11/02/21 updated from 20/2/18
Hardly a day goes by without a headline relating to the “housing crisis” – the situation of first home buyers struggling to accumulate a deposit as house prices soar; renters having to cope with increased costs and accommodation shortages.
The rate of home ownership in New Zealand is the lowest it has been in 70 years, dropping from a peak of 73.5% of households in the 1990s to 64.5% in 2018. And the rate is projected to fall even further in the future.
Even though home ownership is higher for older people, they are especially vulnerable if their housing tenure is insecure and if their housing is cold and damp. Renters cannot easily adapt or modify their housing to deal with declining health and reduced mobility. Renters are forced to move more often than owners, especially if they have private sector landlords and tenure conditions are changed. Many surveys have shown that renting in New Zealand is associated with social and economic deprivation. It is the poorer people in any age group who are more likely to be renters.
Some of this will change due to the changing Tenancy Laws. From 11 February 2021, multiple changes to tenancy legislation will take effect. The changes will cover: Security of rental tenure, Changes for fixed-term tenancies, Making minor changes, Prohibitions on rental bidding, Fibre broadband, Privacy and access to justice, Assignment of tenancies, Landlord records, Enforcement measures being strengthened and Changes to Tenancy Tribunal jurisdiction.
The implicit assumption has always been that NZ Superannuation will be sufficient to support a basic lifestyle provided that the recipients are homeowners and have paid off their mortgages by the time they reach the age of eligibility. So falling home ownership and increased renting among older people should be a cause for concern.
In 2008 a report on trends in renting by older people was prepared for the Department of Building and Housing. 1 Its findings have been updated where possible.
· The proportion of people aged 65 years or older living in rented accommodation increased only slightly from 2001 to 2013 – 24% to 26%. This is a lower percentage than for the total population at present (35.5% renters).
· Two-thirds of older renters have private landlords, with the rest renting from central government (20%) or local authorities (15%).
· The number of older households renting from private landlords has been increasing. So this is the dominant tenure type for renters aged 65 plus.
· Nearly two-thirds of older renters’ households consist of one person only and the majority of these are composed by women.
However, based on the 2008 report the projections to 2051 are concerning.
· By 2051 the number of households with a reference person 65 years or older is projected to increase to 820,000, of which 169,000 are likely to be living in rented accommodation (21%).
· Between 2006 and 2051, the number of older renter households in the 65 to 74 age group is projected to more than double. In the 75 to 84 age group it will nearly triple. In the 85 and over age group numbers will grow nearly nine-fold, from 6,670 to 53,885.
· Numbers renting from private landlords will grow from 34,970 in 2006 to 112,260. Those renting from central government will increase by about the same amount, from 10,865 to 40,450. Renting from local authorities is projected to nearly double, to 16,130 households in in 2051.
These figures call for policies to increase the supply of affordable rental housing designed with older households in mind, particularly single (and female) tenants. Can the private sector be relied upon to do this? Concerns are frequently expressed about the quality of housing in this sector, with calls for independent “warrants of fitness.”.
In the past, local authorities received subsidies and low interest housing loans from central government, but both central and local government public rental stocks have been cut and there is considerable concern about pensioner housing rent increases and sales.
It seems there is a role for innovative private and public rental developments, with central and local government, private sector and ‘third sector’ (i.e. voluntary organisation) landlords working together.
Given growing numbers of very frail and disabled older people, rental housing providers of whatever sort need to recognise the need for home-based services and investment in appropriately designed housing, and also that housing needs interact closely with care needs. This means better integration of social support, health care and housing, and changing expectations, values and standards concerning the quality and appropriateness of housing. Innovative approaches to planning and design and increased engagement of users in the development of housing models and advocacy services are required for all sectors of the housing market. It is vital that the needs of renters are not obscured by the needs of majority homeowners and efforts to increase homeownership.