Homeownership is dead, long live progressive homeownership
Community housing sector wants increased funding for programs proven to help families with fewer resources buy their own homes | Content partnership
Home ownership has always been considered king in Aotearoa New Zealand for very good financial, cultural and legal reasons.
But the current housing system is at a point where home ownership isn’t about ‘making the dream come true’, it’s more of a waking nightmare as opportunities slip further and further out of reach, while we let’s create a class of property assets and equity – not the majority in case of severe rental stress.
As the headwinds of spiraling costs and rising interest rates hit many current and future homeowners, it may seem that the dream of home ownership is dead.
But all is not lost. For years, many housing experts — including those with 30 or more years of institutional memory in the community housing sector — have called for increased funding and support for progressive homeownership. .
Gradual home ownership consists above all in supporting home ownership over the long term thanks to supported financing and continuous tailor-made support. It is a proven model that the community housing sector has offered since the early 1990s and an absolutely essential piece of our housing puzzle.
In this model, people are more than a number – they are future potential – and the investment in them and in the home they can call their own is a long-term investment.
Homes for essential workers
One of the primary ways progressive homeownership supports and enables communities to meet the housing needs of essential workers, who are often woefully underpaid compared to house prices.
Queenstown has suffered the dubious honor of being ahead of the curve of the housing crisis, with a critical period taking place around six years ago when large numbers of essential workers simply could not find a roof to put themselves over their heads, including during particularly cold periods. winter and particularly high prices of 2015/2016.
Queenstown Lakes Community Housing Trust, a leading community housing provider, has developed an innovative ‘rental’ model to address this ‘missing middle’ market for essential workers, which is currently being rolled out elsewhere in the country, including by Bridge Housing Trust in Hamilton.
The model separates the land value from the house. All land costs, such as civil works, are covered by the trust, keeping the buyout price more affordable for owners. The quid pro quo for this is that the trust keeps the land, with owners leasing the land on which their new home sits for a term of 100 years. The Trust has made a commitment to the Council to hold this land in perpetuity, which means that although the household cannot obtain windfall gains if they decide to sell, they have safe and affordable housing in the community. to which he offers so much.
Beyond the mechanics of being able to afford the house, progressive homeownership recognizes that being human often means there are ups and downs in life. A commitment to helping people succeed is built into the approach of the community housing sector, even if they don’t necessarily check all the boxes from the start.
Funding to support scale
Despite the power and promise inherent in the progressive homeownership model, Queenstown Lakes Housing Trust and others like Habitat for Humanity New Zealand, the Salvation and Army and the NZ Housing Foundation recognized that its growth required funding. The “Kiwibuy” campaign they launched successfully launched the Progressive Home Ownership Fund, a $400 million fund run by the Department of Housing and Urban Development.
The fund is designed to complement Kāinga Ora’s First Home Partner program and provides up to 50% capital, repaid interest-free by the housing provider over 15 years, effectively meaning providers can support families who are in able to pay off a $400,000 mortgage on a house with a market value of $800,000. There is also a dedicated Maori pathway, Te Au Taketake, which is specifically set up to support tangata whenua-led approaches to progressive homeownership.
Partner to create courses
The fund has had its ups and downs, but it has clearly been a key catalyst for the growth of progressive homeownership as an option. It is also an important driver for the growth of the community housing sector and its ability to provide suitable housing solutions for individuals, families and communities.
What also emerges from the fund’s experience is that creating homeownership opportunities cannot be done in isolation. Housing providers need the Fund’s capital injection to leverage development finance. We believe government needs community housing providers with expert knowledge of the unique needs of their communities to ensure it reaches the right people. Housing providers need each other to learn and scale innovative models and, more importantly, the people who buy the homes thrive when the housing provider is with them, giving them that essential confidence and opportunity to fulfill their dreams.
How do you integrate these relationships and the traction that has been gained so far?
First, as the organizer of the Kiwibuy campaign, we are committed to sharing knowledge and supporting organizations exploring how they could offer progressive ownership. The main suppliers have learned a lot and want to develop the opportunities for others.
We also need political clarity that the community housing sector has a very important role to play in creating and delivering solutions to our housing crisis.
Part of this political clarity is ensuring that the fund will be extended past its 2024 deadline.
And we need banks like banks to see their role in providing lower-cost financing and other support for progressive homeownership as a model. How do they as system actors look at their role in stimulating supply-side options that are outside the residential box and for purpose rather than profit?
As Roine Lealaiauloto, CEO of Penina Trust, said when his organization was recently confirmed as Pasifika’s first progressive homeownership provider:
“If we want to bring about real positive change in our communities to fight poverty, fear of displacement and ensure that our children in the Pacific do not end up in 10 different schools before going to university, we must work together to build stability through a pathway to home ownership.
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