The government’s plan to increase the private provision of state-housing is part of a wider goal to alleviate the country’s most vulnerable by putting more cash in their pockets, Prime Minister John Key says.
Speaking at his weekly post-Cabinet press conference in Wellington, Key told reporters the government expects to provide more details about its social housing programme in the coming weeks, though a central plank is to lift households’ incomes by expanding the number of people on income-related rents, something he says is much cheaper than simply building more houses. Among those considerations is how the capital raised from house sales will be recycled, who can buy the houses and what form the programme might take
“Over the course of the next few weeks, I think we will be in a position to give you a sense of the programme, how its going to work, what the parameters guiding it are, and what you can expect to see over the course of the next three years,” Key said. “We have made it quite clear that we do want to have more social housing.
The government has come under pressure from opposition policy parties and some community lobby groups over its plans to sell Housing New Zealand stock, and increase the level of social housing provided by third parties.
Key said the current system is not fast enough to response to changing dynamics, and that by increasing the level of people receiving income-related rents, they make “a materially massive difference to those households” by limiting it to a quarter of their income.
Alleviating child poverty was among the issues discuss at Cabinet today, and Key said he wants officials to define the group of young people and families affected, and will seek to deliver “measurable results in areas that will make material difference to those children that’s where our focus is.
Getting more people on to income-related rents feeds into that work, with a large portion of people’s incomes spent on accommodation, he said.
“What income-related rents do is ensure they spend only a quarter of their income on housing. That puts them in a far stronger financial position,” Key said.
Key said the cost of switching 1,000 people on to income related rents was $12 million, as opposed to $500 million to build another 1,000 houses.
“The fastest way for us moving those people out of poverty is delivering income related rents,” he said.