This Is Christchurch: Social Housing Works Best Under Local Authority Control

First published on This Is Christchurch
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In New Zealand we have a perennial debate about the interaction and service distribution between central government and local authority control. This happens because the country does not have any form of state government. Instead, there is one central (federal) government based in Wellington, and two tiers of local government with far less powers and limited delegation from Wellington. As such, Wellington tends to focus on national programmes and policies, with less accountability at a local level for the people who benefit from these programmes and the communities they live in. The value of local authority control is most evident in our public health system where our DHBs have elected membership, and to a lesser extent in the various services provided by territorial and regional authorities. However, in places like the UK where there is no state governance either, the State compulsory education system has long been placed under local authority control in spite of efforts to undermine it or give control back to the central government departments.

Whilst the blog authorship aren’t always big fans of local government administration, and see the need for Wellington to become involved where central governance is clearly in the national interest, such as situations where local governance is clearly incompetent, or where there is significant conflict or turf wars between different local government authorities, local management can often result in more cohesive and inclusive communities that are of greater benefit to all of their residents. This is quite evident in the operation of the social housing network in Christchurch City, although somewhat clouded by a poorly considered amendment to the District Plan severely restricting the requirement for public notification or consultation in any social housing development in the city. Furthermore the new local council social housing system introduced in Christchurch recently with the creation of Otautahi Community Housing Trust means that Wellington funds the construction and maintenance costs of the housing through its Income Related Rents tenancy policies, which for a number of years have been extended to community social housing when they were formerly only available to tenants of Housing New Zealand (Kainga Ora).

In Christchurch, to qualify for Income Related Rent subsidies, the City Council has retained ownership of the properties and leased them to OCHT (subsequently, some ownership of existing and all new properties has been transferred to OCHT). CCC has a minority shareholding in OCHT (49%) to qualify for IRRs. It lends capital to OCHT for the construction of new units. This cost is recovered by setting an appropriate rate of market rental for the properties, which is then received either from the Government through Kainga Ora for tenants who qualify for Income Related Rent, less the amount of rental paid by the tenant, or as the actual rental charged for tenants who are not eligible for Income Related Rent. Hence, OCHT is effectively self funding through the rental subsidies. The debacle currently in Wellington City Council and Nelson City Council over the future funding of their social housing, resulting in the NCC selling to Kainga Ora, shows that other local authorities have not bothered to fully investigate the option taken up by CCC, although there is a caveat in that only new tenancies can access the IRR subsidy. In other words, a transition to IRR funded tenancies could only occur over time as tenancies turn over, and long term social housing tenants could miss out or only be able to access more expensive Accommodation Supplement subsidised tenancies in council funded accommodation.

Local control of major social service schemes such as social housing or health are very important for ensuring these services are as well tailored to local needs and integrated into local communities as they possibly can be. Our experience with our local DHBs has proven the worth of this, albeit there is too much variance of service quality, particularly in smaller rural DHBs because of inadequate central government funding provision. In the case of social housing in particular, CCC has shown itself to have a significantly better community focus than Kainga Ora, due to local political accountability, with more community social service input into the services provided to their tenants. The real issue is that Kainga Ora is a government department run by bureaucrats in Wellington which is a key component of the overall thrust of 20 years or more of Government service level cuts agenda to reduce provision of social services overall. Kainga Ora has the essential task as part of this agenda of providing accommodation for high needs tenants who are transferred into the community from other government agencies (such as mental health or corrections) without sufficient support to integrate them, with the clear intention of reducing the cost to government and transferring the costs and impacts onto residential communities. This is why these communities have mounted and continue to mount strident opposition to Kainga Ora housing developments such as the recent Flagstaff proposal in Hamilton which often involve development of dozens of residential units in medium to high density on single sites. This represents a regressive return to the previous development of large Housing New Zealand estates in parts of urban New Zealand cities which subsequently have become notorious ghettos. What is needed apart from keeping social housing as much as possible in local government control is the Government itself being willing to address widespread concerns over the impacts of its social policies that are not actually making meaningful efforts to address issues such as these, as they have become “too hard” for Ministers.