Tackling barriers to financing homes on Māori land and boosting home ownership

Māori Development Minister Nanaia Mahuta announced the Māori housing finance wānanga today. Photo / Supplied

Experts from across Aotearoa have joined forces to tackle barriers to financing Māori housing and boosting home ownership.

Māori home ownership rates are less than half those of the general population.

Rising housing costs had contributed to a steady decline in ownership rates and greater housing instability, with more Māori living in poor-quality housing.

Building houses on Māori land was seen as part of the solution, but one of the biggest barriers was accessing finance, as the land was collectively owned.

A wānanga today in Auckland brought together iwi, financial and legal experts, banking sector representatives and Māori housing providers to identify the issues and develop solutions.

Māori Development Minister Mahuta said a crucial part of the Government's policy was to get more Māori into housing.

"Getting finance is one of the biggest barriers that whānau face to build on Māori land. The whenua is collectively owned so it is not usually accepted as security.

"It is time to work together with iwi, Māori housing providers and the finance sector to pursue innovative financing alternatives to improve access to finance to build on Māori land."

A 2016 Statistics NZ study found between 1986 and 2013 the proportion of Māori living in owned homes dropped 20 per cent.

In 2013, 28 per cent for Māori adults owned a house, compared with 57 per cent for other New Zealand adults.

The proportion renting in the private sector rose rapidly from 1986 for Māori from 41 per cent to 77 percent.

The wānanga was hosted by Māori housing advocacy and support organisation Te Matapihi and supported by Te Puni Kōkiri.

Te Puni Kōkiri deputy chief executive Di Grennell said solutions would involve Māori groups and financial institutions working together.

"Māori land is not something banks deal with every day, so their level of familiarity with ownership and governance structures may be limited.

"Land is also collectively owned, not in individual title. So it is not like if a person stops paying their mortgage there is a mortgagee sale.

"In this instance, collectively owned land can't be used as collateral. So that then becomes a barrier, as financial institutions need to understand how they can manage risk."

In some parts of the country good relationships between iwi groups and banks had helped them work out their own solutions.

In other instances Te Puni Kōkiri had assisted in providing capital contributions and grants to reduce the amount needed to borrow.

It also had a range of home ownership trials, including shared equity and rent-to-buy schemes, that improved affordability by removing the need for big capital up front.

"There are many things at play, but we need a coherent picture that is easy to understand for whānau, and financial institutions, to take best advantage," Grennell said.

"Māori groups need to build relationships with banks, and also having people in the banking sector who understand the opportunity, but also their role in lending responsibly. It is about working those solutions out."

Holding up Māori housing on Māori land was also holding up further development.

"Unless people can live in good conditions on the land then other sorts of enterprises, businesses and land utilisation are less likely.

"If you can't live where you want to generate your horticulture business, for example, it can be more challenging."

Te Matapihi chairman Rau Hoskins said addressing these financial barriers had long been on the agenda.

"We are pleased to see the collaboration and willingness from all key parties now in finding a purpose designed solution to financing housing on Māori land."