|
Comments
on the Bill
NZACAB
supports the intention of the Bill to remove Housing New Zealand's
(HNZ) profit motive and to introduce income-related rents for HNZ
tenants. Indeed, NZACAB has consistently opposed, in submissions
to this Committee in 1992 and 1998 and in correspondence to HNZ,
the introduction of market-based rents for HNZ tenants and supported
the inclusion of social objectives as the principal objective for
HNZ.
A
significant proportion of the people that use the services of NZACAB
are on low incomes or access income support. NZACAB feels strongly
that these people are entitled to affordable and good quality housing.
Income
Related Rents
NZACAB
has consistently advocated that HNZ rentals should not be more than
25 percent of tenant's income and we welcome the introduction, in
this Bill, of an income-related rent policy.
HNZ
tenants, from 1992 faced increases in rents based on market-rates;
many had earlier faced decreases in income support due to the 1991
benefit cuts. Both policies resulted in a cutting of household discretionary
income. Research has shown that decreases in household discretionary
income, such as that imposed by rent increases or benefit cuts,
result in families spending less on goods and services such as food
and healthcare. Conversely, increases in discretionary income have
opposite and beneficial impacts on spending for household goods
and services (Michelini, 1999, "New Zealand Household Consumption
Patterns 1983-1992, New Zealand Economic Papers 33(2), December
1999, 15-26).
The
Ministry of Health's National Nutrition Survey found that many low
income families were more likely to report:
- their
household could afford to eat properly only sometimes;
- 'food
runs out' because of a lack of money;
- they
'eat less' because of a lack of money;
- 'variety
of foods' were limited because of a lack of money;
- they
were more likely to be in a position where they had to reply on
others to 'provide food and/or money for food';
- feeling
stressed because of not having enough money for food, and;
- feeling
stressed because of not being able to provide the food they wanted
for social occasions (Ministry of Health, 1999, Taking the
Pulse: The 1996/97 New Zealand Health Survey).
In
addition, key results from research by The Family Centre examining
the effects of relative poverty on household consumption found that:
- 44
percent of low income families pay 40% or more of their income
(after tax) on rent or mortgage; and 25% paid half of their income
or more;
- 24
percent of those interviewed said they could not afford to buy
essential food items most times when they bought food, and;
- 56
percent of all families had members who did not visit a doctor
when they needed to because of a shortage of money (Waldegrave,
King and Stuart, 1999, The Monetary Constraints and Consumption
Behaviour in NZ Low Income Households. The Family Centre Social
Policy Research Unit, Lower Hutt).
Our
client case experience indicates HNZ's move to market-related rents
has been unaffordable for many people. NZACAB experienced a 14 percent
increase in our enquiries from people looking for domestic rental
accommodation and a 17 percent increase in our enquiries for emergency
housing assistance in the first year of the introduction of the
1992 Housing Restructuring Act. There has also been a consistent
increase in requests for practical and emergency assistance (especially
food parcels) and for budgeting advice since the early 1990s.
Some
typical situations from our case experience are:
A
couple with six children had got into financial difficulties when
their HNZ rent increased by 71 percent. This was compounded by
the fact that their accommodation supplement was not paid out
until several months after they applied for it.
A
person on a low income with one child had their HNZ rent increase
by nearly one third. Rent was half their income and there was
insufficient money for food.
An
elderly person with a disability was having difficulty with his
finances. His only income was his benefit. His HNZ rent had just
increased to market rates. He had about $20 per week to meet all
other costs like clothes and doctor bills. He had to sell some
of his furniture so that he could meet his day to day expenses.
One
West Auckland Bureau located in a low socio-economic area received
many enquiries from people having problems paying their rent and
then all other costs of living. Many clients said that they were
unable to pay their power bills.
A
couple on the Community Wage had a sick child in hospital. Extra
costs meant they did not have enough money for food or for transport
to visit the child.
Removal
of the Profit Objective
NZACAB
also welcomes the removal of HNZ's profit objective and hopes this
will make HNZ a better, more compassionate and responsive landlord.
The profit objective has influenced the way in which HNZ deals with
its tenants. In many cases NZACAB has seen, for example, HNZ has
been quick to evict tenants with rent arrears. HNZ has also been
reluctant to provide housing to those people with previous credit
difficulties. For example:
A
client, solo parent, chose to move out of her house she was renting
because the rent was too high to be covered by her benefit. There
was not much left over for bills or basic costs of living. The
Client then contacted HNZ but was told she was a 'bad credit risk'
and would not offer her a house.
NZACAB
also feels that the profit principal has made HNZ a bad example
of leadership as a landlord. This is illustrated in the complaints
received by NZACAB from tenants regarding maintenance and repairs
not being done by HNZ (1998, Housing Issues in Auckland: Pilot
Study for Ministry of Housing, NZACAB, Wellington):
A
couple had been trying to get maintenance done; there were holes
in the back door, windows that did not close and a bedroom that
was not re-papered after mould treatment. The husband also had
to lift his wife's wheelchair up and down stairs because HNZ would
not put in ramps.
A
woman who had lived in a HNZ house for 43 years had problems with
recent renovation and repair work. The bathroom had been renovated
five months earlier and the shower had not worked properly. She
had rung HNZ repeatedly but they did not respond. In addition,
she had had to pay for a new stove after waiting six months for
HNZ to supply a replacement. Compounding maintenance problems
was an increase in rent.
In
both cases action by HNZ commenced only after an approach by NZACAB
on behalf of the client. NZACAB feels that HNZ should be a better
landlord than other private-sector landlords and should therefore
provide an example of leadership for landlords. This is because
HNZ should be more aware of its roles and responsibilities, and
as a matter of course always meet its obligations as a landlord.
Housing
Quality
While
we support the intention of the Bill to provide more affordable
housing through HNZ, NZACAB would like to see this amended to include
also the provision of quality housing to those in serious housing
need.
NZACAB
acknowledges the increase in funding to EECA for its partnership
programmes with communities to improve insulation in housing of
low income families.
Further
Considerations for the Committee
In
NZACAB's experience, problems faced by those with serious housing
need and other welfare issues is further compounded by people not
receiving their full Work and Income entitlements. For example:
A
client approached CAB for budgeting advice. The client was a married
man with two young children and was earning $348 a week. He was
not receiving any entitlement such as the Community Services Card
or Accommodation Supplement.
NZACAB
sees that this issue, which is broader and more widespread than
housing need, must be addressed by this Committee in all legislation
involving Work and Income entitlements.
|
![To see what social issues we are currently working on [through advocacy and media]](../../images/socialp.GIF){kind=small}
