Simon
Louis Opit, Te
Kunenga ki Pūrehuroa – Massey
University
The government’s recent
NZ$69 million investment in the contestable Flexible
Fund, the main funding source for iwi and community
housing providers, prioritises social housing and affordable
rentals.
While the investment is welcome, the
policy risks overlooking another role these organisations
can play: helping working renters move towards home
ownership.
These households sit in the difficult
middle of the housing system. They earn too much for
social housing, but are unable to save a deposit or buy on
the open market.
Many face high rents, insecure
tenancies and repeated moves when landlords sell. Recent research
found a quarter of private renters spend more than a 40% of
their disposable income on rent.
A growing number
of community housing providers now deliver affordable home
ownership models, including shared ownership, rent-to-buy
and community land trust arrangements.
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These
schemes increase tenure security and reduce housing costs,
allowing some households to achieve home ownership that
would otherwise be impossible and helping others reach
that goal sooner.
Previously, the $400 million
Progressive
Home Ownership Fund helped expand these models by
offering interest-free loans to approved providers
delivering rent-to-buy, shared ownership and leasehold
schemes. But the fund was closed mid-2024 and is no longer
accepting new applications.
Since then, policy has
shifted towards increasing open market housing supply
through the government’s Going
for Housing Growth programme.
If affordable
ownership is left out of the Flexible Fund, the government
may miss one of the few pathways to home ownership available
to working renters locked out of the market.
To
investigate why and how much these models matter, we interviewed
households across Aotearoa New Zealand. We found home
ownership schemes can make a significant difference but need
careful and transparent design.
A place to call
home
Across the interviews, households described
these schemes as a way out of private
renting.
Tiana and her young family entered a
progressive home ownership scheme in Rotorua after severe
housing insecurity. They had moved for work, but the rental
they had lined up was leaky and substandard. With nowhere
else to go, they ended up in emergency
housing.
While considering their options, Tiana
heard about Habitat for Humanity’s progressive home
ownership programme. It offered a secure home, beginning
with a rental phase designed to prepare them for ownership.
Their new home was warmer, cheaper to heat and healthier for
their children.
Stepping into this
house that day was emotionally huge […] It’s a relief to
actually own a piece of land […] to say to your children
and grandchildren, that’s where our journey
began.
For others, affordable home
ownership meant staying in the communities where they lived
and worked.
The Queenstown Lakes Community Housing
Trust runs one of Aotearoa’s earliest home ownership
schemes. It is a community leasehold model where households
buy the home but pay a small ground rent for the land,
reducing the upfront cost.
Lucy and her children
had been living in one of the trust’s affordable rentals
while waiting for a home. By providing both an affordable
rental and a home ownership pathway, the trust gave them a
way to remain in their community, where buying on the open
market would have likely been
impossible.
I love Arrowtown,
it’s our community, it’s our life […] if I wasn’t
that connected to the community and the place, maybe I would
look elsewhere.
The edge of
affordability
Affordable home ownership does not
remove all risks. Households still face mortgage payments,
rates, insurance, maintenance and rising
living costs.
Daniel’s experience shows how
good support can make those risks manageable. Before
entering the scheme, his young family were living in an old,
damp rental in South Auckland. Owning seemed impossible.
Although Daniel worked full time, he had debt and a poor
credit history.
Instead of turning him away, the
New Zealand Housing Foundation helped the family with credit
repair, debt repayment, KiwiSaver and financial advice. They
were warned their budget would be tight, but the result was
a warm, mould-free home in a quiet neighbourhood where his
children could play safely.
Kevin’s story shows
why clear processes and careful design are key. After a
decade of rising rents, ownership felt urgent. He bought
into a shared equity scheme near the top of the market. The
home was good quality, but a tight fit for his family of
four children, and the location left him with long daily
commutes to school and work.
Kevin felt stuck in a
house he could barely afford, unable to exit without taking
a significant loss. He was no longer sure the model worked
for his household.
Everything like
groceries and food keeps increasing. We’re not actually
saving any money […] so, I’m not going to buy more
shares.
These stories show
households need careful affordability testing, transparent
pricing, financial coaching and honest conversations about
whether a particular home, location and ownership structure
fits their long-term needs.
This is where the
Flexible Fund risks becoming too narrow.
Community
housing providers are not just social landlords. Many
already help households navigate the difficult space between
renting and full ownership. The Progressive Home Ownership
Fund built that capacity, but letting that expertise fade
would be a missed opportunity.
New Zealand needs
more public housing and affordable rentals. But it also
needs pathways for working renters who may never reach
ownership without support.
Done well, affordable
home ownership can offer what private renting often can’t:
stability, healthier homes and a stake in the
future.
This research was carried out in
collaboration with James Berghan (Te Wānanga o Aotearoa),
Els Russell (University of Otago) and Ian Mitchell
(Livingstone and Associates).
Simon
Louis Opit, Public Health Researcher, Te
Kunenga ki Pūrehuroa – Massey
University
This article is
republished from The
Conversation under a Creative Commons license. Read the
original
article.
