Rent freeze good, rental subsidy better: Council housing tenants ask Government for longer-term fix to rent woes

Thursday, 3 February 2022

Debbie Port's benefit increased by $20 on July 1. Wellington City Council will increase her rent by $20 on September 6. 'If I had a choice, I would be gone,' she says.

Wellington City Council’s rent-burdened tenants are relieved that rents won’t go up again this year, but are calling on the Government to step up with a longer-term fix.

A majority of councillors voted on Thursday to freeze rents for the next 18 months, calling the temporary measure “a backstop until we agree a way forward”.

Faiza Abukar and her family know all about unaffordable rents. Nearly half of the household’s income goes towards rent – $436 a week for a three-bedroom flat in Newtown’s Te Ara Hou apartments.

“The rent freeze is only for one year,” Abukar said. “It’s really good for people’s wellbeing to know it won’t go up this year – but we need a forever solution.”

* Messy politics postpone vote on rent freeze for Wellington City Council housing tenants

* Food, or rent? Wellington council housing tenants say they can't afford both

Council housing tenant Faiza Abukar is relieved that rents won’t go up this year – but wants the Government to come to the party by extending the income-related rental subsidy to the council’s tenant. She is pictured here with her youngest son, Hashim, who is four years old.

* Life in unaffordable council housing – the social housing tenants paying an untenable cost

Her husband works an office job at a supermarket, and the couple have three children. But keeping up with yearly rent reviews was a bigger scramble than keeping up with growing kids, Abukar said.

Fatima Muridi has lived in council housing since 1995 – during that time her rent has more than tripled.

And the family aren’t alone in that predicament: It is estimated that 1400 tenants currently pay at least 35 per cent of their income towards rent. A solo mother, in one instance, was paying 86 per cent of her income on rent.

The answer, Abukar says, is an income-related rental subsidy (IRRS) from the Government. “[The rent freeze] is a good idea, until we win the subsidy,” she said.

Access to the income-related rental subsidy (IRRS) would mean council housing tenants pay no more than 25 per cent of their income on rent - an amount that would be hundreds of dollars cheaper for some.

Access to the IRRS would ensure tenants paid affordable rents by setting them at 25 per cent of income, while the Government topped up the rest. The subsidy was available to tenants with Kāinga Ora, or new tenants with community housing providers (CHPs) – but not tenants in council housing, a situation which critics have called “a two-tier system”.

A group of tenants – Abukar among them – has been lobbying the Government for access to the subsidy, campaigning under the banner IRRS 4 ALL. The group called the rent freeze “a win” along the road to that destination.

At the moment, the council’s 3500 tenants instead pay 70 per cent of market rents, with the rest discounted by the council.

Councillor Jill Day said that model was broken. “The market rental system is unaffordable to many, many, many people. It doesn’t matter what level of rent you’re at – keeping up with market rates is really hard.”

Fatima Muridi has watched her rent go up and up along with market rates on Constable St. She moved into Newtown’s Te Ara Hou flats in 1995. Her rent then was $100 – now it’s $336.

The single mother – whose son is now 18 years old – became used to stretching the weekly budget. That’s a common story, council housing tenants have spoken out before about choosing between food and rent.

Muridi said there was “a cycle of poverty” playing out for families in council housing, and she wanted the Government to intervene before children were trapped in low-wage work with unaffordable rent, like their parents.

Councillors at the meeting agreed the temporary rent freeze was a band-aid, and said the council would continue conversations with the Government about accessing the IRRS, while investigating the feasibility of establishing a CHP.

Faiza Abukar says rents are high but council housing tenant communities are rich in other ways. Abukar is pictured here with her children (left to right) Maher, Imran and Hashim.

If a CHP was established, only new tenants could access the subsidy – the current tenant base, who would still be ineligible, have called that option “unacceptable”.

It would cost the Government $13.2 million a year to extend the IRRS to Wellington City Council, which is the country’s second-biggest landlord.

Housing Minister Megan Woods hasn’t ruled out extending the subsidy, but has said she doesn’t want to “pre-determine the outcome” of ongoing conversations with the council.

Councillors also passed an amendment for further investigation into funding council housing through rates – a measure which ring-fencing has previously prevented.

“City housing is currently funded by tenants, but should be supported by the whole community,” councillor Iona Pannett said.

Such a change would show the Government that Wellington was prepared to “put its hand in its pocket to ensure some of its most vulnerable are properly housed”.

Councillors agreed as well to amend criteria for an affordable rent limit subsidy – to ensure eligible tenants received it – and voted in favour of translating a tenancy welcome pack into 11 different languages.

Abukar didn’t speak English herself when she came to New Zealand from Somalia 14 years ago. “I learned with the help of the community,” she said, referring to her neighbours at Te Ara Hou.

Muridi also came to New Zealand from Somalia – as a refugee – when she was a teenager. The women one day realised their parents had previously been neighbours in their home country. “They’ve got it better [in terms of rent] back home,” Muridi said.

However, even though rents were unaffordable, the women love where they live. “The community is rich” in other ways, Abukar said.