housing New Zealand and community housing providers will collectively provide more
social housing places in New Zealand than there are now – particularly in Auckland and


b   HNZC will continue to be by far the biggest owner of social housing in New Zealand and
by 2017 we envisage it will provide around 60,000 properties;

c   properties will only be sold if this results in better services for tenants and fair and
reasonable value for taxpayers;

d   tenants in properties that are sold will continue to be housed for the duration of their
need; and,

e   the Government will spend more on IRRS and ensure that HNZC has enough capital to
build new social housing and redevelop its existing properties

[2] Ibid.

[3] Community Housing Aotearoa’s 2013/14 annual report showed a total revenue of $291,000 of which 78% or $226,000 was from Government grants. The organisation’s 2015/16 accounts provides no details of the source of its revenues except that is $253,876 was from grants and a fewer $286,148 from ‘other income’. Government budgets for 2015/16 show a budget grant of $500,000 to CHA in 2015/16 rising to $700,000 in 2017/18.  See The Estimates of Appropriations 2015/16 Social Development and Housing Sector b.5 Vol10 p.38.

Categories: Housing
Alan Johnson
About the author

Alan Johnson

Co-convenor - Child Poverty Action Group
Alan Johnson is the Co-convenor of the Child Poverty Action Group. He is the social policy analyst for the Salvation Army’s Social Policy and Parliamentary Unit and author of A mountain All Can Climb which is the Salvation Army’s State of the Nation report. Alan is a community activist in South Auckland where he is active as an administrator in local sports clubs and as a school trustee. He is also a trustee of the Auckland Community Housing Trust and Chairman of Community Housing Aotearoa. Alan has an academic background in town planning and economics and has been involved in Auckland local government for over 20 years both as a politician and bureaucrat.