$75/week for $1m state house

May 1st, 2005 at 12:19 pm by David Farrar

I have no problems with the state assisting low income people with accommodation costs. But we see again an example of why income adjusted rent is a very inefficient way of providing assistance.

A $1m house is providing accommodation for a family for just $75/week. One could help three or four families into accommodation for the money tied up in that one house.

The accommodation supplement assists all low income families, instead of just those who have Housing NZ as the landlord.

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8 Responses to “$75/week for $1m state house”

  1. dave () says:

    As I understand it, those in Housing New Zealand places are not entitled to the accommodation supplement. That is because the Government pays Housing New Zealand the difference between the income-related rent and the market rent for a property. Those who are eligible for income related rents pay no more than 25% of their total household income in rent (up to a certain threshold).

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  2. Sarah () says:

    “Pepper potting” is a fine idea but this is an example of people held captive by the system.

    If they integrate into the Orakei community, send their children to the schools etc and then decide to rent privately they won’t be able to.

    To rent privately they will be forced to leave the area. They are unlikely to be given an accommodation supplement to stay there – they will be told to find more look in other suburbs.

    It seems cruel and unfair to have people living in areas they can’t possibly aspire to. After all if their income related rent is only $75 then there are serious issues relating to their income.

    This is repeated across Auckland but the media etc find Orakei to be such an easy target – and a popular one for the chest beaters who remember life before Bastion Point.

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  3. tim barclay () says:

    Only the Government could provide housing for $75/week for a House worth $1m. Would you? All the time the tax us to the gunnells but they fail to use the money they confiscate wisely.

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  4. Karl () says:

    I suggest they build townhouses on the land, rent one out to someone on a good income, the other 2-3 houses to HNZ tenants.

    However, the issue is – HNZ should be scrapped in favour of a property accomodation supplement.

    $75 a week means they have an income of $300 in the hand – give or take. I do not believe they are not entitled to sufficient supplemental benefits to move somewhere else.

    http://www.seek.net.nz/12

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  5. kiwisan () says:

    The accomodation suppliment alone would simply funnel taxpayer’s money into the hands of landlords and they could charge what ever (probably unaffordable) rent the market found appropriate…this would not achieve the aim of providing affordable housing to people on low incomes.

    Housing New Zealand _does_ acheive this aim through income related rents and probably also through distorting the rental market.

    Its a tried and true system and many of the alternatives would involve more people sleeping under bridges…Weather its appropriate for HNZ to have a million dollar home is another story entirely.

    Mike

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  6. Paul () says:

    Karl, interesting anaylsis, so if you are right it begs the question, why are we housing that lot at all?

    Some of us grew up at 17 and paid rent in student towns without state or parental assistance, why can’t these grown ups look after themseleves too?

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  7. Sarah () says:

    Kiwisan – you obviously haven’t tried to find a flat when relying on the accommodation supplement. We have some nice, tidy flats in the “outer inner suburbs” which are let for below the average for the area. We consistently have people saying that the WINZ have told them to be more realistic and walking away. I shudder to think where they end up.
    I doubt landlords are getting fat on the supplement. I suspect it’s just helping to keep accommodation available for people who are not able, or choose not to be owner-occupiers right now. After all, renting does have some significant advantages.

    The accomodation suppliment alone would simply funnel taxpayer’s money into the hands of landlords

    Kiwisan – you obviously haven’t tried to find a flat when relying on the accommodation supplement. We have some nice, tidy flats in the "outer inner suburbs" which are let for below the average for the area. We consistently have people saying that the WINZ have told them to be more realistic and walking away. I shudder to think where they end up.

    You have to remember that the business of letting out property comes with some significant financial costs and that it’s a business, not a charity. When owner-occupiers are hurting because of interest rate increases, rates increases etc you can be sure the landlords are too. While some may not hesitate to issues a 60 day notice of rent increase many others try to put it off, or are obliged to wait because they can only issue a rent increase every 6 months.

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  8. sally () says:

    My mother is a school teacher at a low decile Eastern suburbs school – she has far too many stories of her pupils families who have rorts going involving Housing NZ homes. While some tenants are transparent and honest with their declared incomes and therefore subsequent rent paid, other ‘forget’ to tell of ‘flatmates’ and ‘whanau’members who work full time and move into the house, the kids usually get chucked into a caravan to make way for the adults. Even if you have half a dozen adults all pulling a benefit plus a bit of cash work you are still talking about a household income of anywhere up to $2000 a week. No too bad eh! And what incentive is there to save up for a mortgage – that’s just for stupid middle class taxpayers. Even John Tamihere has vented about the farcical state of who actually qualifies for a state house and what on-going checks are kept to stop the cheats.
    The other popular rort is to have family members arrive from the Pacific Islands with no job etc, but you get the rellies who have been in NZ a while to work the system. Heres’s what you do:
    Complain to Housing NZ that you have lot’s of sick kids that you ‘forgot’ to tell them about last time they checked. You need a bigger house to keep them in. Housing NZ offers you a bigger home but it ain’t in the desirable Eastern suburbs where all the decent schools are. They offer you Mt Roskill instead. You take it but on the charitable premise that the mysteriously larger family that has appeared gets to stay in your old digs, say that kind family members have offered to look after all the kids. Move to Mt Roskill for a few weeks with one or two kids then start bitterly complaining and hassling Housing NZ that they have forcibly separated the family and demand a house in the same street or nearby pronto before you go to the media and accuse Housing NZ of institutional racsism. Suddenly a house is found for you and your kids in your old neighbourhood. Isn’t it great that you mange to get your just-arrived, non-contributing, family a house they didn’t have to sit on a waiting list for and isn’t it great you are both so close, in the same street even.
    Of course if you are State House tennant you are banned form owning any other properties – yeah right! Simply ‘forget’ to tell them of all your income sources and buy a nice bach, make sure it is in a Trust, offer it to the tired teacher of your kids to use as a break. I am not kidding, my mother has had two offers this year alone.
    Don’t ask me how they get away with it. Govt social agencies are at the school constantly and my mother has just about given up asking various agencies to investigate the blatant rip-offs that abound. Political correctness, fears of the dreaded cry of ‘racism’, sheer apathy and in some cases outright fear and intimidation from tenants and beneficiaries (threats from those in or associated with gangs is a popular way to stop nosy govt types asking too many questions)all stops a system from genuinely helping those in need.

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