INTRODUCTION

1. A good society depends on the balance and engagement of people living within it. Our review surveys the provision of new housing in the greater Auckland region during the past 50 years. The review focuses on the affordability of Auckland's housing. The period of review spans the growth of the region's population from 1.3 million in 1999, to it's present total of more than 2 million souls. The review uses 'house affordability' as an indicator of social engagement and economic balance.

2. In 1999, the year when the Auckland region's first growth strategy was launched, few strategists foresaw a role for the third-sector house-provider. Even though sharply rising house-prices, high levels of debt and increasing social disengagement should have rung alarm-bells about a need to explore new solutions to counter the region's accelerating rate of social and economic decline.

3. This review traces how third-sector housing providers came into their own during this period, as the region faced serious threats to social balance and engagement that were brought on by a series of economic and environmental crises. This review tacitly argues that market forces alone - could not have achieved the same outcome in the face of these demands. The purpose of the review is to highlight how important for the common good in the region was a cooperative partnership between the private, public and third sector working to provide better levels of social engagement and economic balance.
May we learn from the past so we can move more confidently into an uncertain future!

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Phase I [ 1999 - 2012 ]
PROFILE OF AUCKLAND HOUSING
AT THE DAWN OF THE MILLENNIUM

INTRODUCTION

4. Our review begins with a look at the make-up of housing in the Auckland region at the beginning of the third millennium. In broad terms it's profile was:

• 25 percent of prospering and productive households, getting ahead and coping well with the changes brought about by the introduction of the information technology revolution and the pressures of the region's growth.
• 40-50 percent of hardly-getting-by households, squeezed by declining real incomes through the effects of growing global economic competition; unable to save; wondering whether they could keep their jobs; and whether they could afford tertiary education for their children.
• 25-35 percent of not-even-getting-by households, discouraged and despairing; whose children were growing up desperately poor; who asked themselves at the end of each month, "Can we afford the rent, or groceries, or power?"

5. In tracing the changes in the household profile of the region, through the last 50 years, we hope to identify the housing measures that best promote social balance and engagement.

CAUSES OF SOCIETAL IMBALANCE & DISENGAGEMENT

6. In the period prior to 2012, a number of social and economic issues impacted negatively on all New Zealanders. Among them the following had a major impact on the quality of living in the region:

• Falling real incomes: Auckland became a low-wage zone as ordinary householders found themselves squeezed by the effects of a steady decline in Aotearoa's once favourable terms-of-trade with the rest of the world. At the same time, employers found their profitability squeezed by international competition from other low-wage zones.
• Rising living & transport costs: The steady rise in fuel and energy costs combined with the scarcity of affordable housing in the central Auckland region.
• High land costs: Attractive gains from the 'unearned increment' on investment in property inflated urban land values.
• Dominance of market provision: The market determined the mixture of private cost-rental and subsidised state-rental housing with the private sector leading rent setting. State-sponsored accommodation subsidies were targeted through means-testing the neediest. Social housing became stigmatised.
• Growing affordability gap: In 2005, state-underwritten, Kiwi Bank loans sought to bridge the gap between income and house prices for low-income, first-time house buyers. But the gap widened faster than this measure bridged it!
• Environmental issues: The full cost of GHG emissions began to be charged to the polluter after 2005.

SOCIAL & ECONOMIC EFFECTS OF THESE PRESSURES

7. As Auckland commerce and industries grew, there continued to be demand for workers. The pressure to attract workers coincided with a sharp decrease in the affordability of housing in the central Auckland region. Thousands of middle-income earning families were affected - the likes of school teachers, police, firefighters and public servants, were increasingly forced to live outside the communities they served.

8. Employees were progressively forced to move further from their jobs so they could enjoy decent housing or they could better aspire to home ownership. It meant longer commutes and spending a larger percentage of income on transport. Employers too, came under salary and benefit pressure to attract skilled workers.

9. Families, forced into expensive rental housing, added to spiraling social-cost increases. With insecure tenure, household instability increased, adding strain on community and government service agencies.

10. Anti-social behaviour, associated with social exclusion and disengagement, worsened. Pockets of privilege lived uneasily beside areas of growing deprivation. Crime hastened the social fragmentation, threatening the quality of life for all Aucklanders. The region began to lose it's economic edge.

SOME EARLY MEASURES TO PROVIDE AFFORDABLE HOUSING

11. The need to actively promote balance and engagement centered around discovering better ways to provide access to affordable housing; to assist first-home buyers; and to increase the capacity of families to move towards stable household tenure.

12. As this awareness grew, the more significant developments were:

• Community housing providers began to organise: In early 2007, community-owned building companies proposed which involved the use of industrial-production methods to lower construction costs. The aim was to multiply the available stock of affordable housing.
• A new political will harnessed: The newly elected government in 2008 ( a National-Maori Party coalition) acknowledged the need for a new approach to the provision of housing and set 'good-housing-for-all' as their social priority. The government began to sponsor pilot community-based, housing-delivery projects whose design met strict environmental sustainability criteria. The housing providers' performance had to match qualifying conditions for the grant of suspensory loans in the implementation of these projects.
• The application of new technologies: for micro-generation for households.

13. As alliances began to be built around a new-found imperative to co-operate - government, local authorities and communities began to develop partnerships to consider affordability issues with a new seriousness.

14. The new alliances underlined that social democratic movements (with agenda to protect workers' rights) and the environmental movement (with agenda for life-stylers with social attitude) needed an "all-of-community" appeal to drive the radical change of direction required.

15. This climate of helplessness in as social disengagement and economic imbalance worsened, a way began to open for third-sector contributions to meeting the societal needs. The community sector's potential was the missing element in previous attempts to address structurally, the problems caused by economic and social decline brought on by the housing and energy crises. The community was the missing element in a structural solution to this threat of economic and social decline. Such an approach was found to appeal to deeply-felt yearning for fairness in the popular mind.

16. This yearning - which found expression in the phrase - &quuot;traditional community values," took shape around a nation-wide education programme, rather like that which the government in the 2006 called, "Kiwi-Life Courses," for first-time home buyers, but in this instance it was driven by community-based housing providers. The programme promoted practical and sustainable living solutions.

MORE ABOUT THE NEW MEASURES

16. The provision of affordable housing in the early 2000s depended on refining the following ideas:

• A form of 'co-operative housing tenure': The winning of a wider acceptance of the concept that tenant-owners be jointly and severally responsible for the assets and debts of their community-housing organisation.
• A regional Housing Charter: Mooted in early 2005; work began on developing an Housing Charter between government, local authorities, the private sector, and the community sector. The proposed compact was to set as a social goal, the creation of a significant stock of affordable houses for the region.
• Acceleration of research into appropriate technologies: Micro-energy generation was seen as a right for all householders as new technologies made it realistic to install alternative ways of generating power at the local level, offering the prospect of lowering of significantly GHG emissions as solar and wind power generation became more common.
• The development of urban-equity farms: Begun to combat high land costs by using a shared-equity approach to the provision of housing - through the use of chattel mortgages on houses rented on communality-administered land.
• Introduction of industrial production to supply affordable housing: Feasibility work, started in the 1980s, was now applied to the construction of housing components, using appropriate materials.
• Development of a community-based infrastructure: The supply of appropriate building componentry as well as sustainable financial modelling had begun in small-scale, under-funded pilot schemes. Now there came a new willingness to consider up-scaling and properly funding such schemes.

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Phase II [ 2012 - 2030 ]
COMMUNITY CONTRIBUTIONS BECOME
SIGNIFICANT FOR HOUSING AUCKLANDERS

INTRODUCTION TO THE 2020s

17. If the early 2010s were characterised by the spectacular and messy failure of the housing market, it was the ending of the availability of cheap fossil fuels that provided the greatest impetus to develop new affordable housing measures that characterised the beginning of the 2020s.

18. In 2005, the all-time global peak of oil production had occurred. In the years immediately following peak production, it became more apparent that the rate of decline in oil and gas production began to have an accelerating effect on all aspects of life in the region. Choices taken in the twentieth century to create a drive-in utopia in Auckland, now came to be a terrible liability. Even the staunchest defenders of that failed dream began to admit the obvious.

19. With the decline of the availability of cheap fuel, industrial agriculture started to fail. New Zealand's ability to create wealth through its agricultural production faced the added pressure of being isolated from it's traditional markets. This 'locking-in' the country to a low-waged economy occurred at the same time that living costs continued rise.

20. Social fragmentation grew as incomes stayed flat. The gap between the lower-waged majority of households and their ability to afford the housing they lived in, continued to widen.

A MORE STRUCTURED RESPONSE BEGINS

21. As mentioned previously, the first-term 2008 government had been forced to address the issue of economic & social decline with a new urgency - as increasing lawlessness and spiralling social costs threatened many of the regions in New Zealand.

22. Auckland as a priority region, faced the worst and highest concentration of this lawlessness. It also lacked the means for social reconstruction on the scale needed. But in early 2011, with government subsidies, the regional local authority agreed to fund up to 100 percent, community building companies, supplying them with suspensory loans. These loans were granted on condition that: appropriate building technologies were adopted; that mutually-agreed housing performance targets were achieved; and that provision was made to guarantee coherent career-paths for a new class of community workers within the reconstruction projects. (This latter condition also sought to address a growing skill-shortage that had plagued the building industry since the early 2000s).

23. Another measure to assist, was an earlier decision by the 'Super-Three' Auckland Regional Authority (2009) to introduce inclusionary zoning requirements on multiple-unit private sector housing developments. Thus private housing providers were obliged to make a minimum of 10 percent of their new housing construction sites available to community not-for-profite housing providers for affordable housing, as a condition of gaining building consent.

24. This move provided the impetus for new partnerships with community, not-for-profit building companies to provide the housing. They faced the same rising infrastructure, land and compliance costs that faced the private and public sector housing providers, but still lacked resources to counter the increased demand to scale-up their services, to be able to fully meet this increase in demand.

25. Late in 2015 agreement was struck, between the new government (a Labour-Maori-Green Party coalition) the Super-Three Local Authority and community housing providers, for the establishment of an Auckland Regional Housing Charter, setting as a societal goal, the creation of a minimum of 5 percent of housing starts be in the community, not-for-profit sector by year 2030.

26. Trial projects begun in 2008 had tested the feasibility of "urban equity-farms." Such a housing concept, was seen to allow participating households to accumulate assets though a forced-saving scheme. This was possible once the householders voluntarily established a reliable saving record and began to build up housing credits while still renting their house sited on community-administered land. Against the savings in the form of house-credits, they were able to later move to purpose-built house that met the family's specific housing needs. In the "starter houses" they learned about energy-cost savings - that is, about minimising their energy use and managing micro-generation plants - thus readying them for sustainable living practices in the future.

27. This development showed the potential for community-based housing schemes to provide the conditions where surplus energy could be used to supply the local power network. It also offered potential to enhance benefits through cooperation to maximise IT opportunities to work from home and reduce transport costs and generally to have a positive impact on the social fabric of their local community.

28. Private sector housing providers continued to compete with the residual and rather down-sized public housing sector, to build intensive housing developments on available land within the region. The mix of public and private provision was proving more and more unsustainable. Many of these private housing developments continued to be leased by HNZC for a guaranteed market rental, while the state welfare agency rental subsidies increased substantially. The state housing agency progressively devolved management of the remaining state-owned rental stock to tenant-run social housing organisations, who acted as rent-collectors, without offering other tenure options apart from the traditional rental one. Many of the state-rental, dominated areas within the region experienced total collapse of civil society during this period.

29. HNZC expanded it's social housing rental stock at a reduced rate as high land costs and steadily rising compliance and building costs eroded it's budget to build new dwellings and rendered it less able to keep pace with rising demand for affordable housing.

30. The community sector housing providers initially depended on community building companies delivering a lower-cost structure for new housing, created a steadily growing and self-sustaining income-flow, thus enabling them to expand their provision of housing.

31. There was lesser reliance on Kiwi Bank as a Regional Revolving Building Fund grew, using the increasingly common, "urban-equity farm" concept based on the construction of micro houses, sited on borrowed or leased rental land. Further refinements of the concept to local conditions in the region, made it increasingly important to build more intensively without sacrificing affordability. Another aspect related to affordability was the progressive introduction of sophistocated and cheap-to-install micro-solar and wind-energy-generating plants. These turned the households into contributors to rather than drawers from the local energy-supply grid.

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Phase III [ 2030 - 2049 ]
HIGH LEVELS OF ENGAGEMENT & BALANCE
REALISED THROUGH AFFORDABLE HOUSING

INTRODUCTION TO THE 2030s

32. Significant developments in the next period were the exhaustion of cheap fossil fuels; the increasing expensiveness of transport and electricity; a greater focus on the local region & the development of community in a more intensively-housed environment; and a significantly expanding community-based housing movement with the not-for-profit sector's share of new housing startups steadily increasing.

33. These changes fully justified earlier moves to establish of community-based building companies. They made possible some significant contributions of the third sector's realisation of the social goals set in the region's first Housing Charter as it ran it's full course in 2030. The Charter was rated as successful. The community sector was by now taking a small, but steadily increasing, share of new house-starts.

34. 2030 was also the year when the electorate delivered a new government to the parliamentary benches (a Green-Party with sufficient numbers to rule in its own right).

35. The exhaustion of cheap fossil fuels had justified the provision of positive sustainable energy capacity investment in the low-income households.

36. Social engagement and economic balance had improved in the instances where people chose to participate in community not-for-profit schemes.

THE EFFECTIVENESS OF MEASURES
TO DELIVER AFFORDABLE HOUSING

37. Although legislation was passed as early as 2008 to create an energy-neutral state, the community housing sector contributed significantly towards advancing to this goal by pioneering the common use of sustainable energy generation at a local level. While the savings initially were small, the efficiency and the sustainability of measures were to become a progressively more powerful long-term investment for good. This helped relieve households from the short-termism that formerly bedevilled the economic and political cycles.

38. The shortage of housing sites for development, meant intensive design and construction briefs, which required professional inputs. By now the community housing sector had gained a degree of sophistication and was able to supply the needed services from within it organisation.

39. A reduction of social costs began to be associated with participant households. Crime rates and social mobility problems reduced. Education and health gains became apparent, marked by a decrease in sickness beneficiary rates among the co-operatively housed.

40. Government and local authorities became increasingly supportive of affordable housing design and planning which included positive energy-ratings, enabling them to claim carbon-trading credits.

41. The beginning of the maturing of the new measures, social engagement and economic balance at a high level in the not-for-profit influenced sector, meant that the pathway towards achieving the goal of balance and engagement had been realised in part by the production of approximately 9 percent of new-house starts supplied by the community not-for-profit companies.

42. In the process an awareness had become in-bedded in all New Zealanders that an ethical approach to the provision of housing is both realistic and sustainable. Not-for-profit building companies had by now a proven record of substantially lowering construction costs. They were now using industrial-production methods, built housing components off-site; and used specifically trained workers to assemble the houses with a minimal of construction delays.

43. The refinement of the provision of micro-house designs which were used for thousands of "starter houses" sited on in-fill sites was by now well established. They incorporated features such as micro-sewerage systems (which avoided overload of already stretched infrastructure services).

44. The development of a construction phase that offered new employment and career opportunities for a new class of community house builders.

45. The provision of a choice to enter a "starter house," which gave those who had previously been unable to access the path towards home ownership, the chance to accumulate an asset and/or start on the process of gaining a form of home ownership through capitalising on the housing-credit system.

46. The existence of such houses allowed the low-waged and beneficiaries to reduce on-going living expenses though the installation of efficient solar hot water heating and other solar-sourced energy generation. Increasingly, participant families' needs were met by the wealth-generating sale of surplus energy.

47. The general acceptance of the steps-to-equity involved in participating in an "urban equity farm" removed the main burden of the initial cost of land from the ownership package and the support of the community allowed a radical lowering of on-going living costs by the introduction of sustainable local energy production technologies. These innovations introduced the real possibility that borrowing could be reduced dramatically.

48. As new sources of finance became available to not-for-profit building companies, a beginning was made to develop a second-phase permanent houses. Families progressively saw an advantage of qualifying through successful completion of a probationary period, of entering a shared-equity communal stage in the community based housing schemes.

49. A savings goal - established on an individual household basis - where asset-accumulation applied and lower land costs were offset by a general lowering of incomes through this period.

50. In the urban situation the wisdom of the government partner getting out of housing provision and giving increased responsibility to community not-for-profit housing companies to use the HNZC residual land-anks was proving to be a more efficient use of public assets.

51. The outcome of the growth of the contribution of the community not-for-profit sector was to the realisation of the social goal of the first 15 year Housing Charter and became the blue-print for a second Housing Charter, which set out a new bench-mark for new affordable housing starts in the region at 12 percent of the current annual total! And the existence of a stock of available and affordable community-based housing was being commonly credited now, as putting downward pressure on house prices in general, while at the same time offering more housing choices to low-income households.

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CONCLUSION

52. This review is made soon after the population of the greater Auckland region exceeded 2 million souls. In the 50 years since 1999, more than 320,000 new dwellings have been completed to accommodate the region's population increase. More than 70 percent of these new dwellings have been absorbed within the urban boundaries that existed in 1999.

53. By using affordability of housing produced over the period we have been able to apply this category as the means of assessing the positive impact of community-based housing provision on the levels of engagement and balance in the Auckland region over the last 50 year period.

54. Our purpose in reviewing these measures was to focus attention to a causal link between access to affordable housing and the level of social engagement and economic balance enjoyed by Aucklanders.

55. In the process of review we have drawn attention to the reality that such balance and engagement did not occur automatically and without struggle. Our review confirms that the beneficial effects of third-sector inputs were beyond the capacity of a simple supply-demand mechanism like the operation of the housing market.

56. Amidst many counter-productive and potentially disabling factors, the evolution of sustainable and practical housing delivery programme still has room for expansion and holds promise for going into an uncertain future.

57. Although the broad profile of Auckland households has changed little during the last fifty years, there is a new optimism among the low-waged and beneficiaries that with the existence of the third-sector not-for-profit housing providers, there is an element of choice before them, that was absent in earlier periods. In other words, a note of sanity has returned to the housing market.

58. Our review had no other purpose than to draw attention to this sense of an enhanced social engagement and economic balance that has entered the Auckland region. If our review succeeds in highlighting the relation between the way new dwellings are delivered and the qualities of engagement and balance in a society, then it has served a useful function.

Joshua Suddens ( January 2049 )

[ Joshua Suddens, CEO of the Just Housing Foundation, is the grandson of Liam Murphy - a noted community economist who was an early advocate for third-sector housing initiatives in New Zealand in the early 1970s. ]
 
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