Social housing assistance

Updated: 16 October 2009

Government housing assistance remained constant, numbers of applicants for government housing grew, and the time to house people on the lists increased

The two main ways¹ that the government assists low-income families into affordable housing are the Accommodation Supplement² (AS) and Income-Related Rents³ (IRR). At the end of September 2009, there were 309,932 AS recipients and 61,111 IRR tenants.

Figure 14 shows government expenditure⁴ on social housing assistance as a percentage of total housing sector expenditure from the September 2005 quarter to the March 2009 quarter.

The level of total government housing assistance as a percentage of total housing contribution to GDP remained unchanged at 7.6 percent between the December 2008 quarter and the March 2009 quarter. IRR assistance remained unchanged at 2.6 percent of total housing contribution to GDP between the December 2008 and March 2009 quarters. AS rose slightly from 4.9 percent to 5.1 percent of total housing contribution to GDP over the same period.

Figure 14: Government housing assistance as a percentage of the contribution of housing to gross domestic product (to March 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 $375.7 million in the March 2009 quarter to $391.8 million in the June 2009 quarter. Total government housing assistance in the June 2009 quarter was 13.7 percent more than the $344.5 million provided in the June 2008 quarter.

Over the March 2009 quarter, the proportion of IRR tenants not receiving a benefit fell from 21.3% to 20.7%. This was the only significant change in the composition of benefits for IRR tenants, as shown inFigure 15.

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

Source: Housing New Zealand Corporation

Figure 16 shows that there were no significant changes in the composition of benefits received by AS recipients in the March 2009 quarter, when compared with the December 2008 quarter, although the spread in the second to top area (for Unemployment Benefits recipients) has been widening quickly since reaching its narrowest point in the June 2008 quarter. This is likely to continue.

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

Source: Ministry of Social Development

Waiting list priority for Housing New Zealand Corporation housing is determined by several factors⁵, and applicants are divided into four groups that reflect different levels of need. The groupings are referred to as:

• A priority⁶
• B priority⁷
• C and D priority⁸

As shown in Figure 17⁹ , the combined A and B priority waiting lists increased 7.3 percent from 4,122 applicants in May 2009 to 4,422 in September 2009. Priority A applicants increased by 41.9 percent over the same period, and are up 14.1 percent in the year to September 2009. Priority B applicants also continued to climb, up 5.3 percent between May 2009 and September 2009, and up 6.8 percent for the year.

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

Source: Housing New Zealand Corporation

As shown in Figure 18, average waiting times for both Priority A and B applicants have fallen by about ten days since the start of the year. For September 2009, Priority A applicants waited on average 30 days, compared with 38 days in January 2009, but still higher than 23 days in September 2008. Priority B applicants wait on average 81 days, down from 90 days in January 2009, but still up compared with 72 of September 2008. Taken together, the data suggests a slow increase in demand for Housing New Zealand Corporation properties, slightly beyond what the Corporation can meet in the short run.

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

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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.