KiwiBuild Reset Announcement and Fact Sheet
$400 million set aside for progressive home ownership products
Minister Megan Woods announced last week that the Government intends to work with the community housing sector and others in the development of a $400m Progressive Homeownership package. The Housing Foundation, an organisation we have supported for many years, warmly welcomes this announcement and looks forward to working collaboratively with the Government and other stakeholders to make Rent to Own and Shared Ownership products more widely available to low- and modest-income households who are currently locked out of the home ownership market.
The Housing Foundation is a core member of the KiwiBuy consortium which is working to advance the affordable home ownership agenda in New Zealand Housing policy. The following statements were released earlier today as part of a KiwiBuy press release reflecting some of the views of that group.
“Through Government working together with the Community Housing Sector and others experienced in successfully delivering rent to buy, shared equity, rent to own and homeownership on leased land programmes, more kiwi households can have the opportunity to own their home”, said Major Campbell Roberts. “This announcement is excellent news and creates the opportunity to make a difference for families in housing stress”.
The Housing Foundation’s Dominic Foote also welcomes the Government Progressive Homeownership announcement. “Every day we see the difference our affordable Rent to Own and Shared Ownership products make to people’s lives. We have the energy to work with Government in developing a strong national programme that will help many more hard-working renting households become homeowners”.
Progressive Home Ownership solutions will also provide support in budgeting, homeownership education and housing advice from the Progressive Homeownership Provider. “The aim is to make the transition from rental to ownership as smooth as possible”, said Campbell Roberts.
This announcement is very good news and while the detail behind the announcement is still to be developed, there is a significant opportunity for the Government and the Housing Foundation to work together to ensure Rent to Own and Shared Ownership products will make a significant contribution to the goal of assisting low- and modest-income renting households transition in to affordable ownership.
Tailored place-based solutions work best
We know from evidence that taking a ‘one size fits all’ approach to housing solutions does not work as housing need differs not only across New Zealand but also within communities. What does work is the application of a ‘place-based housing solution’ approach to meeting housing needs in communities. This is achieved by understanding local housing needs and then responding with housing solutions that will best meet those local needs. This means in some communities, shared ownership might be the missing housing segment; in others it might be secure, affordable rental; in others it could be a combination of both products or something else.
Community Housing capital can be captured, retained and recycled
Our model is very capital-efficient and effective as it is based on delivering quality new affordable housing supply, and then when households fully purchase their homes being able to recycle the capital invested in the homes many times over to deliver more affordable housing outcomes for more families, forever. This is the unique value proposition of Community Housing Providers who are able to reinvest their capital without being required to distribute their profit as a dividend to shareholders.
We have market tested and proven successful products
Housing Foundation pioneered the development of HomeSaver (Rent to Own) and Shared Ownership products in the New Zealand housing market. These affordable pathway products have been specifically designed to assist low-income households transition from insecure, unstable and unaffordable rental tenure towards independent home ownership. The design of these two core products has been very carefully constructed to assist and incentivise qualifying, eligible families to progress towards full ownership of their homes.
Our Shared Ownership product is now recognised by all major banks in New Zealand. We believe it is the gold standard for affordable shared ownership housing products. The success of our Shared Ownership model comes down to the relationship and agreement between the two parties—the household and the Housing Foundation—supported by our banking partners. Because we share a common goal, and measure success in the same way, the outcomes that are achieved deliver a win-win for both parties.
Housing Foundation Progressive Ownership Numbers
- We have 279 households currently in affordable housing programmes and living in their new homes
- 93 (or 33 %) of these are in rental programmes, such as HomeSaver (rent to own)
- 186 currently in the Shared Ownership affordable programme
- More than 150 households who have been through the progressive ownership “pathway” programme and now independently own their own homes
Means that we have assisted more than 400 households into affordable housing programmes that provide the pathway opportunity for secure, stable accommodation and to eventually own their own home.