That inability to access capital has been largely driven through a lack of clear and stable policy, along with a regulatory framework that unfairly benefited HNZC over other independent providers.
Policy settings that encourage growth and investment in new housing by the providers are taking time to develop and implement -- as should be expected given the critical role housing infrastructure plays within society, and the impact that housing has on personal and community outcomes.
However, much has been achieved and there is more change to come.
Recent policy changes developed through the social housing reform programme have a number of clear objectives. The overarching objective is to create strong sustainable large-scale competition for Housing NZ. This would not only provide tenancy alternatives, but will assist with the transfer back into Housing NZ of innovation, and best practice tenancy and asset management.
This transfer of IP will assist in lifting standards for the provision of social housing across the entire sector.
Among many recent structural changes and policy amendments, the change in legislation to allow certified community housing providers to receive the Income Related Rental Subsidy (IRRS) has been a key step.
This immediately creates a level playing field whereby non-Housing NZ providers are able to access cash-flows that better meet the costs of sustainably providing housing, without over-reliance on philanthropic monies or ad-hoc grants.
The Ministry of Social Development is beginning to develop choice as to where, and from whom, it is procuring housing. It is critical for those in need of housing that there are alternative providers who may deliver better solutions than the existing system of sole reliance on state supply.
The choices available to the ministry will ensure a greater lift in standards by housing owners to ensure their product meets the needs of each community.
As taxpayers we can be assured that by developing choice in the provision of social housing, the large state housing estate we already own will be better-managed and maintained for the long term.
In recent years a range of public and private sector social housing thought leaders have undertaken tours of Australia, with the objective of assessing and learning from the development of their community housing sector. Five years ago most commentators would have considered the development of a large and sustainable third sector within New Zealand was many years behind that sector's development in Australia. Things change quickly however, and though Australia appears to have stalled as federal and state governments flip-flop on policy, the New Zealand environment appears primed for genuine sustainable growth under a clearer and simpler policy framework. Assuming there is some consistency of policy here, it could be expected that our community housing sector may overtake Australia within a few years.
Though the provision of large-scale social and affordable housing within New Zealand remains embryonic, those responsible for future policy setting are starting to focus away from Australia and more towards the highly sophisticated British housing association market.
That market is well-regulated, highly innovative with regards to developing and managing housing stock, and attracts billions in capital through the capital markets at rates better than the British Government can borrow at. Though it is a market 20 years ahead of New Zealand, the vision from leaders within the sector should consider how we may accelerate the development of the sector to rival Britain within five years.
Ultimately a stable and clear bi-partisan approach to developing and implementing policy for evolving community housing sector is an absolute must. Existing and new community housing providers require this consistency and stability in policy to plan and attract the large capital investment needed to develop more social housing.
The need for improved provision of social and affordable housing within not only Auckland but other metropolitan areas should be well understood by all. But as with much debate around state-owned assets, there is often a desire to confuse issues with political sentiment and leanings.
We must ensure the debate focuses on the genuine housing needs within our communities and the need for a range of alternatives to better deliver that housing.
• Raynor McMahon is Westpac Director, Structured Loans.
