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State housing is the system of public housing offered to New Zealandmarker residents on low to moderate incomes. Some 66,000 houses are managed by Housing New Zealand Corporation, most of which are owned by the government.

The Liberal Government

Urban working-class housing in New Zealand in the 19th century was of poor quality, with overcrowding, flimsy construction, little public space, often-polluted water, and lack of facilities for disposal of rubbish or effluent. Local bodies were not interested in enforcing existing regulations, such as minimum street widths, which might have improved housing, or in prosecuting slum landlords.

The Liberal Government, first elected in 1890, believed that the slums would cease to be a problem as workers moved to the country to become farmers or small town merchants. Instead, the cities continued to grow. A parallel idea of making Government-owned land on the outskirts of cities available for workers to create smallholdings failed to gain traction because the cheap commuter trains which might have transported them to their workplaces were not established, and the Government did not provide loans for building or allow the purchase of freehold land in the areas.

13 Patrick Street in Petone was one of the first houses constructed under the 1905 Workers' Dwellings Act
Prime Minister Richard Seddon introduced the Workers' Dwellings Act in 1905 to provide well-built suburban houses for workers who earned less than £156 per annum. He argued that these houses would prevent the decline of living standards in New Zealand and increase the money available to workers without increasing the costs to employers. By breaking private landlords' control over rental housing, housing costs for everyone would decline. The bill passed by 64 votes to 2, despite criticism over the cost of the scheme, the distance the houses would be from workplaces, particularly ports, and the lack of provision for Māori. Seddon estimated that 5,000 houses would be built under the scheme.

The Act allowed for workers to rent weekly, lease for 50 years with a right of renewal, or lease with the right to buy over a period ranging between 25 and 41 years. In practice, the Government did not initially advertise the weekly rental, but emphasised the lease with the right to buy. The Act specified that workers could be male or female, but women were discouraged from applying for the houses because the Government was concerned that "houses of ill-repute" might be established.

The standard of materials and construction was high, because the Government was determined that the houses would not become slums. The Act specified that the rent was to be 5% per annum of the capital cost of the house and land, together with insurance and rates. The initial specification was that houses should cost no more than £300, but this was raised to £350-400, depending on construction materials, by the 1905 Amendment Act. This resulted in weekly rents ranging between 10s 6d and 12s 7d. All the houses had five rooms—a living room, a kitchen/dining room, and three bedrooms—as well as a bathroom. This allowed boys and girls to be given separate bedrooms from each other. Some houses were built of wood, some of concrete, and some of brick.

Twenty-five houses were built at Petonemarker in 1905. Only four applications were received to lease them. Workers could reach Wellington with a 20 minute walk followed by a 30-minute train ride, but the train cost another two shillings a week. This left a family no better off than continuing to rent in Wellington. The Government was forced to allow weekly tenancies and to raise the maximum income level to attract families to the houses. Other settlements such as the one in Belleknowes, Dunedin also had trouble finding renters. Houses built in central suburbs, such as the eight in Newtown and twelve in Sydenham, New Zealandmarker, attracted tenants much more readily.

After Seddon's death in 1906, the Government Advances to Workers Act allowed urban landowners to borrow up to £450 from the Government at low interest rates to build their own houses. This proved much more popular than the state housing system. A total of only 126 houses were built under the Workers' Dwellings Act by 1910. A replacement Workers' Dwelling Act in that year allowed landless urban workers to build a house on a deposit of just £10. While it still allowed for workers to rent or lease their homes from the Government, applicants who were willing to buy were favoured. The state houses were sold by the Reform Government from 1912 onwards.

The First Labour Government

At the time it was elected in 1935, the First Labour Government had no plans to introduce state housing. It nationalised the Mortgage Corporation set up in 1935 by the Coalition Government to provide low interest housing loans.

Following a campaign against slums by the newspaper New Zealand Truth, and the realisation that lending for mortgages was not effective to provide housing to replace them, the Finance Minister Walter Nash announced in the 1936 Budget that 5000 state houses would be built. The houses would be provided by private enterprise, with a Department of Housing Construction set up to oversee the building and the State Advances Corporation to manage the houses. The government intended not only to provide housing, but to stimulate jobs and manufacturing with the construction of the houses, which were to be built from New Zealand materials as far as possible.

The houses were built in the suburbs, not in the inner cities where the slums were. This was in part because the cost of building in the inner cities was higher, and in part because the government believed that children were better raised in suburban sections rather than on the streets. The urban poor also were largely unable to afford the rents for the new state houses. The government favoured married couples with at least one child as tenants to encourage an increase in the birth rate. Māori were excluded, in part because they could not afford the rentals, but also because the government believed the races should be kept apart.

Almost all of the state houses built by the Labour Government were detached, with some land on which vegetables could be grown and perhaps a few animals kept. A few were semi-detached, with two or four houses sharing a section. Only about 1.5% of the 30,000 houses constructed by 31 March 1949 were in blocks of flats, all of them in Auckland or the greater Wellington area. The largest block was the 10-storey Berhampore Flats.

The first of the new state houses was completed at 12 Fife Lanemarker in Miramarmarker, Wellingtonmarker, in 1937. The Prime Minister Michael Joseph Savage and several cabinet ministers carried furniture into the house and handed the keys to the tenants. For the opening of the first state house in each major city, a group of cabinet ministers repeated this ceremony. The tenants paid about one-third of their weekly income as rent for 12 Fife Lane.

A typical 1930s state house layout
The state houses were constructed using over 400 designs, so that no two houses in a given area were identical. There was a common theme to their design, with the public zones of living room, kitchen and dining area on one side of the house, with the living room to the north to catch the afternoon sun and the kitchen arranged for the morning sun, and the private zones of bedrooms, bathroom and laundy on the other side separated by a central hallway. Although the original plans included space for a garage, this was not included in the houses that were built, but a tool shed was provided to encourage tenants to grow a vegetable garden. The houses had wooden frames and timber or brick cladding.

The waiting list for state houses was 10,000 in February 1939. House building could not keep up with the demand, and almost stopped in 1942 as resources were reallocated to meet the needs of the war effort. Although construction resumed in 1944, by the time the war ended in August 1945 the waiting list had grown to 30,000. The government set up transit camps to provide interim accommodation for families waiting for state houses. Priority went to returned soldiers.

In 1944, the Department of Native Affairs produced a report on the poor housing conditions of Māori in the Auckland suburb of Panmuremarker. This and similar reports caused a change of policy; the government would now build state houses for Māori, to be jointly managed by the State Advances Corporation and the Department of Maori Affairs, which had been renamed in the interim. The new policy was to intersperse Māori and Pakeha households, so that Māori could "adjust themselves ... to the pakeha way of living". A rare exception to the interspersal policy was in Waiwhetu in Lower Huttmarker, where state houses were built around a central marae.

Although the National Party had opposed state housing in the 1938 election campaign, suggesting that it was a step towards the nationalisation of private property, in 1949 it promised to continue building state houses but also to allow tenants to buy them. Most people wanted to own their own homes, and this policy helped National win the election.


In 1950, the waiting list for state houses was 45,000, and a total of 30,000 houses had been built. The National Government increased rents for new tenants to make state housing less desirable compared with private renting, and an income limit of £520 per annum was set to ensure that only poor people could rent a state house. A points system was introduced to decide which applicants for houses had the greatest need. This system was refined in 1973 and continued until 1992. The Government also introduced the sale of state houses to their occupants in August 1950. They offered 40-year mortgages on a 5% deposit at 4% interest, or 3% if the tenant agreed to continuously own and occupy the property. Many tenants were content to continue to rent with their guaranteed tenancies. By 1957, about 30% of the available houses had sold, which was considerably less than the government hoped.

The Labour Government elected in 1957 stopped promotion of state house sales, but the subsequent National Government of 1960 restored it.

The policy of interspersing Māori and pakeha tenants ceased in the 1970s. Māori became concentrated in the larger state housing suburbs.

In 1974, under the Third Labour Government, the State Advances Corporation, responsible for administration, and the Housing Division of the Ministry of Works, responsible for construction of state houses, merged to form the Housing Corporation of New Zealand.

State house rental rates were fixed by the "fair rent" provisions of the 1955 Tenancy Act to reflect the capital cost of the house and the outgoings on it. While rents increased over the years, the rental was rebated according to the family's income and size. In 1974, the rents were fixed at the lower of the "fair rent" value or one-sixth of the household income. By the mid 1980s, the "fair rent" was about half the rental for an equivalent private property. The Third National Government of Robert Muldoon set a time limit for new tenants. After six years was up, they had a year to agree to buy the house or move out. The following Labour Government abandoned this system, but set rentals to a quarter of the household income.

The Papakainga scheme was introduced by the Fourth Labour Government in the late 1980s to assist rural Māori to build their own houses on their own iwi-owned land.

Market rentals

A peak of 70,000 state rental houses was reached in the early 1990s.

In 1991 the fourth National government raised state house rentals to "market levels" amid much controversy. The Housing Corporation was now expected to make a profit. At the same time, welfare payments were reduced. For those who could not afford the rent, the Department of Social Welfare would pay an accommodation supplement of 65 percent of the difference between the new rent and one quarter of the household income. The intention was to encourage able-bodied people to look for jobs, to remove the advantage of living in a state house over living in private rental accommodation, and to force people living in houses larger than they needed to move to smaller ones.

For many state house tenants, the new policies reduced their standards of living. Foodbanks increased in number in state housing areas, and overcrowding became a problem as some families shared houses. In response, in 1996 the government increased the accommodation supplement to 70 percent, and restored the idea of "social objectives" rather than profit for the Housing Corporation.

A Home Buy scheme was introduced from 1996-99, which allowed tenants to buy their state home with a five percent deposit, an 85 percent loan from the government, and a ten percent suspensory loan. 1800 houses were sold under this scheme, and 10,000 more sold in this period.

Current situation

The Fifth Labour Government, elected in 1999, placed a moratorium on state house sales and re-established the income-related rents. In 2001, Housing New Zealand, the Housing Corporation, and part of the Ministry of Social Policy were combined into the Housing New Zealand Corporation, so that policy and administration for state housing are controlled by a single agency.

A program to modernise state houses was introduced after 1999. Existing houses are insulated, the layout is improved, and in many cases the kitchen and bathroom are replaced. A "Community Renewal" program, started in 2001, attempts to build supportive networks amongst residents of state housing areas, reduce crime and increase safety, and improve community services.

Rents are now limited to 25% of household income for tenants on low incomes.

See also


Further reading

External links

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