Research and Policy
Future Scenarios for Social and Affordable Housing - February 2009
Three divergent future scenarios for social and affordable housing in 20 to 40 years' time have been developed to assist long term strategic planning. Experts from across the country assisted with developing scenarios that are thought-provoking and challenging to the status quo. The scenarios are 'Road to Nowhere', 'Eco-nomics', and 'A Stake in the Ground'. Each scenario examines the various effects of key drivers on social and affordable housing, including economic and political drivers, social attitudes and pressures, environmental pressures and responses, and technologies and skills.
Overview
Future scenarios are descriptions of alternative possible futures, which are used to stimulate thinking about the future. Scenarios are not predictions of the future. They are plausible possible futures that can be used to develop and test long-term strategic plans.
Future scenarios have been used for organisational planning since the 1970s. In recent years, several New Zealand government agencies have developed their futures-thinking capabilities through projects such as the Social Futures Project (Ministry of Social Development), the Future
of Work Programme (Department of Labour), and Nga Kaihanga Hou — For Maori Future Makers (Te Puni Kokiri).
New Zealand's social and affordable housing environment has undergone significant change in recent years, and may well continue to change. Housing strategy needs to be robust enough to
weather different possible futures. With this in mind, Housing New Zealand has undertaken a future scenarios exercise.
Scenario development purpose and approach
The project addressed the following questions.
- How will social and affordable housing change over the next 20 years?
- What will these changes mean for social housing providers in 20 years' time, in the context of the next 40 years?
- What role and mandate will the Corporation have, in the context of key assets management and climate change?
Investigation began with an 'environmental scan', in which existing knowledge was reviewed and key experts were interviewed about the current situation and drivers of future change. Experts included people from academia, central and local government, community housing, the private development sector, and Housing New Zealand staff and tenant groups.
In subsequent workshops with the experts, a number of possible scenarios were developed. Three were then expanded, having been chosen for their plausibility, relevance, and coverage of intriguing challenges.
Key points
- Many factors that can drive change in the housing market and in social housing were identified by participants, including economic and political drivers, social attitudes and pressures, environmental pressures and responses, and technology and skills in the housing market and building industry.
- In the scenario, 'Road to Nowhere', complacent political attitudes and under-investment in infrastructure lead to a fragmented society and the demise of social housing.
- In the scenario, 'Eco-nomics', a shift to an economic paradigm that places high value on environmental sustainability and social capital results in new types of communities and housing, with social housing replaced by community housing, and government taking a role in housing for all New Zealanders.
- In the scenario, 'A Stake in the Ground', Ma-ori culture provides a model for increases in community cohesion when New Zealand forges a closer alliance with Australia for the purpose of rescuing the New Zealand economy. Drastic changes to land ownership laws result in more communal ways of living. Government no longer provides social housing, instead acting as a facilitator of community-provided housing and support.
Findings
Historical perspective and current state
New Zealand originally provided social housing for low income workers who were unable to purchase through the open market, and who might otherwise reside in inner city slums and fall victim to unscrupulous landlords. Over time, however, the remit of state housing changed, prioritising people with special housing needs who cannot otherwise access adequate housing. Social housing services are now limited to the most disadvantaged in society.
Housing affordability has been in decline since the 1980s, and the problem has intensified since the start of the housing boom in the early 2000s. First-home buyers face difficulties entering the market and levels of home ownership have declined.
Key drivers
Participants in the project identified many drivers of change that can influence the characteristics of the housing market and social housing. These drivers are summarised below.
Economic/political drivers
- Economic paradigms and the state of the economy
- Availability of government funds
- Taxation and legislation regimes
- The extent of state delegation of responsibilities
- Costs of credit and insurance
- Income distribution and employment
- The volume of international exchanges
- Elasticity of housing prices
Social attitudes and pressures
- Social relationships and community cohesiveness
- Dominant cultural values
- Population demographics, distribution, growth and mobility
- Levels of reliance on social support
- Prevalent housing occupancy models and aspirations
- Societal attitudes towards saving, poverty and social services
- Levels of health and crime
Environmental pressures and responses
- Climate change impacts
- Responses to extreme weather events
- New Zealand's position on climate change
- Attitudes towards environmental protection
- Methods of floodplain and coastal management
- The availability and cost of land and energy
- The environmental performance of houses
Technology and skills drivers
- Capacity and skills in the building industry
- Intensification and urban design
- Prevalent house design
- Sustainable housing solutions
- Levels of home maintenance skills
- Methods of tenancy management
- The percentage of the population that is 'market savvy'
Key changes these drivers could bring about include:
- increasing or decreasing housing costs
- changing housing supply and demand
- changing the characteristics of house buyers, renters and social housing inhabitants
- changing the type and amount of social housing and other accommodation support available
- changing social cohesion and perceptions of social housing.
Differences and common threads between scenarios
The three scenarios differ in several major respects.
- Different household compositions prevail.
- Urban infill may or may not have been successful.
- Political responses to environmental pressures differ.
- Society becomes more or less cohesive.
- The capability of the building sector varies.
There are, however, some common threads between the scenarios.
- Climate change and rising energy prices pose significant challenges for society.
- Society becomes more diverse, with a rise in Pacific and Asian populations. Lifestyles remain quite similar.
- Technology plays an increasing role in our housing, and speeds up communication.
Scenario: Road to Nowhere
Complacent political attitudes and under-investment in infrastructure lead to a fragmented society and the demise of social housing.
2012
In an era of complacent political attitudes, there is endemic underinvestment, particularly in relation to public transport. A crisis of widespread flooding exacerbates the situation by diverting policy attention away from housing. The economy experiences significant problems and the cost of food, energy and water rises, placing considerable stress on households. Poverty increases, land prices drop, and mortgagee sales soar. There is a temporary drop in the cost of buying a house. However, developers maintain large 'land banks' as security in uncertain times, and this restricts housing supply.2025
The increased elderly population and the 'echo boom' at the start of the century contribute to shortages in housing supply and changes in the type of housing that is needed. A government policy of urban intensification through infill housing is enacted, but little practical support means
that it is generally unsuccessful. Housing affordability deteriorates. Infrastructure is not upgraded to reflect higher density development, and a lack of effective public transport pushes people into urban areas, leading to overcrowding. Society becomes divided between rich and poor, with ghettos and gated communities prevailing. There is widespread social unrest, including increased crime. A lack of good quality design capability means that housing is generally of low quality. A social housing divestment programme, aimed at getting occupants on the housing ladder, is well-intentioned, but allows gangs to take control of housing.
2045
New Zealand's population declines and households are more frequently comprised of single-parent families, childless adults, and friends living together. Most work is undertaken remotely, using IT infrastructure. Flooding of coastal and river plain locations has caused some residential relocation, creating semi-autonomous democratic inland communities, often led by ex-gang leaders. The communities have little support and influence from local government. Government attempts to provide public assistance are ineffective, and gangs expand to fill the void left by government. By 2045 gangs have become a positive community force, and some are elected to Parliament. Social housing as previously understood no longer exists, other than as an unwanted legacy, and there is no clear idea of housing need.
Scenario: Eco-nomics
'Eco-nomics' describes a shift to an economic paradigm that places high value on environmental sustainability, and social capital results in new types of communities and housing, with social housing replaced by community housing. This shift means that Government takes a role in housing for all New Zealanders.
2012
Economic conditions are challenging, with high food, oil and housing costs. The export-led economy makes locally produced food very expensive. Many New Zealanders are trapped in their
homes because of negative equity. There is limited house building, and the quality of housing declines as maintenance becomes unaffordable. These conditions create a desire for a more locally-based economy and a reassessment of the value of housing.
2025
The actions of a visionary leader prompt the emergence of an alternative economic paradigm. This new approach focuses heavily on the environment and social capital. A carbon market is established, significantly raising the cost of carbon intensive materials, and New Zealand no
longer imports or exports in significant amounts. The balance between the use and exchange value of housing changes, such that the use value exceeds the exchange value, and housing is no longer seen as an investment to be bought and sold. A capability gap in the building sector is filled by an influx of skilled migrants, who also bring knowledge of new housing typologies. A variety of housing tenure options develop, and new models of housing-based communities emerge.
2045
Housing is seen as the heart of a community. The carbon market and new technologies mean that housing is also used to generate energy. Social housing is effectively replaced by community housing. Profits from energy generated by this housing are invested in more community-managed housing. Housing design flexibility emerges, and housing quality and durability improves. Policies
are put in place to encourage southward migration to ease the pressure on the Auckland/Hamilton/Bay of Plenty areas, and regional housing agencies work with the community sector to provide housing strategies for all New Zealanders.
Scenario: A Stake in the Ground
Increased community cohesion and autonomy, and drastic changes to land ownership laws, result in more communal ways of living. The Government no longer provides social housing; instead acting as a facilitator of community-provided housing and support.
2012
The economy slows, due to rising fuel prices and the effects of climate change. An economic alliance with Australia is forged as part of a 'rescue package'. Housing affordability decreases, and ownership levels fall. The community housing sector grows.
2025
Fears around New Zealand's identity have been fuelled by the alliance with Australia and an influx of new migrants escaping the effects of climate change elsewhere. A new social movement emerges to unite all New Zealanders under a Kotahitanga flag. People begin to adopt Maori values and connections to the land. This movement influences the radical new Land Act legislation. Under the Act, only New Zealand citizens can own land, and land may be passed down to relatives or to registered kaupapa tribes (social groups based on interests or values),
but it cannot be sold. Land owners hold kaitiaki responsibility for their property and neighbourhood. Housing tenure can now only be purchased on a shared equity basis. Household sizes increase as the population swells, and families and friends move in together to reduce housing costs. Communities play an increasing role in social service provision.
2045
Twenty years of the Land Act has changed the way New Zealanders live. Cohesive communities based on family linkages, ethnicities, interests or values have developed. The building industry has adopted communal housing design, and intensification of housing has been successful. Multiple ownership of land predominates, and the system of shared stakes in housing has made
accommodation available at low cost, as shared equity allows people to be supported by their communities and families. Society spends less on social services and state housing is not needed. The Government now acts as a facilitator and a broker of access to housing.
Implications for strategy development
This work is being used as an input into the Corporation's long-term strategic planning.
Further information
This paper is based on the report, Future Scenarios for Social and
Affordable Housing. Prepared for Housing New Zealand Corporation by URS Corporation (September 2008)
Other related reports include:
Issues Paper. Future Scenarios for Social and Affordable Housing. Prepared for Housing New Zealand Corporation by URS Corporation (June 2008)
Working Paper. Future Scenarios for Social and Affordable Housing. Environmental Scan. Prepared for Housing New Zealand Corporation by URS Corporation (June 2008)
