Steven Joyce: Motel generation deserves better — fast

Thousands of children are growing up in motels, as the Government ignores the obvious solutions. Photo / Dean Purcell

OPINION:

Of all the public policy failures in this country over the past half-decade, one of the most appalling, and in some ways most surprising, is the unfolding debacle that is social and emergency housing.

You will recall five years ago that the world was ending in regards to housing. The apparently heartless Government of the day was putting people with nowhere else to go into highly unsuitable motel accommodation, spending an outrageous $12 million in the process.

Some people were living in cars, and Te Puea Marae in South Auckland opened up its facilities to rough sleepers. In June 2017, 5000 people were on the waiting list for social housing.

Middle New Zealand was nervous about many things with the change of Government in 2017, but an improvement in social housing outcomes was not one of them.

In much the same way people tend to believe National will do a better job managing the economy and improving public safety, they tended to believe Labour would do a better job of looking after low-income New Zealanders.

There was a sense that Labour's unshakeable belief in the power of government housing would solve the problem, and that 2017 was a high-water mark in homelessness. The self-described Government of kindness would "do this".

A strident coalition of housing advocacy groups, the left-leaning Auckland Council and motivated journalists melted into the background after the 2017 election as quickly as they had arisen, confident their work was done and sanity restored.

Flash forward five years and it's hard to believe how horrendous the situation now is. The $12m on motel accommodation has become $1.2 billion. Whole streets of motels like Ulster St in Hamilton and Fenton St in Rotorua have become permanent emergency housing suburbs.

The waiting list for social housing has risen five-fold to a massive 27,000 and this week, despite all the extra investment in wrap-around services, a woman died while living in her car. How did things get so bad? And if all this was a crisis five years ago, what is it now?

Social Development Minister Carmel Sepuloni doesn't have much useful to say on this subject these days. Back in opposition she was rightly very concerned about the plight of families living in motels.

Now, her go-to line is that this rapidly deteriorating situation over which she presides was caused by the previous Government, the one which has now been out of office for five years. Not only are they to blame for her inability to improve the situation, but somehow they are also responsible for making things five times worse.

Sepuloni should look closer to home. Her Government has made three big policy changes that have made the house rental market immeasurably worse for society's most vulnerable, and they can't even claim ignorance. Each time they were warned about the impact of the changes, and on they went.

First, they made the private rental market hugely less attractive for people to invest in.

A mix of changing tax rules, new restrictions on who can invest, new tenancy rules which greatly increase the risks for landlords, and ever-increasing requirements on facilities which must be provided, have undoubtedly reduced the number of private rentals relative to what they would have been, and put up rental prices significantly.

This double whammy has increased the total number of people who can't secure rental housing — either at all or at a price they can afford — which has caused much of the dramatic increase in the numbers on the waiting list for social housing. None of this should come as any surprise.

Second, the Government stopped asking people to move on when they no longer needed the support of Government-owned social housing. People sitting in houses often too big for them, regardless of their circumstances, and until the end of their lives, means fewer houses for those who need them.

Third, they placed all their bets for expanding social housing supply on one provider, Kāinga Ora, the latest incarnation of the old Housing New Zealand. This is purely ideological.

While in this post-socialism age nearly everybody would be happy with a warm, dry house in preference to a motel unit, the Labour Party believes it will somehow be better if it is a warm, dry government-owned house.

Despite the current Government once again rearranging the deckchairs at the agency before doing anything, Kāinga Ora is doing a reasonable job of modernising state-owned houses and growing their number. But it simply can't make a dent in the Government-induced waiting list. No matter how much money is poured in, it can't hold up the housing sky on its own.

One of the most important moves made by Bill English was to seed the development of a range of not-for-profit community housing providers, who could work alongside the Government to boost the social housing stock. Importantly, all the evidence indicates they often do a better job of providing the important social services that people in social housing often desperately need.

They have been all but frozen out by this Government.

So there you have it. Suppressing the private rental market while artificially constraining the supply of social housing results in ridiculously long waiting lists and thousands of families living long-term in motels.

It's not rocket science and it's not something that can be blamed on anyone except the Government that took those decisions.

The situation is making people desperate. It is no surprise our inner cities are being blighted with crime and an assertive and growing gang culture.

Being forced into living in long-term temporary accommodation with no hope and no plan to move elsewhere can do that to people.

A smart Government would immediately fire up the community housing providers to create more supply, and swiftly review the new rules placed on the private rental market to encourage it to grow again, so people can live in actual homes.

The alternative is a "motel generation" of children who know only small units with paper-thin walls and anti-social behaviour all around.

We need to correct course and mobilise all our resources to get these kids into a real house, quickly. That means recruiting private investors and community housing providers, as well as Kāinga Ora.

This is no time for ideological blinkers.

- Steven Joyce is a former National Minister of Finance. He is director at Joyce Advisory.