About us
Part 1: Operating environment
A good understanding of our current and future operating environment is essential to planning and carrying out our work.
Significant changes continue to take place in New Zealand's society and economy. These affect the housing market and the ability of individuals to access housing. Current pressures on the demand and supply of housing include regional demographic changes, lifestyle and personal aspirations, the needs of specific groups, new construction technology, and higher building standards. Many people face significantly increased costs for renting and buying homes due to the dramatic rise in house prices.
A house is a high value asset with a long life. The quality and use of New Zealand's housing has significant implications for current and future generations. Sound planning is needed to ensure our homes meet people's needs over their economic life, and to protect the Crown's housing investment. The Corporation must consider many long-term housing issues and trends, and evaluate their possible impacts in its policy development and planning. Social, economic and environmental factors influence the demand for and supply of housing, as do external influences such as global and technological change.
Research carried out by the Centre for Housing Research Aotearoa New Zealand (CHRANZ) helps the Corporation to identify and evaluate possible future operating environments.
Our operating environment includes the state and the wider housing sector. We will deal with several known housing issues over the next three years, including:
- meeting housing need in areas of high demand
- upgrading the quality of our housing to meet current housing standards and expectations
- helping to make housing more affordable to first home buyers
- helping people to upgrade substandard privately-owned rural housing
- promoting new ways to meet housing need, for example, by helping non-government social housing providers.
The Government has stated its commitment to three themes for the future development of the nation. They cover:
- promoting the nation's economic, social and cultural development by transforming the economy
- lifting living standards for families, young and old
- further developing our sense of national identity.
The state sector and the Corporation as a member of that sector have a major part in realising these themes. This is discussed in detail in the section 'The Government's strategic policy framework'.
Examples of housing-related trends and issues that we need to anticipate and respond to appropriately are given on the following page.
Our family, work and community life is influenced by a number of factors, including housing. Social trends that change our expectations and the way we want to live have major implications for meeting housing needs. The population is ageing and becoming more ethnically diverse, and the average household size is falling. Groups with increasing housing need include individuals, single parent families and larger families, so the typical three bedroom state house is likely to become less suited to meeting our future social housing requirements.
Urban centres, especially Auckland, are likely to experience the highest rates of regional population growth and consequent demand for housing. Changes in the labour market could have a significant impact on people's housing decisions. They may be influenced by changes in regional economies, new forms of paid employment and personal preferences for greater flexibility about the location of work and commuting time.
New Zealand research shows that people increasingly expect their houses to be safer and healthier places to live and they want drier, warmer homes with child safety features. We are likely to see increased pressure from householders, including our tenants, for modernisation and new homes that meet higher health and safety standards that may be beyond regulatory requirements. The Corporation must assess and respond to such changing trends.
Economic trends and their effects on the housing market have far-reaching and long-term consequences. Our service delivery and policy advice must recognise this. The state of the housing market and the ability of individuals to obtain affordable housing depend on the economy and its performance. General economic responses may be forecast reasonably reliably, although the magnitude and timing of housing market responses to economic conditions is harder to predict.
We need to consider what might happen, what is most likely to happen and a range of appropriate responses. An economic slowdown occurring over some of the planning period covered by this Statement of Intent (2006-2009) is widely predicted. The effects will differ between areas and will impact on local labour markets and people's choices about where they can afford to live and work. We are factoring various scenarios into our strategic policy and management planning processes and forecasts.
The level of home ownership is generally considered to be a quick test of housing affordability. Home ownership rates have dropped as housing has become less affordable. An expanding rental sector will have a significant impact on people's living standards and their ability to build capital through housing equity. The nation's housing will require more expenditure for maintenance as it ages.
The nature and quality of the environment has a direct relationship with housing. The shortage of land in the right location for development requires innovative approaches, including influencing planning policies and attitudes towards land development. We also need to consider the impact of other major environmental factors such as the possibility of significant climate change. This might increase the need for greater flood-proofing of coastal properties or better cooling or windproofing systems to deal with more volatile weather patterns.
Improving the energy efficiency of housing is a more immediate priority to reduce pressure on natural resources and the environment. The Corporation has installed systems that use solar energy in some of its homes. We will explore options for the wider use of this technology where it can be shown to be cost-effective to the Corporation and meet its environmental aims. A balanced approach is needed to ensure the built environment meets current and future environmental conditions and regulatory requirements.
We continue to work with a range of government agencies to develop appropriate responses to environmental issues. In particular, we are working with Auckland councils that have expressed a particular interest in developing and applying best practice principles in urban design.
New building methods, such as standardised components and factory-built houses, are evolving to meet the demand for better quality housing and lower costs. New design technologies and improved building management systems can make the construction of new homes more efficient. New technology must be appropriate to New Zealand conditions and meet the housing needs of individuals and families now and in the future.
The need for increased efficiency and enhanced accountability within the state sector is likely to continue and increase. The Crown Entities Act 2004 sets new standards for the Corporation's operations and its governance by the Board, and brings our work closer to that of other state sector agencies. We will increasingly work with a wide range of agencies to achieve the goals of the Government through the New Zealand Housing Strategy. We will also work with others to contribute to the Government's three themes, in particular to supporting families, young and old.
We will work to ensure our planning takes place within the Government's strategic policy framework, and with a good understanding of our current and future operating environment.
We continue to work with central and local government and other stakeholders, including the social housing sector, to achieve the Government's long-term vision for housing. This is covered in more detail in the section 'Partners and stakeholders'.
