Social housing assistance

Updated: 30 Aug 2011

Housing assistance growth slowing

Government expenditure was $294.4 million on Accommodation Supplements (AS)[1]  and $142.2 million on Income-Related Rent Subsidies (IRR)[2] in the June 2011 quarter.  AS and IRR are the two primary ways[3]  that the government assists low-income families with obtaining affordable housing.   

Total AS and IRR was $436.6 million in the June 2011 quarter, a decrease of 0.6% from the June quarter. The annual increase in total housing assistance was 2.8% in the year to March 2011. The rate of annual increase has been decreasing since September 2009 when it peaked at 14.8%. 

In general, IRR expenditure is more stable than AS (Figure 14). This is because IRR can be provided only to tenants living in Housing New Zealand Corporation (HNZC) housing, whereas anyone meeting the income and housing cost criteria can receive an AS. 

There were 308,551 recipients of  Accommodation Subsidies and 61,397 Income-Related Rent tenancies in the March 2011 quarter. 

^{_{Source: Department of Building and Housing and Ministry of Social Development}}

The level of government housing assistance as a percentage of total housing contribution to GDP  [4]  was 7.4% in the March 2011 quarter, down from 7.6% in the December 2010 quarter(Figure 15).  

 

^{_{Source: Department of Building and Housing, Housing New Zealand Corporation, Ministry of Social Development and Statistics New Zealand}}

 

Waiting times for HNZC tenancies still rising

Waiting list priority for Housing New Zealand Corporation (HNZC) housing is determined by several factors,[5] and applicants are divided into four groups that reflect different levels of need. 

The households on the waiting list for HNZC housing in June 2011 for:

• 'A' priority [6] was 402, up from 366 in March 2011
• 'B' priority [7] was 3,352, down from 3,588 in March 2011 

The size of the 'B' priority waiting list began to trend downward in 2010 after increasing from 2007 to 2009 (Figure 17).  A downward trend can reflect either applicants having more success finding dwellings or fewer households choosing to apply and stay on the waiting list (more below). 

_{^{Source: Housing New Zealand Corporation}}

The average number of days an applicant spent on the waiting in June 2011 for:

• 'A' priority was 19, down from 30 in March 2011
• 'B' priority was 96, u from 120 in March 2011 

Despite a rise in the number of households on the 'A' priority, average waiting list times have steadily fallen since December 2010 to lowest level since November 2005.

Average time on the 'B' priority waiting has also declined following persistant increases. However, some of this decline may be a seasonal effect, as June quarter declinles have been typical in recent years (Figure 17).

_{^{Source: Housing New Zealand Corporation}}

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[1] 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.

[2] 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 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.

[3] 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 IRRS and the AS, and focus on homeownership rather than rent relief.

[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.