The MSD data shows the lowest point was June 2015 when just 3352 applicants were on the waitlist. But as housing pressures intensified, demand skyrocketed, increasing eightfold.
Spiralling demand for housing support from the country’s most vulnerable people has been a constant source of criticism targeted at the Labour Government, which campaigned back in 2017 on fixing the housing crisis at a time of rising homelessness and reports of families living in cars.
Since then, demand for social housing has increased nearly fivefold to April this year. On top of that, close to 5000 households have been living in emergency housing, such as motels, at a cost of roughly $1 million a day, and the number of people living in cars has also increased.
However a tipping point may have been reached, with quarterly social housing demand appearing to have peaked in April, dropping by more than 3700 applicants since then.
At 23,439 applicants in November, demand is the lowest it has been since February 2021 when there were 23,259 households on the waitlist.
Demand has declined in each region, with the biggest drop in Auckland from 8864 in April to 7652 as of October.
Since September 2017, near the time Labour formed a government, there has been a net increase of 10,800 public homes, now totalling 76,997.
Of the new homes, 3889 have been built by state landlord Kāinga Ora - now with more than 65,000 homes in its portfolio - and 6912 by community housing providers, who now account for nearly 12,000 public homes. There have also been more than 4000 transitional housing places added.
Housing Minister Megan Woods said the declining trend in demand was “pleasing” and pointed to an increase in supply, particularly in Hastings and Rotorua where, historically, new housing hasn’t kept up with population growth.
Increases to benefit levels were also likely making private rentals more affordable, Woods said.
But neither her office, nor the Ministry of Housing and Urban Development, was able to provide long-term modelling to show if the downturn would be sustained.
The latest data also showed a declining trend in demand for emergency housing, including motels.
Demand appeared to have peaked at 4983 households in November 2021, with a fall to 3486 this November. There were 3252 children in those households, down from 4599 in November 2021.
Costs have also declined significantly, from a peak of $41.4m across December 2021 to $28m in November this year - the lowest since July 2021.
People working in the community housing sector, which operates privately in partnership with the Government, told the Herald it was “welcome news” but they were sceptical about whether the housing crisis was on a clear path to being fixed.
The operators, which include iwi providers and community-based organisations like the Salvation Army, have their own social housing stock and take applicants referred to them from the MSD waitlist as well as their own clients.
Stephen Hart, chief executive of Auckland-based Community of Refuge Trust, said the various organisations served different communities, with differing levels of need.
“But the overall decline is a small piece of positive news after many years of very bad news.”
Hart said part of it was down to supply catching up with demand, with the community housing sector alone providing more than two thirds - nearly 7000 - of the new homes in the past four years, as part of the public housing plan in partnership with the Government.
Another key factor was zero - even negative - net migration through the Covid years, and less pressure on the housing market overall.
“We’ve also had three years of very high building rates. I think those are all really important [factors] to take into consideration.”
However, with borders now fully reopened and a tough economic forecast, Hart said the reasons for the current downturn in social housing demand needed to be front of mind to ensure it was sustained.
Increased inflation would start to eat away at people’s ability to pay rent and rising interest rates could see fewer new builds and fewer people moving out of the rental market.
“Ultimately that just puts pressure on those who are stuck there and then eventually might slide down to the Public Housing Register.”
It was also “crucial” the Government did not slow down its building programme, nor support for the community housing sector, to ensure supply continued to meet that still-high demand.
“The people the economic downturn will have the biggest effect on will be people on low incomes. That’s the public housing system, the safety net for people who the wider housing sector has failed.”
Hart said there was still a lot of “untapped potential” in the sector to deliver new supply. The most important factor was consistency of government funding and support.
The current programme runs from 2021 through to 2024.
“We’re obviously very keen to continue to partner with government after that point. But without the certainty of what that would be, it becomes difficult for long-term planning.”
There appeared to be broad consensus in Parliament to address the housing crisis and Hart urged a cross-party agreement to provide that certainty.
“If that could be drawn together into a more strategic, long-term, national housing plan, we would be very supportive.”
