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Affordable housing scheme supporters say falling property prices and a new, more conservative Auckland City Council won't derail their campaign to help workers buy their own homes through equity share deals.
Joint ownership deals have been touted as a way of getting working families into increasingly expensive housing - a massive problem in many overseas cities where critical workers such as firefighters, nurses and teachers are pushed further away from the big cities.
"There's a range of projects we are now undertaking around affordable housing, using the concept of shared equity and shared ownership," says Brian Donnelly, executive director of charitable trust the NZ Housing Foundation. He says he will continue to partner with councils and Government bodies around the country to provide affordable homes.
"We know the need is there and it is growing. We are looking for innovative ways to help that," he says.
The foundation's latest scheme - a joint venture with Auckland City Council and McConnell Property - came under new scrutiny last week, after lawyers for the council said they had found potential legal problems with the partnership contract.
It is not expected these will scupper the arrangement, which includes a commitment of $9 million from the council over the next five years.
"We have paid the first instalment, we are now obliged and contracted to build 100 houses in the next five years," says councillor Cathy Casey, who has worked on the project for three years.
Auckland mayor John Banks has publicly said he is against the affordable housing scheme but councillor Doug Armstrong has allayed fears the council might kill it off.
"We are reviewing all the council's involvements, including contributions under affordable housing, but we won't be reneging on anything where we have contractual obligations," he says. "Generally the mayor is against putting new money into projects that are the role of central government.
"For local authorities to do it, they would have to intrude into people's lives, and that's not the role of local authorities."
How could the council choose who is eligible for a house? asks Armstrong. The Government could more easily find out through income tax how eligible people were, he says.
Auckland Green MP and the party's housing spokeswoman, Sue Bradley, says it would be "an absolute disgrace" if Auckland City Council backs out of the contract and applauds the fact the council is taking responsibility for the city's housing crisis, albeit on a small scale. Affordable housing is an issue all parties should be concerned about, she says.
The Auckland City Council/NZ Housing Foundation initiative is working to schedule and its first project, seven new family homes in Mt Roskill's Denny Ave, is currently at the consent stage. The partnership is also looking at sites in Mt Wellington, Avondale, Onehunga and Panmure, with the emphasis on good transport routes for service workers.
"We've taken inquiries from well over 100 people," says Donnelly.
Despite a slowing housing market, there is a big affordability gap.
"I think it's quite significant right now," says Donnelly. "We are seeing people struggling in terms of being able to get into their own first home and that's the group we feel needs some [help]. Young families who are perhaps on low to modest incomes ... in Tauranga, Nelson, and Auckland, they are experiencing the same problems. I don't think it's gone away for these people living in Auckland City, who want to be able to live on the isthmus."
Donnelly hopes the Auckland City programme will inspire other local authorities to participate.
The Housing Foundation is also hoping to set up a shared equity scheme for buyers of some homes at McConnell Property's new McLennan development planned for the former Papakura army base.
Of the 430 dwellings, about 25 per cent will be homes for Housing Corporation and a possible 8 per cent will go to the Housing Foundation, with the rest going to the open market.
"A lot of the thinking about the whole issue of affordability can be overly simplistic," says Martin Udale, McConnell Property's managing director. "It is driven by much bigger issues, such as demographic change, people's changing habits, the fact people want to live in cities."
The Housing Foundation is talking to community groups in Tauranga, Nelson and Queenstown about equity share schemes.
Donnelly is on the board of the Queenstown Lakes Community Housing Trust, set up by the Queenstown Lakes District Council, which is advanced in its plans for up to 40 homes. It has $2 million funding from the Housing Ministry and a further $2m matched by the trust.
From next week interested parties will be able to go online to register their interest and put in applications for a home. "We would like to be able to hand the keys [for a home] to somebody in the next two months," says trust chairman David Cole.
Queenstown's plight is reasonably pressing for service workers in the town, with the median house price in Queenstown a heady $535,000.
Cole says he is not targeting low-income groups. "We are in the middle-spectrum group, people who just need that additional assistance to get into their properties," he says.
Some of the dwellings in Queenstown will be new, others existing. The arrangement will be a shared ownership, with the trust having around a one-third shareholding, with a small deposit from the house owner and a bank loan.
The part-owners will be encouraged to "staircase" out of the arrangement - exiting in steps - so, eventually, they completely own the property. And if they want to do an addition or renovation, they will have to pay out the trust first.
The Ministry of Housing, now under minister Maryan Street, is hoping to introduce the Affordability Housing Bill to Parliament before Christmas. It is likely to bring forward more shared equity housing schemes.
The only existing scheme is Welcome Home Loans, an initiative by Housing New Zealand which underwrites private lenders who can service a loan but lack a large enough deposit.
The number of these loans hit 3000 last month, with about 80 households taking part each month. The average income of a borrower was just under $57,000 and the average amount borrowed was $168,871.
Says one property commentator: "How many households will benefit from these shared equity schemes? It's not going to be tens of thousands that's certain. This is just one of a whole range of tools."
