Labour MP says council housing tenants should be able to access rental subsidy
Monday, 18 October 2021
Labour MP Paul Eagle has called a policy that prevents council housing tenants accessing a rental subsidy “unjust” at a public meeting organised by a group of tenants.
Eagle, who is the MP for Rongotai, appeared to break ranks from his party, which has refused to change policy around the subsidy since taking power in 2017, arguing that would result in fewer people being housed through its public housing programme.
The income-related rental subsidy (IRRS) fixes rents for low-income tenants at 25 per cent of income, with the Government topping up the rest. The subsidy is currently available to tenants with Kāinga Ora, and new tenants with community housing providers (CHPs).
Wellington City Council’s 3500 tenants cannot access the subsidy, and instead pay 70 per cent of market rates, with the council discounting the rest. Those settings have resulted in many tenants paying more than 35 per cent of their income towards rent. A solo mother, in one instance, paid 86 per cent of her income on rent.
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Critics of the policy say it has created a two-tier system within social housing, and a group of council housing tenants recently launched a campaign called IRRS 4 ALL, lobbying the Government to give them the subsidy.
“This [the policy] is really unfair,” Eagle said at the meeting organised by tenants behind that campaign. “It’s unjust, and something has to change.”
IRRS 4 ALL spokesperson Debbie Port – who lives in council housing – said access to the subsidy would reduce the Government’s spend on emergency housing.
“If they grant the subsidy, the council will get on and build more housing stock which will give [the Ministry of Social Development] a greater pool of options to house people. That means the emergency housing bill will go down. In effect, the Government will save even more money by granting this, and preventing homelessness.”
Port previously said tenants faced homelessness, as rents became increasingly unaffordable.
“It gets even harder if you’re homeless,” Eagle said. “We don’t want that. It shouldn’t happen. We’re a wealthy city. This city’s got a lot of money, and resources to ensure you can live a decent, and dignified life.”
He called on council housing tenants to write letters to himself, Housing Minister Megan Woods and Deputy Prime Minister Grant Robertson, asking the Government to treat them “the same as tenants with Kāinga Ora”.
City Housing, the council’s housing arm, was forecast to become insolvent by June 2023 – but access to the subsidy would drastically reverse those fortunes, turning a $6m deficit into a $5m surplus.
Mayor Andy Foster said the policy was prejudiced. “To me, this is a discriminatory situation,” he said. “In some cases, if you’re with a CHP, you’re better off. If you’re with the council, you’re worse off. That doesn’t seem right.”
The council wants to be able to access the IRRS, and is pursuing that option through meetings with the Government. It is also considering an alternative route: establishing a community housing provider (CHP) to which the council would lease its housing stock, and thereafter be able to access the subsidy – except only new tenants would be eligible.
The CHP option has been roundly criticised by the current tenant base, who said “nothing would change” as their rents would still be unaffordable.
Woods hasn’t ruled out extending the subsidy to council housing tenants, but has said the revelation earlier this month that $13.2m a year could fund the subsidy won’t “pre-determine the outcome” of ongoing conversations.