Action helps people buy affordable houses
There are innovative ways to make housing more affordable for people. Carly Thomas spoke with two people who are putting their words into action.
We all do it. We talk about issues that concern us and that concern the nation.
We talk , and we sometimes worry but , most often, we walk away and return to the busyness of our lives.
But there are some people who do something.
These people get stuck in to bring about change.
Manawatu's Darren and Cheri Birch have done this.
The lack of affordable housing in New Zealand is something that really concerns them, as does the number of people without a place to call home.
Discussion turned into Homes for People, a Palmerston North-based response to the growing housing need in provincial New Zealand.
It took them five years, but an empty plot of land is about to become six homes.
And those homes, says Darren Birch, will be for people who need them.
"There are people in our community who others look down on for one reason or another and think 'you should have helped yourself, you should have made better choices'.
"We are pragmatic about that perception and, for us, that is just an obstacle – it doesn't have to be the end of the story."
Homes for People allows a house to be bought through shared equity ownership.
In a nutshell:
* Someone who has been struggling to get on the housing ladder purchases the share of the home they can afford.
* The remainder is owned by Homes for People.
* The mortgage is proportionally smaller than is ordinarily needed to purchase the same property at market value.
The homes they are building will be warm, safe and built economically. They are made possible by trade, supplier and professional service providers offering pro bono work and charitable donations of time.
Birch says they are trying to create a genuine investment, a real reason why people would want to put their hard-earned equity into the programme. They are trying to create a community, "a mum and dad bank, for people to be able to cross the barrier of entry to get into their own home".
There is an affordable rental programme as well.
The long-term stability of a Homes for People rental makes it possible to save a deposit while renting and low-income households are helped with managing their finances, so they can afford to buy the home after an agreed period of time.
Birch says it's a change of thinking.
"If you could manage, let's say, an extra $50 on your mortgage each week, then you could loan about $50,000 at the moment. With that money, we would agree terms. We could complete $170,000 worth of housing. Then you would get your money back. You would be using your earning capability to assist the wider community.
"We could break the back of the crisis that we've got at the moment if 0.2 per cent of the equity in our housing market was loaned for new development. That would mean that from every $350,000 home, if people loaned $700 from all those households across the city, there would be $20 million , which would enable us to provide housing."
Cheri Birch says it's a way for people who have some equity and a social conscience to help make a difference with their money while also getting a safe return.
"This isn't a financial issue. This isn't because we don't have enough money. It's so easy to think that it's because someone is poor or that our society is poor. And we decided that we weren't going to wait for the Government to solve this problem."
Both political parties made their pre-election housing announcements this week, with Labour leader Jacinda Ardern laying out her party's intention to build 149 homes on vacant land in Palmerston North.
Social Housing Minister Amy Adams and her associate minister Alfred Ngaro also put out a statement, saying National would build 70 new social houses and 30 short-term transitional housing places.
Darren Birch says the real challenge is the long-term question of how the Government intends to work with private and social sectors.
The Birches have come to this point of action through three decades of working and living with people who cannot access the resources required to be homeowners.
They often open their home for people in need and have been involved in running homes for people who have come out of drug rehabilitation, and another for troubled teenagers.
Cheri Birch says they have seen from their own experience how this model can work.
"We have been involved in several situations where people needed a home and we had the resources and the skills to be able to provide that home. One was a family member who was re-entering the housing market and we were able to use our equity to support him."
He had been living in a garage in Tauranga and, after getting a job in Palmerston North, decided that's where he would like to settle. At 55 he was in the situation where he had a little bit of money put aside, but not enough for a deposit.
"We thought, well, if we buy a house, then he could pay the mortgage and potentially we could work towards shared ownership. And, when, after a number of conversations and us persuading him that we really were serious about this idea, he agreed to look at a house with us."
They found a house, he has moved in and a man who thought he would have to rent for the rest of his life has an achievable point of focus. He has a home that will one day be his own.
"We accidentally became landlords with assisting people into housing situations and it worked, so we started to put out our feelers around New Zealand. We recognised there was a need not being recognised by government and not being fulfilled adequately by council.
"They are doing some tremendous stuff, but it's not to the magnitude that we need in our community. There is need for more and this is our response."
Darren Birch says that if a 35-year-old got into one of the homes being built, "by the time they are 70 they will be over $350,000 better off in terms of equity and cash than if they had rented their entire life".
"And that's got to be better for the whole of society."
The Birches have worked closely with Housing New Zealand and the manager for the central region's portfolio Graeme Broderick says they support the initiative.
"Alongside agencies such as ours, it's great to see the trust supporting low-income people and families into affordable housing. Darren, Cheri and other trustees are very passionate and have worked hard to get the project off the ground. We're pleased to have been in a position to support them to help make it happen."
Palmerston North mayor Grant Smith says Homes for People has a definite role to play in the overall picture of affordable housing in Palmerston North.
"Palmerston North doesn't have a huge amount of providers outside of Housing New Zealand and ourselves [Palmerston North City Council] to fall back on, so having the Birches' effort, although it's small, it's a start and I know that their aim is get people off dependence as well, which is really good."
For more information go to: https://www.homesforpeople.co.nz/