The challenges confronting the Auckland community housing sector
Auckland’s housing crisis has placed increasing pressure on organisations such as CORT to increase the stock of affordable rentals. Auckland continues to grow by an estimated 25,0001 people per year, yet the city is building only half of the estimated 10,000 new homes required to accommodate this increased population. The shortage of housing continues to push up house prices and this in turn results in increased rental costs. The highest demand in the social housing sector is increasingly for one and two-bedroom units. Accordingly, the average rental of a one-bedroom unit in Auckland has increased by nearly 10% in the past six months to an average of $345 per week.
- “Auckland’s population is projected to grow to between 2.2 and 2.5 million over the next 30 years.”
Auckland Plan, 609/Priority One: Increase house supply to meet demand.
CORT is finding it increasingly difficult to continue to provide properties that it rents from the private market. Even when cross-subsidising the market-rented properties with income from the properties it owns, this is still insufficient to ensure that the rents charged are affordable for its tenants, who are reliant on government benefits as their primary source of income.
The situation has been made worse by the Government’s refusal to increase the accommodation supplement over the past five years. The shortage has been further exacerbated by the Auckland Council’s current zoning restrictions with associated compliance costs that make it virtually impossible to build one and two-bedroom units anywhere other than in high-rise developments in the inner city.
This situation is likely to continue until the council’s Unitary Plan is implemented. The latest information from council indicates that it may not be implemented for another three years.
The ongoing shortage of housing stock in the one and two-bedroom market will continue to push up purchase and rental prices. This is forcing those on low incomes, especially those reliant on government support (including pensioners and people with physical or mental disabilities), into substandard boarding housing and overcrowded accommodation.
Housing affordability is a growing and significant problem. It affects everyone from young people and families trying to establish their first home to those renting on low incomes. Over the past 20 years house prices have increased at a greater rate than household incomes. The consequence is that a greater portion of income is spent on mortgages and rent, leaving less for other goods and services. The net result is that less is spent on local businesses and the greater economy suffers.
One of the groups most severely affected by increasing rents are beneficiaries and those on very low incomes. CORT works to assist these communities with housing and services, helping tenants build resilience into their communities.
The cost of home ownership and renting in Auckland is becoming increasingly prohibitive. For many on low incomes this can means they can no longer afford their current rental accommodation or their children are deprived of some of the very basic necessities of life.
This housing crisis has placed increasing pressure on organisations such as CORT Community Housing to increase the stock of affordable rentals.