Why The Property Ladder Feels Locked

SPEAKER_00 0:10

If you ever wondered about how to get on a property ladder using progressive home ownership, this is the episode for you. I've got Nick Green with me in the house. He's the chief executive officer for Habitat for Humanity Central Region, and he's led the organization since 2009. His work with Habitat focuses on helping communities access safe, stable, and affordable housing, including progressive home ownership, community rentals, and other housing support programs. Now, for this conversation, Nick is going to bring us a long-term perspective on housing affordability and the practical barriers people can face when trying to move from renting towards home ownership. Hello, Nick. Good morning. Good morning. Thank you so much for coming all the way from the Tron to the Mighty Carpete.

SPEAKER_01 0:56

It's a pleasure to be here. It's a beautiful day here today.

SPEAKER_00 0:58

Well, I tried my best to put a sunshine for you. Nick, we've been chatting randomly because I've recorded a podcast around Kayanga Ora Progressive Home Ownership that's no longer there anymore. Well, there was a shared shared equity program. And someone suggested that I reach out to you. So I did. And then you were like, yeah, cool. Let's talk about this because you're just as passionate as I am about getting people on the ladder. So tell me what the habitat

What Habitat For Humanity Actually Does

SPEAKER_00 1:26

for humanity does? Who are you guys?

SPEAKER_01 1:29

Yeah, look, we're a we're a community housing provider. We've been in New Zealand for over 30 years, but we're part of a global habitat movement that came out of the US in the 70s. And really the cornerstone of who habitat is has revolved around our progressive home ownership product, a rent-to-buy product predominantly, where we take families who are excluded from the housing market and give them a hand up, not a handout, put them into a program where over a period of time up to about 10 years they can achieve ownership of their own property.

SPEAKER_00 2:03

So can anyone participate in that program or do you have some criteria of who ticks the box?

SPEAKER_01 2:10

Yeah, I mean it's we work with people of a wide variety of backgrounds, but obviously as a charity um we do focus on those people in housing need. So, you know, if you can get yourself into the housing market, then um then we're not the the route to take. But for those people who are your kind of normal, hardworking Kiwi families who are just either a little bit short on a deposit or a little bit short on a be able to service a mortgage, um, our product is a way in which we can kind of bridge that gap.

SPEAKER_00 2:40

I am curious to know more. How does it work and who funds it?

SPEAKER_01 2:45

Yeah, well, great question. It's been over the last 30 years, that's changed a lot. Where we when we first started, it was very volunteer-driven. You know, we'd build the houses ourselves, we'd have volunteers on site standing up walls and doing things, and we'd do maybe one or two houses a year. Um, everybody would feel really good about it, then we'd all be a little bit tired, and we're going to have a lie down and come back again next year and do it. Obviously, the demand is massive. And so to take it to scale, we've had to change uh our model a little bit. Um, we've grown as an organization and uh and we've started generating income of our own. We run second-hand shops, which generate a fair bit of income for us. We uh access philanthropy through trusts and and generous New Zealanders, and the government are a co-funder in recent times under their progressive homeownership program, which helped co-fund some of that that work as well. Um, so you know, it's it's a little bit of a community of um of of need coming together and uh and working together to deliver that um that housing product.

SPEAKER_00 3:45

I love that because I feel like there's a such a huge need right now for that.

The Real Barriers Income And Deposit

SPEAKER_00 3:50

Not many people can get on the ladder straight away, because as you mentioned before, there are barriers. I want to know from your point of view, what barriers are you seeing versus to what I'm seeing in my field?

SPEAKER_01 4:00

Yeah, uh look, the barriers are probably pretty consistent between you know, between us really. We've got families who are you know employed working in in you know sort of in full-time jobs, but their um level of income is just is just a little bit too low. Um, you know, sort of less than $100,000 a year, you really struggle to get onto the property um property ladder. Um so even when you've got two, you know, two minimum wage people in your family working full-time, um, you know, you don't really hit that number. And so that's uh that's one of the problems. The other issue is is deposit. You know, getting your deposit saved up while you're paying rent is a is a challenge for a lot of people, especially when you've got kids and you're paying other costs, then you know you really are excluded from um you know from the mainstream um financing approach to uh to buying a property.

SPEAKER_00 4:50

So then how can they afford to buy with you? How does it work? Tell me more.

SPEAKER_01 4:53

Yeah, so I I guess we started this conversation with uh with the term progressive home ownership, and it's kind of a um a catch-all for ways to subsidize or create a subsidy in that in that ownership space. And so um, you know, when you talked about Kyang Order and their program recently, um, you know, that was a shared equity program. Our program has traditionally been a rent-to-buy program where families move into the homes that we but we acquire or build, and then they pay rent for the first five years. And during that time, you know, we sort of keep them stable, we help them to, you know, solve any of their debt issues, and then at the end of the five years, they move on to a long-term sale and purchase agreement, which you know kind of gives them that homeowner experience. They are an owner of the property. It's a bit like a normal sale and purchase agreement, except it's got a deferred settlement. And so if you combine all of those components together, you have a house that's priced seven, ten years ago, and by the time they're finished. And so who wouldn't buy a house at the price it was seven years ago, right? I mean, so that equity gain the family gets to keep. Um, the rent that they're paying to us, we take out,

How Rent-To-Buy Builds Equity

SPEAKER_01 6:05

you know, sort of the costs to us and we pass whatever's left to the family. So they're building a deposit over that period of time as well. They can also pull their KiwiSaver through. And so, you know, all of those things combined mean that at year seven, year eight, year nine, the the refinancing, so they'll go off to the bank and refinance habitat out, it makes it really achievable for them.

SPEAKER_00 6:28

Wow, this is really, really cool. Like I'm blown away that I didn't know about you guys all this time. So, how come I didn't know about you and how many other New Zealanders don't know about you? And how do we get more New Zealanders to know about what you guys do?

SPEAKER_01 6:41

Yeah, I guess you know, Habitat is a um we're we're an organization of action, not an organization of talking about ourselves very much, um, which is a you know a benefit and a detriment. But you can't sell a secret. No, no, that's right. So I I think you know, part of it has been a s a lack of scale. You know, we don't want to overpromise. You know, we when we first started as an organization, we were very, very community-based and we'd have a like a in a church hall and we'd say, come along if you would like to own a home. And of course, a lot of people would come along, but we only had one or two houses. And so, you know, we don't want to set people up with expectations and then sort of, you know, yet another decline for them. You know, we we want to we want to work with people, we want to work with community groups to get the right people coming through the pipeline and then you know, make sure that we've got sufficient supply at the far end in order to put people into those properties.

SPEAKER_00 7:32

Yeah, because that was going to be my next question. Where do you get the supply from? Yeah, I'm sure there's not a problem with the demand, but the supply.

SPEAKER_01 7:40

Yeah, yeah, and I guess it's two parts, right? One is that we work with developers, we um we do some of our own developments, so we we build those houses ourselves and we try to do that at a really affordable base. The other real constraint is capital, because as you can imagine, you know, it's a very capital-intensive program. Um so for us to be able to purchase those properties um and hold them for a period of time and pass all the equity back to the families, which is one of the key parts that makes it work. Um, you know, that's it.

SPEAKER_00 8:10

So you're not really making money on it.

SPEAKER_01 8:12

No, and that's why we do other things to try and generate income so that we can we cross-subsidize the program. And yeah, we're looking at a few other ways of doing progressive ownership. You know, you know, shared equity is another model, but again, it has its has its challenges. You know, there's kind of a leasehold model where you never sell the land, you only ever sell the improvements on top of it. And each of those products sit within this progressive home ownership kind of catch-all, and each of them have a target market that works best for a certain family. Because what we really want to do is understand people's circumstances, right? What is the actual barrier that's stopping you from getting and realizing your home ownership aspiration? And then how do we fix that barrier? Because we don't want to oversubsidize because every dollar we put into there we can't use somewhere else. So we want to make sure that, you know, for the home ownership uh rent to buy program, we're picking families who you know aren't able to generate us a deposit now, aren't able to service a mortgage now, but in the future we'll be able to. So let's do a little bit of time travel and hold them in a place where they can refinance out and in that five to five to seven, seven to ten year period.

SPEAKER_00 9:21

Do you work with particular banks or do you just let people go and figure it out themselves?

SPEAKER_01 9:25

Yeah, well, look, we let people kind of have a little bit of autonomy in that space. You know, we don't want to be micromanaging people, but we do and give them referrals through to trusted partners, you know, people that we understand and understand our program, right? So, you know, we work a lot with the ANZ at uh at my affiliate. They are they've been incredibly supportive of us for over 30 years now, and which you know gives us access to to lower cost finance. Um there's a government underwrite that helps with our capitals on that side of it. Yeah. But when it comes to families looking to refinance, then you know we'll say to them, look, you know, here's two or three people, trusted partners, go and have a chat, understand what your own circumstances are. Financial literacy is a huge part

Money Skills And Sweat Equity

SPEAKER_01 10:10

of this.

SPEAKER_00 10:10

Yeah, I was gonna touch on that. What do you see?

SPEAKER_01 10:13

Yeah, I see people who don't understand, you know, how money actually works.

SPEAKER_00 10:18

How do we fix it?

SPEAKER_01 10:19

We've just got to keep on talking about it. We've got to keep on helping people to you know kind of dig into that space because it can be daunting or it can be boring, right? You know, and so you know, when we work with some of these families, we're sort of saying to them, hey, look, let's just start small, let's start with your budget, let's let's talk about what equity is. And of course, I'm not a registered financial advisor, so we need to work with people who are to be able to give them that skill set because it's just like anything else, right? You you need to understand how something works before you can engage in it fully.

SPEAKER_00 10:52

I was just thinking that it would be really cool to run some financial boot camps, like just intensive, you know, four weeks, eight weeks, but give people that absolute ground foundation that then they're able to look after their homes and stuff. Because I guess while they're renting from you, rent to buy, who is responsible for any repairs or damages? Who looks after?

SPEAKER_01 11:15

Well, as a landlord, we have that responsibility. We have a we are under a Residential Tenancies Act umbrella. So we do hold that responsibility. But part of the partnership we have with the families is has some education hours. We call it suite equity. And so, you know, they do some work around their own property, and we teach them maintenance, we do some maintenance programming and stuff, and we do some financial literacy training with them. And so they tick off those hours as a part of the program. Nice. And um, you know, and you've got to keep on coming back to these things because, you know, we all know when we're at school, right? Your teacher says something once and you're like in one ear and out the other. And so, you know, we keep on working with families at their pace to say, you know, what do you want to know next? What's what's you know, how how's how did that last sort of bit of information sink in? You know, what is that, what has that taught you? And it's amazing to watch these, these, these families just grow and you know, move to a point of going, hey, look, man, I get it now. That's so cool. If I do this and this and this, then I can, you know, sort of go off and I can I can own this house. And you know, that's the that's the great moment, is when people kind of take that previous space where they just didn't think it was possible, and then suddenly it's like, oh my goodness, this is possible. I can actually do this, and you know, for my kids this will mean, you know, a secure future. So, you know, that that's part of the reward of the job, I guess.

SPEAKER_00 12:38

I love that because I think that's so, so important to show people the way. And I think you if you show them the way, it's like giving them a map and then they know where they're going and then they'll get there. Now, my question to you about the renters, so if they sign up with your rent to buy, can they come out of that? Yeah. Yeah.

SPEAKER_01 12:56

It's not like signed up for life. No, no, not at all. And I think you know, one of the things that as a charity, as a community housing provider, you know, our we we exist to support families to achieve their aspirations. If they get part way through the program and they go, actually, this is not for me, then we're like, well, great, that's you, you you figured out what is for you. How do we help you know make that alternative choice? And we've had a couple of families recently who've had, you know, were in our program and then suddenly had an opportunity to go and do something different, move back to to Fenoua, owned by family, and you know, we're not going to stand in their way of doing that. And so we're you know, more than happy to support them to make those choices and uh and exit the program and and go and do something that works for them. And we take that property back and we put it back into the pool and we select another family and we start again.

SPEAKER_00 13:50

Okay, that's awesome. How many New Zealanders do you think you've helped over the last your your tenure? Let's look at from 2009.

SPEAKER_01 13:59

Yeah, oh look, it's across so so habitat is a is a um federated model, so there's there's four habitats in New Zealand. Yeah, so across the four of us, we've probably helped over 500 New Zealand families achieve home ownership through through our um rent to buy program. It sounds a lot, but it's actually a very small number in the big scheme of things. But you know, that's 500 families who are living in a home that they never would have been able to without.

SPEAKER_00 14:27

I was about to say the same. I was about to say the same, even though the number may sound small to some people, it's still 500 families that now have a roof over their head that they can call themselves their home and they're not going to be getting kicked out because the landlord decided to sell it. Not you, but you know, yeah, if they were in a normal rent renting situation. Yeah. That's incredible. And in terms of building houses these days, the cost of living gone up, the building price has gone up. How can you continue to build houses or find stock that's sustainable?

SPEAKER_01 15:00

Yeah, I look at that that is a huge, huge challenge in the New Zealand market. You know, sort of that period of massive growth that we saw in the last five years or so has meant that even, you know, even a small two-bedroom terrace property is is simply not affordable. And when we talk about affordability from a habitat perspective, we're talking about it reference to the family, not to the market, right? You know, people say, oh, you know, what how how much is affordable? Is it 80% of market? Well, it could be it could be 60% of market, it could be 90% of market. It depends on the income of the family, right? And so for us to be able to continue to acquire stock or develop stuff ourselves that at a price point that works for the families that we're working with has become more and more difficult. And we can only really do it with great partnerships with developers. You know, we've got some amazing developers that we work with across New Zealand. I know some of my colleagues in the other parts of Habitat have got some fantastic relationships as well where you know people pass through things at cost. We've got you know national relationships with with suppliers that uh that really do help us with that end price point. But it it's it's not an easy, it's not an easy thing to do.

SPEAKER_00 16:16

No, and you mentioned there are four different chapters, federations.

SPEAKER_01 16:22

Yeah, affiliates we call ourselves.

SPEAKER_00 16:24

What what areas do we cover of New Zealand?

SPEAKER_01 16:27

So look, we're we're nationwide. We've got a a group that covers sort of Bombay's North, which looks after sort of you know the top half of New Zealand. Um, I look after the bottom half of the North Island, then we've got a Nelson-based entity that looks after the Nelson-Talisman area, and then the rest of the South Island. And there's a Habitat New Zealand national office that that looks after a lot of our international programming, because we do work in the Pacific as well, in Samo and Tonga and further afield into the Asia Pacific region from an international programs perspective.

SPEAKER_00 16:59

Wow, that's a lot. That's a lot to cover. And where do you see the most demand for housing?

SPEAKER_01 17:06

Uh it's everywhere. It just the demand is different, right? And so in our kind of metro areas, you know, the Auckland, Hamilton, Christchurch, Wellington regions, you know, there's this huge demand for affordable ownership and affordable rental properties because you know, rents in those regions are quite have gone going up and up. In our more rural areas, there's still a lot of demand for rental property. And actually, you know, our home repair program is quite so quite strong in the rural regions as well, because you know, building new is great, but actually there's a lot of properties that need a a bit of love because of my second leaf lease on life. And especially with you know, we've got a relationship with Wakoto Tainui um in the Wakata region, you know, tribal members who are living on Fenua that's you know got multi-generational history to it. And um, yeah, we go out and um do repairs and things to those properties.

SPEAKER_00 18:01

That was going to be my question about giving the second life to properties.

Critical Home Repairs With Microfinance

SPEAKER_00 18:04

Let's talk a little bit about your other program, which you just mentioned, the home repairs program. Tell me more about that.

SPEAKER_01 18:11

Yeah, so look, home repair, as as the name suggests, is about um is about identifying property that needs needs a little bit of love. You know, it's not a cosmetic program, it's a um, it's a program that really focuses on the fundamentals of what makes a home home, you know. So it's weather tightness, it's accessibility, it's kind of healthy home stuff. So, you know, we'll go in, we've got a team of inspectors who'll go and you know, look at the property and say, look, it needs a roof and a bathroom, and then we work with the families on a sort of a microfinance type approach where we've got some lending again with another great partner with the BNZ who've given us interest-free lending. So we're able to pass that money through to the family at an interest-free loan basis. They'll repay it, you know, sometimes $10 a week, and we'll commission that work or deliver it ourselves and uh and bring the house back up to a um sort of a livable standard. And, you know, it's so many stories of families who've been living in homes that you know, the bathrooms, the the floors rotted out and they can't even get in there and you know, $15,000 to completely renovate the bathroom and and do some other work on the house, and suddenly the house is is usable again.

SPEAKER_00 19:22

So, how do those people get in touch with you? How do they know about you? Or is it part of your pool of people? How does it work?

SPEAKER_01 19:28

So it's a different, different pipeline of people. We work with with the sort of the health agencies, Hawata agencies. Um so we get direct referrals from people because you know there's district nurses going out and seeing these kind of things. With Waka Tata Tainui, they have a they have a direct relationship with their tribal members and so they put out expressions of interest. Or you can just jump on the website and and you know, fill in a form expression of interest directly with to us if you're living in a if you're a homeowner living in a property that needs some maintenance work done on it. And like I say, it's not cosmetic, it's it's critical repair.

SPEAKER_00 20:00

You know, we're we're so you're not gonna come and paint the uh walls just for the fun of it.

SPEAKER_01 20:04

No, no, we don't do carbon curtains, but but we do, yeah, we do yeah we do those those really key things, you know, the accessibility and safety of of a property.

SPEAKER_00 20:12

Which is so so important. I mean, there is a lot of older houses in New Zealand that I'm just horrified at the standard, the way they were built, and now what's happening to them and the people are still living in them, and no wonder they're getting sick. No wonder, you know, the statistics were showing the amount of people that have asthma and health-related issues because of the housing that they live in.

SPEAKER_01 20:35

Yeah, yeah, absolutely. And you know, we see it when you know my my team said every day they're they're out. Heartbreaking. It is, but it's also it it kind of it sounds a bit kind of counterintuitive, but it's what people get gets people out of bed, right? It's the it's the they want to go out and make make that difference. And so, you know, we've got a great team of builders who you know are out on the job today, you know, fixing bathrooms. You know, we've got great tradies, subbies who come and do roofs and plumbing and electrical and stuff for us. And you know, every single one of those people is doing it because they they believe in what they're doing. You know, this this is not this is not new build, right? This is not the nice sites to go to. These some of these can be quite confronting um from how people are living and also the the general standard of the property. So, you know, having those guys who understand the program and are willing to you know sort of jump in there and and get that work done is is incredible.

SPEAKER_00 21:28

Oh, it's satisfying, right? When you've managed to make a huge difference to someone's life, it's absolutely satisfying to watch that. So just so I get it right, people get a loan through you. You get a loan through BNZ, interest-free. You you pay your treaties, the job gets done, and then this homeowners owe money to you. And then they've got some sort of agreement to you to pay it back.

SPEAKER_01 21:52

That's right. Yep. And it's interest free. So it's um, yeah, it's passed through at uh at no cost to the uh to the homeowner from the interest perspective. And uh yeah, they just pay it back over three to five years on a on a zero interest basis.

SPEAKER_00 22:05

Do you I was just thinking about your finance department, that would be probably a huge department trying to keep. Part with all those different things that you've got going on.

SPEAKER_01 22:12

You'd think so, wouldn't you? I've got three finance people within my within my entity, and yeah, they they they earn their money. So you know, there's a there's quite a diversity of of activity in there. Obviously, they're looking after the rent to buy and and dealing with all that kind of stuff. They're dealing with all the invoices and things from the from all the trades and things we're engaging with. They're dealing with you know sort of microfinance lending, and uh, and then we've also got a you know quite a significant rental portfolio as well. So they're they're looking after that. So yeah, they um they definitely earn their keep.

SPEAKER_00 22:46

Yeah. Rental portfolio. Tell me how many properties do you have, Dino? On the top of your head?

SPEAKER_01 22:50

Yeah, about 250. Wow.

SPEAKER_00 22:53

That's a lot. Yeah.

SPEAKER_01 22:54

Yeah, and it's growing, you know, because as I said, we are a community housing provider and we were successful in the recent round, flexi funding round from the government. So we're going to add another 35 units to that over the next 18 months or so. You know, that's been something that we're really proud of, actually. We've had a real focus on older people. We we bought some pensioner housing about 10 years ago when the council was divesting itself of pens of pensioner housing. Yeah, because where do they go? What happens? Yeah, yeah. Well, this is the problem, right? Is that um, unless you provide that kind of subsidised rental locations for older people, they're on a fixed income. You know, superannuation doesn't cover much of the costs of living. So for us to be able to provide, you know, affordable rental properties for those older people is a significant part of our portfolio. And yeah, so so we love it. And we've definitely had our moments of of learning how to be a good landlord with you know quite a diverse range of people. But you know, my team are are incredible. So yeah, they uh I'm just thinking as as I'm talking, you know, we've got a a care facility in in Tiamutu called Freeman Court. So it's kind of a boarding house arrangement. But you know, the people the the older people who live in there, you know, it it's their home. Yeah. And and you know, for them, it is, you know, they can't go to a boop or uh, you know, sort of you know, the um the other you know, sort of expensive retirement homes. So, you know, we give them an option and uh and you know, they they love it. They they go there, they make a make friends, they've got a community around them, and uh, you know, they uh they've got a place to be.

SPEAKER_00 24:35

Yeah, and I think it's also so important at their age to have that community around them because again, the loneliness epidemic is massive, right? People get to an older age, the kids are not here, or if you know whatever happened in their life, and then they suddenly find themselves all alone. And again, that is a massive cause to all the other health issues that follow on. But the research shows that if you actually surround yourself, because we are tribal humans, right? We've come from ancestries of being in a tribe, and you've got to surround yourself, you've got to find your tribe. And sounds like you guys have really nailed that part.

SPEAKER_01 25:13

Yeah, and I think it's about giving people options, right? I mean, I'm a big believer that you should have options. So, you know, and money gives you options, you know, the more money you got, the more options you got, generally speaking. But when you haven't got though that sort of financial backing, then you know the options beget smaller and smaller. And so as a you know, as a charable, charitable entity, you know, we we want to sort of deliver that space where people can can have options. And so, you know, at Freeman Court, you might want to go and sit in the dining room and and you know, sort of chat with people, or you might want to go back to your own room and and just have some time to yourself. Yeah, it's it's it's their home. And yeah, you know, I was there last week and one of the um one of the ladies was like, Oh, sorry, sorry, I'll get out of your way. I was just doing a couple of little maintenance jobs, and and and I said to her, No, you know, this is this is your home. I'm I'm in your home at the moment. So you just do what you need to do, I can wait. And uh, you know, and I sat down and had a cup of tea with her, and it was it was great.

SPEAKER_00 26:05

And she probably loved it, it was probably the highlight of the day.

SPEAKER_01 26:08

Yeah, do a little bit of undercover boss like d don't tell her who I am and just wander in. So yeah, it's it's quite cool.

SPEAKER_00 26:13

I love it. The undercover boss. I was just about to say, were you just like actually hands-on, or were you, you know, testing out the waters of what's going on there?

SPEAKER_01 26:21

I can I I I can be a bit naughty sometimes. Um I'm sort of the um I love getting my hands dirty when when I first applied for this role. The uh the job ad said build site to boardroom and everything in between. And so I've sort of held them to that. So I love being uh out on the build site and you know, not using power tools. My my my builder doesn't like me using power tools, he reckons I hurt myself. But but you know, definitely that being there and amongst it all. So and and I was doing a little bit of IT stuff. We needed some access points moved, and so I was just doing that while I was while I was out there, and you know, I just tell everybody I'm the IT guy. It's uh you know, it's good.

SPEAKER_00 26:56

But that's the best way to know what's going on on the ground, right? That's the way you connect to people that actually are your clients, people that need your services, and the only way to find out what they need is to get in there and to find

Ready To Rent And Tenant Confidence

SPEAKER_00 27:12

out.

SPEAKER_01 27:12

Yeah. Yeah, and you know, one of our other programs that we run, we run some education programs as well. And so we do a course called Ready to Rent, which takes, you know, people from emergency housing and transitional housing. You know, so people who've been, you know, really excluded from the housing um market. And and we, you know, over a period of two days work with them and kind of give them a little bit of education on what it means to be a tenant, um, you know, what it means to maintain your home, you know, what your rights and responsibilities are. And you know, you're in this room with you know 15 to 20 people who've been in hotel accommodation for you know any period of time, some of them for for a year or more. And you know, it's quite grounding because you get to hear their stories and understand how they ended up there. And it and in most cases it's not because they want to be there.

SPEAKER_00 28:01

Um and it's nobody wants to be in emergency housing.

SPEAKER_01 28:04

No, and you and yet some of the rhetoric around it, you know, becomes like, oh, you know, why don't I just get a job? Well, it's just not that easy. And when you actually take the time to sit and talk with some of these people and understand their circumstances and their backgrounds, you know, the least we can do as a community is to get alongside them and give them some ability, you know, some resources. And uh, and you know, the difference that that makes to them. Our programme's been really successful. You know, this is not about getting them into public housing, even. This is getting people into the rental market, the private rental market, because you know, a lack of confidence when you turn up at a house viewing can be the difference between getting offered the house and not getting offered the house, right? And so we help them understand, you know, where to find that confidence.

SPEAKER_00 28:52

I think, like as I think about this, you know, I think about all the people that come across my desks, my office. And there have been cases where I had young people sitting across me that said to me, no one in my generation ever owned a house. We always rent it, you know, and we went from state homes to emergency homes back to state homes. I don't think it's even possible. Like, I don't even know where to start. And you know, for me, that's always a bit of a trigger going, how? How do we help these people? Because how is that part of their belief system that they cannot own the property? And how do we take them from that place into the home ownership? But also whatever else comes with the home ownership that people have no idea about, right? It's the rates, it's the insurances, it's the repairs. Suddenly you're responsible for everything. Yeah. And that can get quite overwhelming if you haven't been taught or prepared for it.

SPEAKER_01 29:45

100%. Yeah. And I think, you know, it is that it takes quite a strong individual, right, to be able to break out of a out of a system. Yeah. You know, if you've grown up in that space where, you know, all you know is is this, then you know, what motivates you to break out of that? It's very rare. But when you give people sort of, you know, you broaden their horizons a little bit and sort of say to them, yes, you can absolutely achieve this, or even start at the center and go, what is it you want to achieve? You know, what is it that um motivates you for home ownership? Because to be honest, you know, sometimes home ownership is not the right solution because of what as you've just described, right, the costs and all the challenges that go with it, you might be better off staying in a rental property, but that should be your choice. It shouldn't be imposed upon you. And so, you know, being able to say to people, well, these are the this is the reality of it. This is how it actually works. You know, is this what you want? Because actually, if you know, when if I'm really pragmatic, pragmatic about it, I think home ownership offers two things, right? It offers security of tenure. You know, you kind of can live in your house if you own it for as long as you want to, which is quite different to the rental market, where you're at the the whim of somebody else, right? Potentially.

SPEAKER_00 31:01

You're at the mercy of whatever happens in the landlord's life. And it and it doesn't mean that the landlord is bad, but I mean, things happen, right? I've had situations where the landlord just passed away and his family suddenly takes over and they need to divide the inheritance, and you're part of that inheritance plan now. So the property has to be sold. Or I had situations where the landlord split up, so one person needs to move back to a house. So it's not just because the all landlords are bad or all tenants are bad, it's just life happens.

SPEAKER_01 31:31

Exactly. Yeah, and and you know, we don't want to villainise anybody, right? I mean, it's like as you describe, you know, landlords are uh people, you know. I know that might not resonate with some, but but you know, landlords are people, and so they've got their own reasons for doing what they do, and part of that is you know, they might sell the house or they might need to move a tenant along, but that tenure security, if you own the home, you get to decide that for yourself, right? And then the other side of it, of course, is the financial side. And generally speaking, if you own your own home, then financially over a longer term you're better off. So, you know, you can kind of understand that those two things work together, and you know, if that's what you're aspiring to, then great. But if you know, if you're actually comfortable over here and and financially you might be better off, I don't know, having a share portfolio and paying rent. But you know, understanding that from your own perspective is is quite important.

SPEAKER_00 32:26

Do you see bad tenants?

SPEAKER_01 32:29

Yeah, yeah, 100%.

SPEAKER_00 32:32

Yeah.

SPEAKER_01 32:33

And and you know what? The the reality is that people have lives and life happens, right? And so some of our tenants, you know, make some bad choices. But that doesn't just happen in the community housing sector, that happens across the community, right? And so if you're a if you work for Harcourts, they're gonna have some bad tenants. If you work for Kong Order, they're gonna have some bad tenants. Unfortunately, the way these things hit the media sometimes is that the community housing tenants get get pictured as being the really bad ones, and you know, what happens over here doesn't make the news. So, yeah, we have we have tenants who we have to work with. I guess as a community housing provider, we have a lot of uh expectation on us that we will support those people as much as we possibly can. And you know, we take that quite seriously, and so it means you know, we'll we'll kind of try to understand what's driving their behaviours and try to you know help them make better choices next time. But there's always a there's always a time where you know your choices have consequences, and that might mean that you end up losing your tenancy if you keep on repeating the same mistakes over and over again.

SPEAKER_00 33:44

What are some of the mistakes that you see?

SPEAKER_01 33:47

Poor financial management, you know, not not not prioritizing paying your rent or your mortgage payments. Um, you know, sometimes sometimes you've got to make sacrifices, and when money is short, those sacrifices seem significant, but you know, some of the um payday lending and some of that kind of stuff uh doesn't help really. And so people end up having getting themselves into really poor financial positions. We see issues with not always the tenants, but sometimes they're extended Fano. You know, so if you've found yourself somewhere to live and you've put down some roots and you've kind of got yourself sorted out, sometimes you know, that circle of friends and far now around you kind of pile in and bring all their issues with them, and that can endanger someone's tenancy. So, you know, we we do try to make sure that we support people where it's it's actually not them, it's the it's the wider, you know, wider group that's causing the causing the trouble. And sometimes it's just people just continue to do bad behaviour, you know, they just continue to bring behavior that was that the that got them evicted last time into a new tendency and don't change. And they haven't learned. No.

SPEAKER_00 35:06

No, and I wonder I wonder what can make them change that behaviour. I'm always fascinated about humans and how their brains work.

SPEAKER_01 35:14

I mean, the only person you can change is yourself, yeah. Right. And yeah, at the end of the day, we can work with people and we can support people, but they've got to be willing to make those changes. And sometimes they can't. But you know, and and the the the interesting thing is it's such a small percentage of our portfolio. You know, like I I think last year we had two evictions. Just two. Two. Wow. Yeah. So you know, it's it's it's not a it's it's not a massive part at all. It takes it's very time consuming, but it's not a big part of our of our day-to-day.

SPEAKER_00 35:54

Because I was just thinking that, you know, when the moment people hear community, community living or something, you guys do get bad rap. Like automatically people think, oh, bad tenants or trouble tenants. But in reality, I think it's actually could be probably the opposite, because these people know, well, majority of them would know you've given them a chance when no one else would. So therefore, they would try harder to be better tenants, to be on that pathway for home ownership. So they wouldn't do things to jeopardize that. That's in in my view.

SPEAKER_01 36:28

Am I on the right track there? Yeah, look, I think that's probably part of it. And but the other part is that they're very highly managed. Um, you know, because we are working with them very closely, you know, it's not like we only do an inspection every 12 months and see you later. You know, when when neighbors do contact us and sort of raise concerns, we take those really seriously. And our tenancy managers are there and they'll work with those those people and do the things that we need to do to try and create the community that we all want to see. When we talk with them at Ready to Rent, I say, you know, the the most the most dangerous thing to your tenancy is an upset neighbor. You know, because if someone, if you're, if you're behaving in a way and the and you're upsetting the person next door continuously, that person's gonna be on the phone to us continuously, and that cycle's just gonna continue, right? The best thing you can do is make friends with your neighbours and behave in a way that that you want to see people behaving towards you as well. And you know, for and as I say, for the vast majority of our tenants, that's that's their life. You wouldn't even know that there's a community housing provider, person living next door. You wouldn't know. That's not always the case, but for the vast majority.

SPEAKER_00 37:44

What do you see in terms of people wanting to buy and to get into their home? Is it younger people? Is it mid midpoint? Is it older people? What do you see the most at the moment?

SPEAKER_01 37:55

Most of it is younger people. And I guess some of that's trajectory, right? It's rumway. You know, if you are if you start that journey earlier, then you've got you know a longer period of time you can have a mortgage for, which makes it more affordable, you know, servicing costs, what have you. Um so you know, a vast majority of the families that we've are selected in our program recently have been kind of in that mid-20s to mid-30s kind of age range, you know, sometimes with kids or within with you know desire to start a family, that that's that's the usual kind of demographic. We do have some people who are you know sort of in those older years, but it gets harder and harder. And the way our home ownership program works with refinancing, yeah, the the older you are, the less runway you've got, right? You've got to be realistic.

SPEAKER_00 38:41

You've got to be realistic. Although I must say, my oldest client that I got into home ownership was the mortgage, is 75. And but she had a really good solid backup plan. She's a property manager, she's got a portfolio that she can sell to pay off the mortgage. Yep. But yeah, and then I also have 70-year-olds, I have 65-year-olds. So it's it's incredible to see, you know, that it's not just because you're 20, you know, you can get a 30-year mortgage, or 25 or 30. I've I work with a range of people, and it's incredible to see the path that they've lived, what happened in their life, and it's really important for us to understand what happened in order to see the the way forward.

SPEAKER_01 39:19

Yeah, yeah. Uh, we also see you know in our rental portfolio some of the older people, you know, coming out of relationships. Um, and that that's a big area of of demand for us, is you know, those either you know, relationship failure or you know, their partners died and suddenly they're like down to one one version of national super and and no assets. And so, you know, that's the other part of home ownership, I guess, is that as you get older you've got an asset base that you can convert to cash to continue you know living. You know, if you don't have that, then retirement is pretty grim.

SPEAKER_00 39:58

Yeah, I mean, and who knows by the time I mean I get there, whether the super will even be there. That's the biggest question, right?

SPEAKER_01 40:06

Very much, yeah. Yeah, I mean you you can't you can't predict the future, right? You can have a pretty good idea of you know, based on on history, but um, but you know, some of the indicators aren't that uh you know universal superannuation is g is you know not a guaranteed thing.

SPEAKER_00 40:21

No.

Why Housing Needs Policy Consistency

SPEAKER_00 40:21

So what are your future goals? Let's talk about the future a little bit. What are the plans?

SPEAKER_01 40:27

Yeah. Look, I think I've been in my role for for a long time. And I guess when I started, I had no idea that it would be what it is today. You know, we we've gone from three or four employees and one or two houses a year that we're building to you know about 80 staff and you know, sort of a $15 million budget annually. So um, yeah, it's it's been a period of of significant growth. And what keeps me here is it's it's always different. It's always you know something new to to lean into. So at the moment, we are, as I said, we've got money for the flexible fund. So we're doing some more rental property and and you know, sort of continuing to build the build the portfolio. You know, I I'd love to see us double the portfolio size because the demand is there, right? I think it's really important that we continue to work with with government as well, because we need their support. And so, you know, the future, a great future for me would be the home ownership support coming back into government in the future as well, and uh and but enabling us to do more of our you know more of our PHO uh progressive home ownership uh programming.

SPEAKER_00 41:41

We talked about government off the recording briefly. You've been around for such a long time, you've seen various governments come and go. How much does a different government affect your work? And now that we you know we've got election dooming upon us, yeah, what will that bring?

SPEAKER_01 41:59

Yeah. Look, I think that government are a key partner. You know, in a previous life I was in the military and so I had, you know, this view that I'm not really aligned one way or the other, right? I've kind of sit in the middle, government a voice of the people, and you know, that's a democracy. And so what I really want from government, and you know, I've said this to the to all the ministers that that I've dealt with over the years, is just some consistency. I think we need to stop making housing a political football. I think we need to make housing a bipartisan commitment to for the good of New Zealand. And so, you know, rather than making it a policy that might change from one government to another, you know, long-term commitment to funding affordable housing across the housing continuum. So, yes, we need to do some need to continue to fund homelessness. Yes, we need to continue to have public housing for those people for who can't get into the rental private rental market. We absolutely need to provide some support into the you know middle New Zealand assisted ownership space so that we can keep people moving through. Because any of these parts of the housing continuum, if we don't have a a pathway and have a runway, then you know they just get blocked up. You can you can get people out of hotels, but if unless you've got public housing to put them into, where are they going? If if you're in public housing and you've got nowhere to move to from there, affordable rental or ownership, then you're just gonna have to keep on building a lot more public housing. And you know, we as a country we can't afford that. And so we need to have government as a key partner, uh a trusted partner of the sector, and we need you know that long-term commitment and consistency. And one of the biggest issues we have is is the the move in focus, right? So, you know, commissioning houses, doing developments isn't something that happens in the next couple of weeks, right? You know, it's a it's a long term pipeline. And so for us to go, should I be looking for you know, property for twenty 2029, because you know, kind of like that's what we're starting to look at now, right? Is what are we doing in 2029? And that's three years away. But we don't know what what the government's going to be, you know, that that'll be another full election cycle. So, so yeah, I mean, my my plea to any of the political parties is just that you know, kind of putting aside the the party politics and committing to a a long-term housing focused plan. Because we know that when you get housing right, you get a whole bunch of other things right as well. Yeah. You know, people's health improves if you're in healthy long-term accommodation. You know, schooling and education improves because if you're not moving houses all the time and changing schools, you know, schooling outcomes for kids is much, much better. You know, building financial resilience into our community through home ownership is good for everybody. And when you when you create that kind of community, you actually start to break down some of the division and angst that goes on around, you know, sort of the haves and the have-nots, right?

SPEAKER_00 45:17

I loved it. I absolutely loved it because I feel like every time the new government comes along, you pinpointed it so well that, you know, who's gonna be the one that's gonna win the New Zealand votes by popularity contest. Really? Are we gonna appeal to the landlords or are we gonna piss off the landlords? Are we gonna, you know, make it look like more New Zealanders can get into homeownership, or we're gonna make it look like it's gonna get harder for them? So therefore, everyone, see you later in Australia, sort of thing. And and we've seen it, right, over the years. And I worked in the financial sector over the last 15 years as well, and I've seen all the ebbs and flows of how things, the levers that get pulled and the pools that open up, and we get this flooded market of inquiries, and then that increases the property prices and it just makes it more unreachable for New Zealanders, like you know, and and somehow along the way, over the last 30 to 40 years, I think the housing market became a bit of a game, a bit of a speculative game of, hey, I'm gonna buy property and then hopefully, you know, in the next 10, 15 years, I'm gonna sell it off and retire happily into the sunset. But I don't think it's gonna be the case any longer. It's not sustainable looking at the prices where they've been, to what they are doing now, and I mean how crazy it got over COVID. Like, how do people really get on the market?

SPEAKER_01 46:37

Yeah, yeah.

Stop Building Homes That Don’t Fit

SPEAKER_01 46:38

And I think some of the things we're building right either, you know, to chase the price point, we've ended up building the wrong thing.

SPEAKER_00 46:46

Yes, we briefly me talked about it offline as well at our first meeting. Let's talk about that for a second. The properties that are being built, like we've got some down the road there, you've know some, they're just not fit for purpose. Who's going to be living in them? Yeah.

SPEAKER_01 47:02

Yeah. You know, and again, if we come back to you know putting the people at the centre, right? It is, you know, basic sales. It's like, what's my market? Um, and then and what we've ended up with is driving again from a financial perspective and going, well, my market is someone who can pay $650,000. Is that your market? Because what you end up with is building a two-bedroom terrace, and yet you might be trying to try to, you know, a family of mum and dad and two kits. Yeah, yeah, and and you know, I I'm all for higher density living. I think people I think around the world we see that it it can work, but you know, doing it ad hoc and making that the only way to drive affordability is not the is not the answer. And so, you know, I think we have ended up with quite a distorted market. And the other thing, too, is that part of the drive from you know some government funding has been around one and two bedroom units because that's what the majority of the public housing wait list has indicated. And yet so we've got this glut of one and two bedroom units being built, which again is not necessarily good for the communities are being built in or even fit for the people that we're trying to try to place into them.

SPEAKER_00 48:15

But it's like, okay, cool, maybe we need one and two bedrooms, but don't make it a two-story place with the bedrooms upstairs. And if you're trying to cater for the olderly or disabled, like how are they gonna get up there? Yeah. It just blows my mind, you know, some of the places that I went to have a look at. And and then some of them are so tiny, you can't even maneuver around them. So, and I'm not a big person, I struggled. And then I was thinking of like, what if someone is disabled and they've got a wheelchair or they've got a walker? Like, how are they gonna get around without constantly tripping over things?

SPEAKER_01 48:49

Yeah, yeah. And so I think, you know, if if we come back to you know, trying to build property and build a community, we need a range of options that that suit the people who live in that community. So, you know, older people or people with disabilities, you know, those that accessibility of housing is really important. The overcrowding issue, we don't want to build really tiny little small houses and then wedge people into them because you know, the the living environment is poor. And so, yes, I completely understand the economics behind it, right? So it's not I'm not being deluded of going, well, Nick, you can't afford to build big houses. Well, we need to figure out a way, right? We need to figure out a way to make the right amount of stock in the right place with the right typology to deliver for the people who are in housing need. And you know, we've got a lot of really smart people in this country. It's a beautiful place to live. I'm sure we can do it, but we need everybody sitting around the table, and we need people to understand what their levers are, you know. And so we're talking about government earlier, we've talked about developers, you know, councils. Everybody gets a seat, right? But everyone needs to also understand what their role is in that seat. We often see people going, you know, well, I I might I might be a council, but I also want to have an opinion about this over here. And you're like, well, council, maybe your role should be this bit, right?

SPEAKER_00 50:19

Just stick to your role.

SPEAKER_01 50:20

Yeah, yeah. Just do this bit. And and I've got we've got great relationships with the councils we work with. But you know, sometimes that that that creep, that scope creep means that we get, you know, things don't work out as well as they could.

SPEAKER_00 50:33

Hmm. Interesting. I'm just I'm curious. If I could give you a magic wand and you could wave it, what does the ideal world look like to you today?

SPEAKER_01 50:42

Oh, that's always so it's such a simple question and such a difficult answer, isn't it? I I think what it would look like is us putting people at the center of what we're planning. You know, so we don't start with a piece of land or we don't start with a house design. We actually start with the people and understanding what they need, right? And then going, okay, how do we bring, you know, all the right components, all the right resources to bear that helps deliver what that particular Fano needs. You know, and we've seen when that does work, you know, the the guys from the community housing funding agency understood some of the financial barriers and they've worked really hard to create a financing product that works for delivering community housing. You know, so James Palmer and his team, you know, shout out to them. He is relentless at doing that, but he's relentless at doing it in his area of influence. Right? He's not trying to tell us what to build, he's saying, hey, here's a financial product. You know, some of the things the government have done, again, the government underwrite for community housing providers for financing that lowers the cost of lending to chips. Fantastic product. You know, we've we've used that ourselves to be able to lower the cost of capital and means we can do more with the money we've got. So, you know, there are these little components, but the components are just that. They're uh little jigsaw pieces, but the jigsaw, when it's put together, should be a picture of the people we're serving.

SPEAKER_00 52:17

Yeah. I love that. I love that. That's beautiful.

Aspirations Planning And Final Takeaways

SPEAKER_00 52:20

Thank you so much, Nick. Final question for you. What would you like people to better understand about the journey towards home ownership?

SPEAKER_01 52:30

Look, I'd really love people to sit down around their dining room table and you know and and talk to each other about what what are their aspirations. Right? Start with that. Understand where do you want to be, because then you can make a plan. And and you know, that might be home ownership. It might be yes is absolutely where we want to go. We want to put down roots, you know, we want to start a family, we want to have a secure future. And that then makes the hard times easier, because you can come back to that and go, why are we doing this again? You know, when when the mortgage is due and the rates are due and the insurance is due and you've got to feed the kids and the cat. And the Reg Joe's due on the car, and the yeah, the cat needs to go to the vet because that always happens, you know, and all these things are pressing in on you. If you've got that solid base and you know, sort of the you know, the housing analogy of a good foundation, right? If you've got that, then you can kind of reflect back on it and go, no, this is why we're doing this. This this is the thing that we're doing to get us to that point in the future. It's not a now thing, it's a it's a future thing.

SPEAKER_00 53:41

I love it. Nick, thank you so, so much. We're gonna include all the links to your programs in our podcast episode. And hopefully um more people can get onto the homeownership due to your programs. Thank you so much. Really appreciate. Enjoyed our chat thoroughly. But I feel like it's been 55 minutes of nonstop talking, my poor listeners. But it'll be nice to get you back as well, you know, after the election, you know, sometime next year and just reflect back on what it looks like now going forward. Love to over again.

SPEAKER_01 54:12

Thanks for having me. And uh yeah, as as I said, I could I can talk for hours. So uh love to come back.

SPEAKER_00 54:17

Thank you, Nick.