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

Friday, 8 October 2021

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.

Cut off from an income-related rental subsidy, council housing tenants are less equal than other social housing tenants. Ethan Te Ora reports on how that inequity entrenches poverty for some of society’s lowest-income earners.

ZuoYun Cai 蔡作云 is trying to dig her way out of an impossible hole, while an autocratic policy mechanism causes more debt to be shovelled on top of her.

A vegetable garden in the backyard is one measure of those efforts: mounded rows that will soon produce potatoes, kūmara, herbs, silver beet, and tomatoes.

The single mother dug out that garden two weeks ago, the day after relocating from one social housing flat to another, despite severe pain in her hip which has kept her off work now for months. The impetus to plant that vege patch was clear: one day soon, she might not have money to buy food for herself and her 11-year-old daughter, ChuYu 蔡楚玉.

ZuoYun Cai works in the garden of a council housing flat she recently moved to with her daughter. (The rent at a previous council house was also $350 – she requested the transfer following a robbery and racist insults.)

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Before the hip injury, a job as a cleaner was enough to get by, now she relies on a sole parent benefit: $406.78 a week. Her rent, at a two-bedroom council-owned house in the inner-city Wellington suburb of Newtown, is $350.

“It’s difficult to pay the rent,” the 53-year-old says. “Too much for us. In my spare time, I must go and look for money.”

That search led to part-time work at a restaurant: a handful of hours a week, amounting to around $60. But those part-time hours end this weekend, meaning from next week she will have $56.78 left after rent. Fifty-six dollars to buy food, pay the bills, and satisfy any other incidental expenses for her daughter and herself.

This council flat will soon cost a staggering 86 per cent of ZuoYun Cai’s income. But despite those circumstances, Cai finds ways to support her 11-year-old daughter’s hobbies: playing the guhzeng, taekwondo, art and roller-skating.

An egalitarian notion undermined by bureaucracy

The un-affordability of Cai’s rent – a staggering 86 per cent of her income – is the sharpest end of a thorny problem. Her rent is based on market rates in the area where she lives. Wellington City Council, her landlord, charges its tenants 70 per cent of market rates, and discounts the rest. The result is many of its 3500 low-income renters are saddled with unconscionably high rents.

The council agrees with this indictment; its own rent review found tenants were paying more than they could afford.

ChuYu Cai, who’s known by the English name Freddie, plays a Chinese plucked zither instrument, known as the guzheng, and raised money by busking at the market to buy these roller-skates.

But the council is trying to dig its way out of another hole. Its housing unit, known as City Housing, is set to become insolvent by June 2023; the consequence of an unsustainable financial model which means its housing operations run at a yearly $6m deficit.

The council is the second biggest landlord in the country, with 1931 properties stretching from Tawa, in Wellington’s north, to Brooklyn, in its south. The only bigger landlord nationwide is the Government’s own social housing provider, Kāinga Ora.

There’s a cruel irony in that: If the Cais lived at an identical flat, on the same road in Newtown, but their landlord was Kāinga Ora, the weekly rent would be $87.50 – $262.50 cheaper than it is now. Likewise, if their landlord was an accredited community housing provider (CHP), their rent would also be $262.50 cheaper.

Anita Olsen calls the way rents are calculated in council housing – based on market rates rather than income – 'a poverty trap'.

The change of landlord would make Cai eligible for the income-related rental subsidy (IRRS), meaning rent would be capped at 25 per cent of income, with the Government topping up the rest. Wellington City Council estimates 85 per cent of its tenants would qualify for the subsidy, based on incomes. In tandem, the subsidy would rescue the council’s housing unit, turning the yearly deficit into a $5m surplus.

But that lever has proven difficult to pull: tenants in council housing have been explicitly cut off from accessing the subsidy. In 2013, the National Government passed the Social Housing Reform Act, re-jigging who was eligible to receive the IRRS. The subsidy was extended, at that time, to new tenants with CHPs, while councils were shutout. The current Labour Government, since taking power in 2017, has kept those settings in place, despite regular lobbying from councils.

Those inconsistencies continue to undermine the policy’s egalitarian purpose – that low-income tenants should have affordable rents – and instead entrench inequality for marginalised groups who rely on the council for housing.

Anita Olsen says people need to experience living in social housing, particularly council housing. “We need to have as many people to love us as I can get.”

And while Housing Minister Megan Woods hasn’t ruled out extending the IRRS to Wellington City Council, the revelation this week that $13.2m a year could fund the lifeline won’t “pre-determine the outcome” of ongoing conversations, she says.

Cai, who goes by Susana in order to appease English-language speakers, must in the meantime navigate convoluted systems to unlock extra assistance. A case manager at the Ministry of Social Development recently told her that she might qualify for the accommodation supplement – a rental top-up which maxes out at $155 in Wellington, for a sole parent with one child. Except she didn’t have the necessary paperwork at hand to apply.

Cai moved to New Zealand from the Hainan province of China, with a Kiwi-born husband, from whom she separated in 2018. Her brother and father pitch in with expenses, even buying ChuYu a Chinese plucked zither instrument, known as a guzheng, and paying for lessons.

Council housing tenants Anita Olsen and Theresa Brown are both kaitiaki over the Rintoul St Villas. Social connection is important, Olsen says. “We’ve got to connect to the wider community. Because, often, these little communities don’t. So it’s important that we start making bridges, and we are less trapped.”

But still, in recent months, Cai has accumulated thousands of dollars in debt. “Otherwise, no money to pay for all the things,” she says.

Escaping the ‘poverty trap’

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.

There are times when Anita Olsen feels trapped. She describes encroaching limitations: the infrequency of buses in the neighbourhood, arthritis in her knees, the inability to afford a car. But those concessions to age and circumstance don’t colour how she perceives herself.

“I’m not trying to have a sympathy vote, because I don’t feel I’m a victim,” the 68-year-old says.

“But there are times in life when you are at the mercy of not having enough money, or not having options that other people have.”

As with most people in council housing, Olsen arrived by a circuitous route: a series of events which came to a head when a tree fell on to a private rental where she lived with her two children. In the aftermath, Olsen moved into a one-bedroom council flat, part of the Rintoul St Villas, in Newtown, while her children lived with her sister.

That was almost 20 years ago now.

With little disposable income, Terry Kautaharua Nepe looks to affordable alternatives to pass the time: walking and reading mostly. (“Marcus Aurelias is god to me right now,.”) “I keep on looking at things to remind me that things are going to be OK, even though it’s not,” he says.

“At one stage, they didn’t like me a lot,” she says, referring to her neighbours. “As much as I found them strange, they found me strange.”

From those uncertain beginnings, Olsen has become an unlikely leader in the community – officially a kaitiaki (guardian) for the tenants, along with her neighbour, Theresa Brown.

Brown is 15 years into a second stint at Rintoul St; she raised her youngest son here in the late 80s before leaving for Australia, in 1999. She came back, in 2006, in order to care for her elderly mother, who died only three years ago, at the age of 94.

Katherine Reid and Terry Kautaharua Nepe soon discovered they had much in common.

A lot changed in the intervening years – particularly the cost of rent, which continues to rise bit by bit.

“Some of them, they are afraid to speak out about the rent – they don't want to get evicted,” the 71-year-old says. “Me, I don’t care – I want to move back to Samoa anyway [Brown was born in Apia, the capital of Samoa].”

The council housing development Newtown Park, comprises 206 units across five buildings, is both award-wining and infamous.

Brown and Olsen have similar situations, insofar as finances are concerned. Both women are on New Zealand superannuation, a fortnightly payment which they say equates to a little more than $400 a week. If Olsen could access the IRRS, she calculates that her rent would be $109 a week – instead, it currently comes in at $251 a week.

Olsen says the extra money could go towards plants, transport, gifts for her children, and grandchildren. Brown, meanwhile, could save towards a flight to Samoa.

But the situation is worse, Olsen says, for neighbours of hers on meagre benefits like the jobseeker support.

If the rent becomes any more unaffordable, Terry Kautaharua Nepe believes he has a workable solution. “My safety net is, worse comes to worst, pack this up, get rid of it, jump in the car – we’re gonna go sleep in the car,” he says.

“It’s an absolute poverty trap. You’ll have enough money for rent, enough money to buy some food maybe. But you’ll never get enough money to leave.

“You can’t do anything without money. You can’t do anything, so you don’t dream about doing anything.”

‘It was the survival instinct kicking in’

ChuYu Cai has been learning taekwondo, a hobby that may be difficult to formally keep up, given how tight money is at home.

On his 49th birthday, Terry Kautaharua Nepe (Ngāti Porou, Ngāi Tūhoe) was driven by twin impulses: survival and indulgence. Those urges led him to his casual workplace – a fishery in Lyall Bay – where he “ticked up” two small crayfish, at a discounted company rate.

He froze the crayfish – to desensitise them before they were euthanised – then cooked them, and ate them with tartare sauce. Months later, he still can’t afford to settle the $64 bill. But he doesn’t regret the purchase.

“We had nothing, we had zilch – no money, no food,” he says. “It was something I could get right there, on hand. I can’t go down to the dairy shop, and say ‘bro, can I book up some steaks’. I guess the survival instinct kicked in.”

Nepe lives with Katherine Reid, his partner, in a one-bedroom flat, in Newtown Park, with a stunning view looking back towards central Wellington. Their unit is one of 206, within five buildings, on the fringes of the suburb. Those buildings underwent award-winning upgrades in 2013, but have a chequered past besides.

Reid and Nepe were both in temporary emergency accommodation when they met six years ago. Reid was shell-shocked after the end of her marriage, for which she had moved from New Zealand to Australia. “I could’ve gone back to Oz. But I’m glad I didn’t,” she says.

Instead, she lived briefly at the Arlington Apartments, a 57-unit housing block, which has since been demolished, rebuilt, renamed, and then leased to Kāinga Ora. It isn’t lost on her that the new arrangement means those tenants who live at the site today can access the IRRS.

At the moment, Reid and Nepe are on jobseeker support, although Nepe also works casual hours packing crayfish. Reid worked for years in the fishing industry herself, but wants to rejoin the workforce in a retail job.

For now, the couple’s combined weekly income is $550, with weekly fluctuations depending on Nepe’s casual work. The rent, meanwhile, is $275 a week following a recent $30 increase. But, with access to the IRRS, the couple would instead pay $137.50 a week.

ZuoYun Cai’s vegetable garden is starting to yield sprouts, only two weeks after it was dug.

The way rents are currently set up often disincentivises tenants from finding work, out of fear the rent will skyrocket at the next annual review.

A tenancy manager once mentioned to Nepe that their rent might more than double if he was in full-time employment. “You want us to go and work, and you want half of what we earn,” he remembers saying in response.

Nepe says other tenants in the building have leased space in their flats – the only way they can make rent each week. “I understand it; you’ve gotta do what you’ve gotta do to survive.”

Reid says unaffordable rents have defined her life. Recently, she made the “bad decision” to buy a gift rather than pay rent on the date of another birthday: Nepe’s daughter’s 19th. That means the couple are $175 behind and will have to drip feed the difference, potentially over months.

“I feel like if my life was a musical it would be called Rent,” she says.

“There aren’t many ways you can improve your life without money, unfortunately. Taking a course, travelling to see friends and family, celebrating special occasions. It all comes down to money, and that comes down to quality of life.”

The grassroots campaign to access IRRS 4 ALL

There is a grassroots movement growing within the concrete courtyards, and fertile garden beds of council housing flats around Wellington. The stimulus for that movement is the tenants themselves, who have today launched a campaign called IRRS 4 ALL.

They are supported by the private sector union group E tū, and representatives from other organisations like Changemakers Resettlement Forum, Urban Vision and the Anglican Wellington Church. Wellington city councillor Tamatha Paul designed the logo for the campaign: a state house beside a council house with a manu (bird) at the intersection, symbolising a safe passage home.

Cai, Olsen, Brown, Nepe and Reid have attended organising meetings for the campaign, among a groundswell of other tenants.

The rallying cry from those tenants is unambiguous: they want the IRRS, and, with it, long-overdue parity with other social housing tenants.

And their local body representatives seem to agree. The IRRS might, in fact, be the one issue to unify the fractious Wellington City Council. It’s exactly how the IRRS should be accessed which polarises debate.

The council voted unanimously on Thursday to pursue two parallel tracks, both geared towards accessing the subsidy.

The first path is to keep lobbying the Government to change the legislation to extend the IRRS to council tenants. The change would cost the Government $13.2 million a year, but take about 12 to 18 months to take effect.

The second option is to establish a community housing provider (CHP) – most likely an independent community trust – to which the council would lease its housing stock, as Christchurch City Council did. It would be a way around the legislative loophole, and would mean all new tenants could access the IRRS. There’s just one caveat: existing tenants would still be ineligible.

And that's unworkable, say current tenants, who have already faced years of unaffordable rents, and face homelessness if rents continue to increase in lockstep with market rates.

They would prefer to deal with locally-elected representatives, who they can hold to account every three years, rather than be ruled by a nebulous community housing trust. There’s also the real worry – with outrageous precedent – that a trust-managed landlord might rip up a hard-won, award-winning vegetable garden, or worse.

But the mood at the moment is cautiously hopeful, with tenants optimistic their concerns will be acted upon this time.

Cai has several additional reasons to feel hopeful: a recent X-ray shows improvement to her hip, and she has filed the paperwork to access the accommodation supplement.

In the coming weeks and months, she can hope to harvest an increasingly fruitful bounty from her garden. The earliest seedlings have sprouted, a scattering of chives.

She will use them as a filling for dumplings, and, while forces beyond her control click into gear, the mother and her daughter will eat tonight.