Story: Housing

Page 6. Tenure

All images & media in this story

Renting

One of the attractions of colonial New Zealand life for workers was the opportunity to buy a piece of land and build their own house on it. Relatively high wages meant some working people were able to realise this aim, but the higher cost of land in cities meant workers were often priced out of this ideal and rented their homes instead.

Unfit for human habitation

In 1900 a reporter toured Dunedin’s slums and found that ‘[e]verywhere the same unclean, ill-constructed, and dilapidated tenements were met with, and it is little short of remarkable that there should be such a large number of houses in the city that can only be classed under the heading “Unfit for human habitation.”’1

Slum landlords

Investment in rental housing could be profitable because demand for housing in cities usually exceeded supply, so landlords could charge elevated rents. Due to the high demand there was little incentive to maintain properties, which as a result of their mainly wooden construction degenerated and became slum-like. Municipalities had few powers to make landlords improve their houses other than ordering their demolition as a health risk – mayors and councillors were sometimes slum landlords themselves.

State intervention

Such conditions led Richard Seddon’s Liberal government to initiate a state rental housing programme in 1905 to compete with the private sector and raise housing standards. The scheme failed to fire and the succeeding Reform government scuttled it and promoted the ideal of a property-owning democracy instead. For most people renting would be a brief interlude between leaving childhood homes and entering the home-ownership market themselves. The government provided cheap State Advances loans for approved families to build their own suburban home, but the 1930s economic depression forced many new home-owners back into renting.

Renting was given a further boost with the first Labour government’s state rental housing programme, designed to offer tenants the security of freehold ownership without the worry of upkeep. But the succeeding National government believed home ownership was morally superior to renting and offered state housing tenants cheap credit to buy their homes.

Home ownership peaks

Governments in the second half of the 20th century continued to promote home ownership over renting through numerous subsidies, and in 1986 the national home ownership rate peaked at 73%. After that time state home-ownership subsidies were reduced, which, alongside escalating housing costs, made it harder for first-time buyers to enter the market. By 2006 the home ownership rate had slipped to 63%. The long-held 20th-century ideal of New Zealand as a property-owning democracy was in retreat.

Footnotes:
  1. Otago Daily Times, 13 June 1900, p. 3. Back
How to cite this page:

Ben Schrader, 'Housing - Tenure', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/housing/page-6 (accessed 14 November 2019)

Story by Ben Schrader, published 5 Sep 2013