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State Houses and Social Housing (part 2)

State housing, or “social housing” more generally, is often in the news for one reason or another. Governments over the years have all had their own policies. In this post series, I won’t really be looking at the pros and cons (at least not much) – I’ll mainly be looking at some of the numbers.

Part 2: State Housing Through the Years

There are a couple of easy-to-read histories of state housing here and here, and another take here. I’ll look at some different aspects in this post, although I’ve relied on the data from those sources in terms of the ‘stock’ and ‘construction’ of state homes.

State housing began to take off in a big way in the 1940s, and the number of homes kept rising until around 1990, peaking at 70,000.

Source: http://www.teara.govt.nz/en/graph/32421/total-state-housing-stock

Source: http://www.teara.govt.nz/en/graph/32421/total-state-housing-stock

The chart stops at 2002, but numbers haven’t changed much since then. Depending on whether you’re looking at occupied homes only, or all state-owned homes, or adding in the properties which Housing NZ leases but doesn’t own, you’re looking at 64,000-68,000 ‘state homes’ today.

Those figures are just snapshots of how many state homes there are at a point in time. They’re affected by the number of homes built each year, and by the number of homes sold off. Tenants have often had the right to buy their home, or the homes may have been sold to other social housing providers or on the open market. The graph below shows the number of state homes built or sold each year:

Source: http://www.nzhistory.net.nz/media/photo/construction-and-sale-of-state-houses-1938-2002

Source: http://www.nzhistory.net.nz/media/photo/construction-and-sale-of-state-houses-1938-2002

State home construction was quite significant from the 1940s right through until the 1970s. Around 80,000 homes were built over those four decades, averaging 2,000 a year.

Again, the chart above stops at 2002, but here’s one which I’ve put together which runs from the mid-1970s up to the present day. It uses different data – building consents, whereas I imagine the previous graph is based on completions:

state-homes-consented

After the fast-building 1970s, the level of construction ebbed in the early 1980s. There was a bit of a resurgence in the late ‘80s – more than 1,000 a year – but very few homes were built in the 1990s or 2000s.

So, on to the 2010s. National deserve credit for ramping up home construction in the last few years. The last time this many state homes were being built was under the Lange government. 700 of the homes were to replace earthquake-damaged ones in Canterbury, but there’s also a growing state presence in other places, especially Auckland. Even without the Canterbury rebuilds, there have been 1,400 state homes consented in the last three years, higher than any other period since the ’80s.*

Housing New Zealand will actually be scaling up its build rate even more – to 1,000-2,000 homes a year.

On the other hand, if National had started building more state homes as soon as they were voted in eight years ago, it could have taken the edge off the housing crisis for some of the most vulnerable people in Auckland. It could also have smoothed the boom-bust-boom for the construction industry, meaning today we might have a more experienced workforce, and more homes to show for it. The industry shrank by 20% in the post-GFC years.

Hindsight is always 20/20, though. No doubt the government might have done things differently if it knew what was coming, but it was really just continuing 20 years of lacklustre state home building.

 

* However, this may well include developments where Housing New Zealand keeps some homes and sells off others to social housing providers or on the open market, so the number of ‘new state homes’ could be overstated.

8 comments to State Houses and Social Housing (part 2)

  • John Lawson

    With graphs like that you can see why the government stopped funding the encyclopedia. They clearly show the general contrast between Labour and National governments.

  • Steve Cable

    as an aside, work has begun on the Housing NZ Northcote project, with houses being demolished as we speak

  • Greg N

    Those 40,000 odd houses built between the twenty years spanning ’44 and ’64 were all rated [life span] to last a maximum of 50 years.
    They contain about 2/3rds of the state housing stock.

    And between the mid 90s and about now they were all going to be due for either demo/rebuild or serious refurbishing.

    Since that repesents a large chunk of the housing stock you can see why successive National Governments from the early 90s have basically done little else but attempted to get rid of the older stock as quickly as they could manage.
    As they’d have to rebuild 2000 houses a year, just to stand still.

    However, that fact doesn’t remove the need for state involvement.

    The need for state housing hasn’t reduced, even if the quality and quantity of the state housing stock has.

  • JimboJones

    I guess it depends on what you define as the housing crisis – is it that there aren’t enough rentals to meet demand resulting in homelessness, or is it that houses have become too expensive for first home buyers? To me state houses do nothing to address the latter – in fact by making a good percentage of existing houses (and land) not for sale, I think state houses are increasing asking prices.

    • Greg N

      Jimbo,

      The original idea of state housing (well particularly just after WWII anyway), was to use the state housing process as a way to “boot up” the house building industry from almost zero during WWII, using the committed demand for building the state houses, so that entire industries relating to housing [think framing, electrical, plumbing, cladding, roofing, home appliances industries and the skilled workers in those areas] would be created and sustained for the longer term.

      In many cases local manufacture replaced overseas imports, making a similar [or in some cases, superior] product for less.
      In other cases use of cheaper local materials [Fibrolite (shudder) was amongst those], that replaced the often way more expensive materials e.g. timber cladding.

      This approach, by design, allowed many [then] young NZ companies to use the state housing demand as base commitments over the long term [decades] to pioneer new techniques of modular housing constructon and fit out.

      In fact, the post WWII state housing projects, the created houses [by design] were not simple cookie cutter affairs as you might assume from the images you see from time to time.

      The [collective] Governments of the day proudly boasted that few of the state houses in any given street/development were exactly the same in all aspects.
      [unlike todays mass housing developments of which many are seemingly little more than one basic design replicated ad-nauseum].

      That issue of limited designs is not recent, the private developer-built housing I grew up, in which in our street of 26 stand alone houses, there were 2 other houses of exactly the same cookie cutter layout and design. [Only differing in the colour of their exterior brick work as I recall]. Many other houses down our street had 3 repeated copies in the street. Meaning in a street of 26 houses, only about 6-8 different designs actually existed.

      Anyway, the net effect of the Post WWII projects was that the entire private building industries got a major leg up as a result. It is also true, that the Governments long term commitment for the state housing project was able to hep those companies weather the boom-bust cycles of house construction over the years, so that we didn’t have to re-invent the wheel and start from scratch [with plant, people, skills and materials/processes] every decade or so – after the latest housing bust had turned the corner into another boom.

      This ongoing commitment of a “back up” or base building level is what we are lacking today as the root cause of many [but not all] of the issues.

      The original intention of the state involvement in housing was that by doing so, *all* houses whether state or privately built would become so cheap and plentiful that everyone who wanted one could buy or have access to one, even first time buyers, and it was also expected that everyone who could, would “trade up” houses as their needs changed and their incomes allowed them to. Maybe starting in a state house, then moving up into privately built housing.
      The state housing was their as the “safety net” for those who could not participate in this process.
      A related intent was that the state housing stock would evolve and be rebuilt over time as the housing stock wore out or reached the end of its economic life.

      But along the way as successive housing cycles have come and gone, the original intentions and ideas had been lost to history.

      In part, that is what Labours “Kiwibuild” program is attempting to re-kindle – use the same ideas as 70+ years ago to solve the same problems of housing unaffordability, which were just as keenly felt then as they are now.

      It is true that this time a large part of the solution this time will be apartments by necessity.
      All the cheap and easy to build on land around cities has been developed over the last 70 years.

      Time will tell if Governments, private industries and local bodies can work together to get it right this time and sustain it for the decades needed.

      • Bigted

        “the post WWII state housing projects, the created houses [by design] were not simple cookie cutter affairs as you might assume from the images you see from time to time”

        Greg have you ever lived in a state house from that era, I grew up in military housing (effectively state houses) and out of the four of them two were identical. I’ve also seen that same house plenty of times, I lived in one in Linton and again in Papakura but also knew of three of that same design while living in Waiouru and have been in the same design in a Glen Innes state house. These few basic designs had some minor changes or were put on the section at a different angle to hide the fact so many were the same, I’ve heard from a guy that maintained military houses that there are less than 20 different designs nationally (he may has exaggerated a little but there are a lot of similar designs).
        It was not only state houses of the era that were built with the ‘cookie cutter’ approach you dislike, I owned a house built in 1954 in Papakura that is identical to one a mate also owns in largely state house area of Papakura built in the early 60s.

  • Owen Thompson

    Clear that the sharpest increases in state house numbers have been under Labour governments. Something I proudly remember when I vote. My two grandchildren live in a state house and I know it’s a far better option than renting privately.

  • Ari

    I think we are missing the point entirely. The government shouldn’t be building state housing, at least not in the way it has in the past. It should stop home ownership from being an investment vehicle. Housing should be a commodity. Not a place to store vast amounts of money into an unproductive sector of the economy. Tax all capital equally and the market will adjust as investors leave the property market in droves. I say this as someone that owns 3 houses and rents my current house from someone else. The market has huge distortions because the tax system heavily favours housing as an investment. But it doesnt really help the economy.

    The housing crisis is a symptom and state housing doesn’t solve the problem.

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