Editorial: A state house is a home - but not for life

Photo / NZ Herald

Not for the first time, a housing minister has wanted to sell state rental properties and use the money to build homes for people in need.
As always, the idea met opposition from those who simply want the state to build more houses.

It is curious that many who profess concern for the less well-off are content to see them languish on waiting lists while tenants whose incomes have risen or children have grown up, stay where they are.

Housing NZ has about 4000 people in significant need waiting for homes. At the same time, it has 6000 tenants paying market rents. The minister, Phil Heatley, did not propose to evict these tenants outright.

They were to be given options of buying the house, moving to an area of higher rent or having the house transferred to one of several charities that believe they could borrow against the equity to build more houses for the needy.

The Cabinet appears to have backed off. It has announced decisions that will not force the choice on existing tenants paying market rents. It will introduce reviewable contracts only for new tenants from July next year, and it says current tenants will not be disturbed.

Why not? Those who can afford market rents are in the same position as tenants in the private sector. The state as a landlord is perfectly entitled to put its houses to better use as it sees fit, provided the tenant is given sufficient notice. July next year is ample notice.

Perhaps the Cabinet has heeded the objection from the Tenants Protection Association, which says a rule restricting state tenancies to the duration of tenants' need would force families to leave friends, and children to change schools.

But this happens in the real world all the time. Taxpayers provide housing for those who cannot afford private rentals, not to give state tenants more permanence than those paying private rent.

The supposed permanence of a state tenancy will be adding to the waiting list for them. It might explain the number applying for a state house even when there was heavy private investment in rental housing that could run at a loss for tax purposes.

The market will be tougher for tenants now. This year's Budget stopped two of the tax favours, and property prices continue to languish, without dropping enough to make it much easier for tenants to buy a home. Rents will be rising to compensate owners for the loss of write-offs and the lack of much immediate prospect of capital gains.

Ideally, the better-off state tenants would be encouraged to become home-owners, which is not easy at present. New Zealand houses remained 20 per cent over-valued on the Economist magazine's index. Anything the Government can do to help all tenants into home-ownership would do more social good than protecting existing state tenancies.

Selling state houses at rates that dislodge current market prices could be the "circuit breaker" desired by those who call this a continuing affordability crisis.

Housing NZ has 70,000 homes. Too many of them are three-bedroom units, too many for their aged or solo tenants and not big enough for many of the families now in need. Too many of them are concentrated in a few suburbs where they lack surrounding property owners with the incentive to maintain the neighbourhood's value and appearance.

Many of the houses would seem hard to sell at prices that enable new units to be built in more scattered places. But if nothing else, the Cabinet's introduction of reviewable tenancies from next July should shatter the myth that state houses are awarded for life.

If state tenants have come to regard their house as their own, and they are in a position to buy it, let them make it their own. It is only fair to the next on the list.