About us
Priority three
Innovate in the development and delivery of services
During 2007/08 the Corporation:
- applied best practice to state housing redevelopments
- improved housing standards in New Zealand
- reviewed the lending management programme
- improved the Home Ownership Education programme
- delivered lending assistance for non-weathertight homes
- supported new housing solutions for the Maori in rural areas
- began the implementation of the Te Au Roa, the Maori Strategic Plan
- developed systems and processes to deliver the pilot Shared Equity scheme.
The Corporation promotes and demonstrates good practice housing that is environmentally efficient through sound construction work and development projects. It also supports initiatives under the New Zealand Housing Strategy to provide housing assistance and improve access for individuals and families on low and modest incomes into home ownership.
The financial costs of this priority can be found on this page.
What was achieved
Implementing the Maori Strategic Plan
The Corporation believes that working with iwi, Maori and other key stakeholders will lead to opportunities to improve housing outcomes for Maori. Approximately one-third of Corporation tenants identify as Maori.
In early 2007 the Corporation launched Te Au Roa: Into the Future, the Maori Strategic Plan 2007-2012.
Te Au Roa has three key goals.
- Develop and maintain partnerships with iwi and Maori and other key stakeholders.
- Increase the effectiveness of service delivery to Maori.
- Develop the Corporation's capacity and capability to respond to Maori as customers.
The measure was to implement key initiatives from Te Au Roa by 30 June 2008. This measure was not achieved as the Corporation focused on building its internal capacity in the early part of the year. The outstanding initiatives and key deliverables will be progressed in 2008/09. The work undertaken included identifying the key principles underpinning the Maori housing situation, developing the Maori demonstration partnership project, and progressing a Maori communications strategy.
Assisting households into home ownership
In recent years it has become increasingly difficult for people on low and moderate incomes to achieve home ownership. The Corporation provides support through a number of new and innovative lending initiatives such as the Welcome Home Loan and Home Ownership Education programmes.
The measure was to assist 925-1,130 households through lending and insurance services. This measure was not achieved, with only 716 households assisted. The performance of this indicator is based on lending through the Welcome Home Loan and Low Deposit Rural Lending schemes detailed below.
Welcome Home Loan scheme
The Corporation works with a range of lenders so they can offer Welcome Home Loans to people who may not normally be able to access home loan finance. The Corporation's role is to act as the lender's mortgage insurer. This reduces the risk to the lender and enables them to lend to people with little or no deposit, yet who are able to afford repaying the loan. It means that in the worst case scenario the lender can recover any loss from a sale.
The measure was to underwrite 900-1,100 loans. This measure was not achieved, with only 690 loans underwritten. Uptake of Welcome Home Loans has been lower than forecast because rising house prices and interest rates in the first part of the year led to affordability issues where house prices moved out of reach for the target market. This was compounded in the second part of the year by a softening housing market and rising living costs that led to a downturn in confidence in the housing market and lending activity across all markets. This situation is expected to improve over the next year as tax cuts take effect and interest rates and house prices fall.
Welcome Home Loan lending and income caps are reviewed for market appropriateness on a quarterly basis. This helps the Corporation to ensure lending reaches the right people.
Low Deposit Rural Lending
Low Deposit Rural Lending targets first-time buyers who are low to modest income earners wanting to buy or build a house in rural/regional areas. Applicants attend a series of home ownership skills workshops, which include support and advisory services. The lending gives access to a Corporation loan with a deposit limit of only 3 percent. The product includes lending to people wanting to buy or build a house on Ma- ori land under multiple ownership (papaka- inga) that cannot be used as security for a standard mortgage.
The measure was to approve 25-30 rural loans. This measure was achieved, with the approval of 26 loans.
The Hobsonville development
The Hobsonville project is being delivered by the public and private sectors working together to achieve the common goal of a leading-edge sustainable development for a mixed community in north-west Auckland.
The measure was to achieve the planning milestones for 2007/08. This measure has been achieved. The planning milestones included the selection of a development partner for Precinct One, development and lodgement of the first stages of a comprehensive development plan (currently following the statutory approval process with the Waitakere City Council), evaluation of a range of potential development opportunities supporting a marine cluster and the landing special area, and agreement being reached with the Ministry of Education for a primary school site. (See Appendix 1 on pages 115-124 for the sustainability report from the Hobsonville Land Company.)
The Home Ownership Education programme
In 2007/08, the Home Ownership Education programme was renamed Welcome Home First Steps to align with the Welcome Home Loan scheme. Welcome Home First Steps is for anyone who wants to find out more about buying a home. It helps people make informed decisions on whether home ownership is the best decision for them. It is not a loan-based product. People who want to obtain a Welcome Home Loan do not have to attend the programme.
It is offered throughout New Zealand by contracted service providers. In addition, the Open Polytechnic of New Zealand offers a distance learning option for the programme.
The measure was to have 4,000-5,000 participants attend the programme. This measure was achieved, with 5,000 participants attending.
The Shared Equity scheme
The Shared Equity scheme is a two-year pilot programme designed to improve home ownership affordability for modest income households living in moderate- to high-priced locations. Shared Equity is a form of home ownership assistance where home buyers can apply for a loan from the Corporation to bridge the difference between the maximum amount they can borrow from Kiwibank, and the amount they need to buy a house - up to a maximum value of 30 percent of the house price. The pilot is intended to approve up to 700 loans over two years.
The Corporation loan provides a second mortgage over the property. It has no interest costs, and requires no repayments until the house is sold or the loan term ends. At sale or at conclusion of the loan term, the household must repay the loan to the Corporation. If the value of the property reduces or increases, so does the equity share, and the amount that must be repaid.
The measure was to implement a Shared Equity scheme by 30 June 2008. This measure was achieved, which allowed the scheme to be introduced on 1 July 2008.
Looking ahead
The Corporation needs to improve Maori housing outcomes. Implementation of Te Au Roa, the Maori Strategic Plan, will help this happen. The Corporation is now well positioned to make progress on implementing partnerships with Maori to support innovative housing development, and to increase the responsiveness of its services. The Corporation has developed a range of programmes that are effective in helping people into home ownership. These programmes aim to improve access to the finance, knowledge and skills needed to buy and maintain home ownership. The Shared Equity pilot scheme provides support to potential home owners in high-priced markets.
The Corporation will continue to provide policy advice on housing affordability as part of a crossagency work programme.
Work will also continue with developers and stakeholders to develop a mix of social housing, affordable housing and private housing. The Hobsonville project, for example, will see a mixedtenure community developed of over 3,000 homes. About 60 percent of the homes will be for private owners. Fifteen percent will be state housing and 15 percent affordable homes for first-home buyers.
