Research and Policy
Sustainable Communities and Economic Development Research - September 2008
International research suggests that communities with high concentrations of deprivation can negatively impact on the quality of life and opportunities for people living within such areas, above and beyond their own personal circumstances. Conversely, it suggests that diverse or 'mixed' communities (by income, tenure, household type and life stage) may be more socially cohesive than communities of concentrated deprivation, and can lead to an overall improvement of life chances for all, including more vulnerable members. The present research was designed to explore whether high concentrations of social housing negatively impact on the economic development of New Zealand communities. To address this question, a comparative analysis of four Auckland communities with high and low concentrations of Corporation housing was conducted, involving quantitative and qualitative methods. The results suggest that 'mixed' communities may be more successful if extreme differences in income are avoided. These findings are consistent with previous research which suggests that too wide a gap or difference between households may ultimately undermine social cohesion. Policy interventions may be required to ensure incomes do not become too disparate when attempting to develop 'mixed' communities. Informants advocate policies which act generally to strengthen communities and develop community cohesion and identity. Stronger communities are seen as more likely to facilitate economic growth through a range of ways, for example, increased likelihood of retaining and attracting new residents.
Overview
International literature suggests that diversity within a community creates increased social cohesion and improved life chances for community members, even for those that could be considered vulnerable. In contrast, communities that have concentrations of deprivation limit the life chances of people living within them (this is known as an area effect). Research in the United Kingdom and Australia suggests that spatial concentrations of poverty have a negative impact on people's life chances. The research also notes that social housing programmes in the United Kingdom and Australia have an explicit goal of reducing the concentration of social housing in their areas to create more 'mixed' or 'balanced' communities.
When looking at the characteristics of the Corporation's tenants compared to the New Zealand population as a whole, the Corporation's tenants are significantly more likely to be younger, of non-European ethnicity, sole parents, welfare beneficiaries and less healthy. This is largely due to the social allocation formula used to prioritise applicants of state housing. Successive governments have increasingly focused housing assistance toward those in most need. One of the consequences has been the creation of low-income suburbs with highly concentrated deprivation.
International research also indicates that spatial concentrations of poverty may influence local availability of goods and services, employment levels, educational attainment, crime and disorder, and public health. It has been theorised that when a defined area or community has predominantly low income households and high proportions of social housing, a 'cycle or dynamic' of low investment/ dis-investment can become entrenched.
Research purpose and approach
The purpose of the research was to:
- compare communities with high and low social housing, focusing on their respective economic development
- explore the relationship between household income levels, levels of social housing and economic development, including investment and dis-investment dynamics, within these communities
- identify practical policy responses that have the potential to increase local economic development of deprived or non-sustainable communities.
The research approach involved a comparative analysis of four areas within the Auckland region. Two of these, Tamaki and Mangere, contain high proportions and concentration of Corporation housing, while Te Atatu Peninsula and New Lynn are characterised by low proportions and concentration of Corporation housing.
The research comprised the collection and analysis of both quantitative and qualitative data. Existing quantitative indicators of economic activity and growth were analysed to reveal the extent, nature and relativities of the local economies within each area. Qualitative data was collected through a total of 32 in-depth interviews with key informants across the four community areas. The interview results provided qualitative understanding of the relationship between spatial concentrations of poverty, community economic development and investment dynamics.
Key points
- The Corporation system of housing allocation clearly supports the economically disadvantaged.
- High concentrations of Corporation tenants lead to poorer economic outcomes across the community at the household and individual level, including:
- slower than average (at a regional level) household and population growth
- lower mean household incomes per person and lower personal incomes
- lower levels of household access to motor vehicles and telephones
- lower levels of household expenditure per person
- some evidence that low income residents can pay more for basic goods.
- High concentrations of Corporation tenants lead to poorer outcomes at a community level, including:
- limited opportunities for lowincome residents to contribute to and participate in the local economy
- the economic decline of town centres
- a limited range of locally available goods and services
- the normalisation of crime and the development of negative social norms.
- 'Mixed' communities may be more successful if extreme differences in income are avoided.
Findings
The qualitative research has provided evidence of the relationship between concentrated deprivation and local investment dynamics. Informants found that:
- low levels of household growth within a community leads to limited growth in demand for goods and services
- low-income households can be trapped in a cycle of immediate economic survival, with little hope of setting and achieving longer-term financial goals
- the nature and extent of low-income households' participation in the local economy restricts the viability of offering certain goods and services locally
- there is a tolerance for lower levels of quality and standards in amenities, which can in turn deter investment
- social problems and stigma associated with deprivation can be a barrier to investment.
Mangere has a lower overall proportion of social housing compared to Tamaki. Findings in support of the area effect appear stronger in Tamaki compared to Mangere. This finding and others in the study lend some support to the hypothesis that more 'mixed' communities such as New Lynn and Te Atatu can be supportive of positive social and economic development outcomes. The qualitative research findings describe both New Lynn and Te Atatu as:
- desirable places to live, offering residents considerable amenity and benefits
- experiencing considerable residential demand and growth
- reasonably robust and resilient communities, characterised by positive social and cultural norms, including a strong employment ethos
- having high levels of community engagement, participation and expectation
- having strong local schools, attended by both high- and low-income families, and enjoying high levels of community support and involvement
- areas in high demand from Corporation tenants.
The findings also suggest that Corporation tenants living in areas of lower concentrations of Corporation properties:
- are likely to experience less stigma compared to Corporation tenants living in areas of higher concentrations of social housing
- are, or have opportunities to be, actively involved in the community
- benefit generally from available amenities and infrastructure
- may be positively influenced by social and behavioural norms in the community.
While such findings appear to support the 'mixed' community hypothesis, it is notable that a level of ethnic homogeneity in Mangere is suggested as a factor which may mitigate negative impacts from concentrated deprivation. The research also suggests that 'mixed' communities may be more successful if extreme differences in income are avoided. These findings are consistent with previous research which suggests that too wide a gap or difference between households may exacerbate tensions and may ultimately undermine social cohesion.
Implications for policy and programme development
The research suggests there is a need for policies that work with and build upon existing community and cultural strengths, that are locally appropriate and that build community ownership and cohesion. The findings show that policies that address the underlying causes of disadvantage and economic exclusion are required if there are to be equitable outcomes from economic growth, with social housing tenants benefiting.
This issue highlights key policy imperatives in the area effect literature. The literature asserts that interventions should address disadvantage at the individual level, as well as distress and dysfunction at the community level. The first point emphasises the need for interventions that address the underlying causes of poverty, as well as those that ensure access to appropriate social and other support services. The second supports the policy direction of 'mixed' communities to develop community strengths supportive of economic development.
An integrated approach clearly requires policy interventions across a range of areas; education and training, community development, health, crime prevention and so on. Continued difficulties in some areas have the potential to undermine other policy initiatives. Informants suggest greater Corporation involvement, or at least supportive and integrated policy development, in a range of areas. These include educational initiatives, economic literacy, skills training, job creation, youth and general community development.
Some informants see the management of social housing tenancies as a critical factor in mitigating the area effect. Setting and enforcing appropriate standards of tenancy behaviour is seen as important in mitigating social and economic decline in low-income areas. Overcrowded and rundown stock, combined with a tolerance for inappropriate behaviour, is seen as playing a role in the decline of community norms and standards. This undermines fundamental social goals of state-provided housing, and presents a barrier to desired outcomes from 'mixed' communities.
Informants advocate policies which act generally to strengthen communities and develop community cohesion and identity. Stronger communities are seen as more likely to facilitate economic growth through a range of ways, for example, increased likelihood of retaining and attracting new residents. Policy interventions may be required to ensure incomes do not become too disparate when attempting to develop 'mixed' communities.
Further Information
This summary report is based on the following research reports.
Market Economics Ltd (2007). Sustainable Communities and Economic Development: A quantitative investigation of four communities in the Auckland region. Report to Housing New Zealand Corporation.
Gravitas Research and Strategy Ltd (2008). Sustainable Communities and Economic Development. Policy Direction. Report to Housing New Zealand Corporation.
Gravitas Research and Strategy Ltd (2008a). Sustainable Communities and Economic Development. Key Informant Interviews in Four Auckland Communities. Research Report to Housing New Zealand Corporation.
Other related reports include:
Macdonald, Julie and Kirsty Peel (November 2005). New Zealand's Community Renewal Programme in an International Context: A literature review. Health by design Ltd for Housing New Zealand Corporation.
For more information contact
Housing New Zealand Corporation,
Research, Evaluation and Data Team,
28 Grey Street, PO Box 2628,
Wellington, Ph (04) 439-3000
