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Ministry releases key information about demand to social housing sector

15 December 2016.

Source: Ministry of Social Development

The Ministry of Social Development has released its 2016 Social Housing Purchasing Strategy.

The strategy brings together data on the nature and demand for social housing; detail on the many ways the ministry can work with providers; and where - by June 2020 - the Ministry anticipates we’ll need to secure more places.

"The strategy is not just for social housing providers. It is the driving document for the Ministry to meet demand, shape the market and achieve its deliverables under the Social Housing Reform Programme," says Deputy Chief Executive Scott Gallacher.

"The data confirms what we’ve been saying for some time. We know that there is a significant mismatch between the current pool of social housing properties and where the demand lies. The classic three-bedroom state house is no longer what people need. The vast majority of those coming to us for help with housing need either a one or two-bedroom property.

"We have signalled that we will be working to secure another 3,800 social housing places by 2019/20, almost half of which need to be one-bedroom places. We’ve also got a further 2,600 places contracted or close to it. That’s more than 6,400 new places for people and families in need.

Mr Gallacher also stressed that the purchasing volumes are neither targets, nor limits.

"While we’ve incorporated data from a range of sources when developing the strategy, the social housing register is a key indicator of demand. The Ministry will be monitoring the social housing register closely and adapting to changing needs. We need to be flexible and responsive to unexpected changes in demand.

"This is the second time this type of information has been released and incorporates information from a range of sources including the social housing register, data from MBIE and HNZ and feedback from the sector.

"We won’t be purchasing the properties themselves, this will still be the domain of providers; rather we’ll be subsidising tenancies through contracts with providers and the income-related rent subsidy.

Providers can use the information to identify where, and in what type of properties, they should invest.

"The strategy gives providers a great deal of information which they can use when making investment decisions, but its impact is far wider than that. At its core, if this resource helps to shape the market to better reflect the social housing demand, we’ll be able to help more people in need."

-ENDS-

Editor’s note: The 2015 release of this document was called the Social Housing Purchasing intentions. The 2016 release includes updated intentions as part three.

The Purchasing Strategy is published here

Regional highlights from MSD’s 2016 Social Housing Purchasing Strategy

Below follows data extracted from the 2016 Social Housing Purchasing Strategy. It provides an overview of the places we expect we’ll need more of and where the mix could change. It also includes some background information for context.

Northland

-As at 30 September 2016 1,933 households in Northland were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 202 households were on the social housing register.

-Register demand is greatest for one and two bedroom places.

-Whangarei has seen the biggest growth in demand for social housing compared to other areas in the region.

-There is less demand for three bedroom places and very little demand for anything larger

-Market rents in the region (for both social and private housing) are generally somewhere between $290 and $330 per week. Tenants living in social housing will pay IRR rather than market rent.

MSD's Purchasing Strategy indicates we need to:

-Fund more one bedroom places - 60 (20 in the Far North and 40 in Whangarei).

-Fund more two bedroom places - 50 (10 in the Far North and 40 in Whangarei).

-Fund 15 more three bedroom places in Whangarei.

-Fund five more places in Whanagrei with four or more bedrooms

-Look to change the mix of existing- places with more one to three bedrooms properties and less places with four or more bedrooms.

Auckland

-As at 30 September 2016 28,591 households in Auckland were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 2,408 households were on the social housing register.

-Register demand over the last two years has been greatest for one and two bedroom places. At the same time, demand for three and four-plus bedroom places has been reducing.

-Rents have been steadily increasing over the last two years.

-The vast majority of current social housing places have three bedrooms.

-Market rents in the region (for both social and private housing) are generally somewhere around $496 per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund significantly more one bedroom places - 690 (80 in the north, 160 in the west, 250 in Central Auckland and 200 in the south)

-Fund significantly more two bedroom places - 705 (40 in the north, 200 in the west, 185 in Central Auckland and 280 in the south)

-Fund significantly more three bedroom places - 305 (five in the north, 90 in the west, 80 in Central Auckland and 130 in the south)

-Fund significantly more places with four or more bedrooms -200 (70 in the west, 30 in Central Auckland and 100 in the south)

The Waikato

-As at 30 September 2016 4,004 households in the Waikato were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 313 households were on the social housing register.

-Demand on the social housing register is greatest for one and two bedroom places. There is less demand for places with three or more bedrooms.

-Hamilton has the greatest demand for social housing compared to other areas in the region.

-Hamilton is also expected to have the largest population growth over the next 30 years.

-Market rents in the region (for both social and private housing) are generally between $200 and $350 per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund more one bedroom places - 115 (5 in the Waikato district, 100 in Hamilton city, and 10 in Taupo)

-Fund more two bedroom places - 40 (5 in the Waikato district, 5 in Matamata-Piako district, 20 in Hamilton city and 10 in Taupo)

-Fund 30 more three bedroom places in Hamilton city and consider funding more in Taupo

-Fund 20 more places with four or more bedrooms in Hamilton.

-Look to change the mix of existing- places with more one and two bedroom properties and less places with three or more bedrooms.

The Bay of Plenty

-As at 30 September 2016 2,530 households in the Bay of Plenty were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 404 households were on the social housing register.

-Demand on the social housing register is greatest for one and two bedroom places.

-Tauranga has the greatest demand for social housing compared to other areas in the region.

-Tauranga is also expected to have the largest population growth over the next 30 years).

-Market rents in the region (for both social and private housing) are generally somewhere between $152 and $354 per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund more one bedroom places - 155 (10 in the Western Bay of Plenty district, 90 in Tauranga city, 40 in Rotorua and 15 in Whakatane)

-Fund more two bedroom places - 85 (10 in the Western Bay of Plenty district, 25 in Tauranga city, 30 in Rotorua and 20 in Whakatane)

-Fund more three bedroom places - 45 (30 in Tauranga city, 10 in Rotorua and five in Whakatane)

-Fund five more places in Tauranga with four or more bedrooms

-Look to change the mix of existing- places with more one, two and three bedroom properties.

Gisborne

-As at 30 September 2016 1,121 households in Gisborne were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 112 households were on the social housing register.

-Demand on the social housing register is greatest for one and two bedroom places.

-The population is expected to remain relatively stable over the next 30 years.

-Market rents in the region (for both social and private housing) are generally around $282 per week. Tenants living in social housing will pay IRR rather than market rent.

-Rents have fluctuated month-on-month over the last two years but changes have generally remained within a range of $50 per week.

MSD’s Purchasing Strategy indicates that we need to:

-Fund more one bedroom places - 30

-Fund more two bedroom places - 35

-Fund more three bedroom places - 5

-Consider reducing the number of places with four or more bedrooms.

-Look to change the mix of existing- places with more one, two and three bedroom properties and less places with four or more bedrooms.

The Hawkes Bay

-As at 30 September 2016 2,544 households in the Hawkes Bay were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 248 households were on the social housing register.

-Demand on the social housing register is greatest for one and two bedroom places.

-Over the last two years Napier has seen the biggest growth in demand for social housing compared to other areas in the region.

-Market rents in the region (in both social and private housing) are generally somewhere between $195 and $325 per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund more one bedroom places - 80 (30 in Hastings and 50 in Napier)

-Fund more two bedroom places - 80 (30 in Hastings and 50 in Napier)

-Fund more three bedroom places - 35 (10 in Hastings and 25 in Napier)

-Look to change the mix of existing- places with more one, two and three bedroom properties in Napier and Hastings and less places with three or more bedrooms in Wairoa and the Central Hawkes Bay.

Taranaki

-As at 30 September 2016 1,024 households in Taranaki were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 48 households were on the social housing register.

-Demand on the social housing register is largely for one bedroom places.

-Compared to other areas in the region, New Plymouth has the greatest demand.

-New Plymouth is also expected to have the largest population growth over the next 30 years).

-Market rents in the region (for both social and private housing) are generally somewhere between $152 and $354 per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund more one bedroom places in New Plymouth- 10

-Look to change the mix of existing- places with more one, two and three bedroom properties in New Plymouth and less places with three or more bedrooms in Stratford and South Taranaki. Also look to reduce the number or places in New Plymouth with four or more bedrooms.

Manawatu-Wanganui

-As at 30 September 2016 2,225 households in Manawatu-Wanganui were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 222 households were on the social housing register.

-Demand on the social housing register is largely for one and two bedroom places.

-Compared to other areas in the region, Palmerston North has the greatest demand for social housing and has also seen the greatest growth in demand.

-Rents across the region have been slowly increasing over the last two years.

-At the same time rental turnover (new bonds lodged) has been reducing.

-Market rents in the region (for both social and private housing) are generally somewhere between $189 and $310 per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund more one bedroom places- 65 (10 in Whanganui, 50 in Palmerston North and 5 in Horowhenua)

-Fund more two bedroom places- 25 (5 in Whanganui, 5 in the Manawatu, 10 in Palmerston North and 5 in Horowhenua)

-Fund more three bedroom places- 15 (5 in Whanganui and 10 in Palmerston North)

-Look to change the mix of existing- places with more one, two and three bedroom properties in Palmerston North and Wanganui. Consider having less places with three or more bedrooms across the rest of the region. Look to increase the number of one bedroom places in Horowhenua.

Wellington

-As at 30 September 2016 7,749 households in Wellington were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 681 households were on the social housing register.

-Demand on the social housing register is greatest for one bedroom places.

-Compared to other areas in the region Wellington City has the greatest demand for social housing.

-The Kapiti Coast and Wellington City are expected to see the greatest population gorwth over the next 30 years.

-Market rents in the region (for both social and private housing) are generally somewhere between $260 and $403 per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund more one bedroom places- 325 (315 in the Wellington area and 10 in the Kapiti Coast)

-Fund more two bedroom places- 60 (55 in the Wellington area and five in the Kapiti Coast)

-Fund more three bedroom places- 65 (60 in the Wellington area and five in the Kapiti Coast)

-Consider funding another five places with four or more bedrooms in Wellington.

-Look to change the mix of existing- places with more one and two bedroom properties in Welington and Kapiti. Consider having less places with four or more bedrooms in Kapiti.

Tasman

-As at 30 September 2016 146 households in Tasman were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 23 households were on the social housing register.

-Demand on the register is greatest for one-bedroom places.

-Rents have fluctuated month-on-month over the last two years but have been generally trending up.

-At the same time rental turnover (new bonds lodged) has been reducing.

-Market rents in the area (for both social and private rentals) are generally in the region of $349 a week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund five more one bedroom places, five more two bedroom places and five more three bedroom places

-Look to change the mix of existing- places with more one and two bedroom properties but consider having less places with four or more bedrooms.

Nelson

-As at 30 September 2016 547 households in Nelson were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 56 households were on the social housing register.

-Demand on the social housing register is greatest for one and two bedroom places.

-The population in the Nelson region is expected to increase by about 30% over the next 30 years.

-Rents have remained relatively stable over the last two years with more dramatic peaks/changes in the last six months.

-Rental turn-over(new bonds lodged) have started to reduce over the last two years.

-Market rents in the area (for both social and private rentals) are generally in the region of $308 a week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund 10 more one bedroom places

-Fund five more two bedroom places

-Look to change the mix of existing- places with more one and two bedroom properties but consider having less places with four or more bedrooms.

Marlborough

-As at 30 September 2016 374 households in Marlborough were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 63 households were on the social housing register.

-Demand on the social housing register is greatest for one and two bedroom places.

-Rents across the region have been slowly increasing over the last two years.

-At the same time rental turnover (new bonds lodged) has been reducing.

-Market rents in the area (for both social and private rentals) are generally somewhere in the region of $319 a week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund 30 more one bedroom places in Marlborough

- Fund 20 more two bedroom places in Marlborough

-Look to change the mix of existing- places with more one and two bedroom properties but consider having less places with three or more bedrooms.

The West Coast

-As at 30 September 2016 268 households in the West Coast were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 17 households were on the social housing register.

-Demand in the last two years has almost exclusively been for one-bedroom places.

-Rents across the region have been slowly decreasing over the last two years.

-At the same time rental turnover (new bonds lodged) has been increasing.

-Market rents in the region (for both social and private housing) are generally somewhere between $183 and $246 per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund five more one bedroom places in the Grey district

-Look to change the mix of existing- places with more one bedroom properties in the Grey district but consider having less places with three or more bedrooms across the region.

Canterbury

-As at 30 September 2016 6,219 households in Canterbury were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 655 households were on the social housing register.

-Demand on the social housing register is greatest for one and two bedroom places.

-Compared to other areas in the region, Christchurch city has the greatest demand for social housing.

-The Selwyn district is expected to see the greatest population growth over the next 30 years.

-Rents in the region have been relatively stable over the last two years and rental turnover (new bonds lodged) has been increasing.

-Market rents in the region (for both social and private housing) are generally somewhere between $199 (MacKenzie) and $444 (Selwyn) per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund more one bedroom places- 245 (10 in the Waimakariri, 220 in Christchurch City, five in Ashburton, five in Timaru and five in Waimate)

-Fund more two bedroom places- 40 (five in the Waimakariri, 30 in Christchurch City and five in Waimate)

-Fund 20 more three bedroom places in Christchurch City.

-Look to change the mix of existing- places with more one, two and three bedroom properties in Christchurch. Look to increase the number of one and two bedroom properties in Ashburton and one bedroom properties in Timaru. Look to decrease the number of properties with three or more bedrooms across the region.

Otago

-As at 30 September 2016 1,465 households in Otago were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 73 households were on the social housing register.

-Demand on the social housing register is greatest for one and two bedroom places.

-Compared to other areas in the region, Dunedin has the greatest demand for social housing, although this has reduced over the last few quarters.

-The Queenstown-Lakes district is expected to see the greatest population growth over the next 30 years (over 60%).

-Rents in the region regions have been slowly increasing over the last two years and rental turnover (new bonds lodged) has been slowly decreasing.

-Market rents in the region (for both social and private housing) are generally somewhere between $213 (Clutha) and $496 (Queenstown-Lakes) per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund 30 more one bedroom places in Dunedin

-Fund 10 more two bedroom places in Dunedin

-Look to change the mix of existing- places with:

-More one and two bedroom properties and fewer properties with four or more bedrooms in Dunedin.

-Decrease the number of properties with three or more bedrooms in the Clutha, Waitaki and Central Otago districts.

-Maintain the number and types of properties in the Queenstown-Lakes district.

Southland

-As at 30 September 2016 367 households in Southland were living in social housing and paying income-related rent (IRR). Most social housing tenants pay 25% of their income as rent (income-related rent/IRR). MSD pays the difference between this and market rent to the provider as a subsidy (the income-related rent subsidy/ IRRS).

-As at the end of September 2016 18 households were on the social housing register.

-Demand on the social housing register is greatest for one and two bedroom places.

-All demand for social housing is in Invercargill.

-Rents have fluctuated month-on-month over the last two years but have been generally trending up.

-At the same time rental turnover (new bonds lodged) has been reducing.

-Market rents in the region (for both social and private housing) are generally somewhere between $207 and $230 per week. Tenants living in social housing will pay IRR rather than market rent.

MSD’s Purchasing Strategy indicates that we need to:

-Fund more one bedroom places in Invercargill- 10

-Consider increasing the number of two-bedroom places in Invercargill.

-Consider reducing the number of places with three or more bedrooms across the region.

-Look to change the mix of existing- places with more one and two properties in Invercargill and less properties with three or more bedrooms across the region.

- This is a change to the existing places. Nationwide the number of places in the base (existing properties) will remain the same but the mix (where they are and the types of properties they’re made up of) will change. The purchasing intentions are in addition to these changes. Any reduction in existing places would only occur as existing tenants exit, and would be carefully monitored to ensure that decreases are only occurring in the locations and types of properties where there is very low demand. Nationwide the number of places in the base will remain the same.

For more information contact:

MSD Media Team | Ministry of Social Development

Email: media@msd.govt.nz Tel: +64 (0)4 916 3496

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