Invercargill's Deepening Housing Crisis

There is an old saying that "to assume will make an ASS of U and ME" and this is so true of Invercargill and Southland's housing. Invercargill is experiencing a slow population growth compared to the rest of the country and house prices are amongst the lowest too. Add that to the facts that Invercargill's population was around 2,000 greater in 1980, 11 schools were closed in 2005 and the Southland Regional Development Strategy's key goal was to increase the region's population by 10,000 by 2025, it would be reasonable to presume that housing supply would not be an issue.

Given the city's relatively static population the National Government chose Invercargill as one of the cities to lead its state housing asset sell off in 2015. In the 1980s the region had over 800 state houses and after continuous divestment, the remaining 360 were to be sold to a private or NGO social housing provider. At that time only a handful of people in Invercargill were on Housing New Zealand's waiting list.

Of all the cities in New Zealand that one would think should be a low housing priority for central government, it would be Invercargill. However, all these rational assumptions have been hugely misleading and we are now facing a very real crisis due to a culmination of factors:

• State Housing. No new state houses have been built in Invercargill since the early 90s and many of the remaining stock have not been well maintained. The waiting list is now five times larger than the previous year and rapidly growing. Housing NZ needs over fifty more houses to meet demand and current trends indicate that double that may be required in another year. The national level of state housing per head of population is about 1.3 houses for every 1,000 people, but in Invercargill we have around .6 of a state house for every 1,000. As another comparison we have 354 state houses for 55,000 people while Nelson has 565 for 51,000 residents (see earlier link).  
• Deteriorating Housing Stock. Invercargill's total housing stock is ageing, with a large proportion of deteriorating properties with little insulation and delayed maintenance. Despite the fact that the Southland region produces 12% of the nation's export income with around 3% of the population, it is a low wage economy. Many families and elderly can't afford to upgrade their homes and are forced to live in poorly insulated houses with high heating costs. There are a good number of houses that should be demolished (see images below) and are really unfit for habitation, sadly if they were demolished those living in them have nowhere to go. 
• Shortage of Retirement Housing. The region's population is also ageing and there is a shortage of smaller homes and town housing suitable to meet the needs of older residents. Those that do exist are in high demand and attract higher prices than the large three bedroom family homes our elderly are forced to retain. Many are not able to keep their large homes and gardens in good repair, which also reduces their value.
• Developer's Dilemma. The high cost of building in New Zealand and the low returns achieved in Invercargill means that there is almost no profit in building new houses in low income communities. The average cost to build a 3 bedroom home in Invercargill would be around $250-$270 thousand and there is currently a new 3 bedroom home for sale in South City with an asking price of $265,000. The only way to wring out a profit would be to squeeze as many houses as possible onto a cheap section. I understand only one developer is currently attempting to do this. 
• Shrinking Rental Stocks. Kiwi Saver and Invercargill's cheaper houses have meant that rental properties are being rapidly sold off to meet buyer demand. While this may be positive for some first home buyers, those who need to rent have to deal with shrinking availability and increasing rents. Those who have limited incomes and poor credit ratings have few options and many are now living in houses previously deemed uninhabitable. I have heard shocking stories of daylight visible through interior walls, baths and washing machines dropping through rotting floors and families cooking on BBQs because their electricity has been cut off. Only 33 rental properties are listed for Invercargill on Trade Me when I last looked. 
• Emergency Housing Stretched. Emergency Housing providers are currently being run off their feet with demand. The Salvation Army and other social providers are at their wits end trying to support and find accommodation for desperate individuals and families in Invercargill. Growing numbers are opting for camping grounds as long term accommodation. Women's Refuge is also struggling to find accommodation and I have been made aware of numerous locations around the city where rough sleepers hide away at night.
• Incoming pressures. The increased numbers of students being attracted to the city by the Southern Institute of Technology have also added pressures to a limited rental market. Many landlords can get more rent from groups of students than a family. In the wider Southland Region the growth of tourism, Airbnb and new industrial developments have also increased demand for housing.  

While many may think that Invercargill's housing issues aren't unique and the numbers we are dealing with are small in a national sense, that is actually a large part of our problem and why we are often ignored by central government. Proportionately we are dealing with housing quality issues and availability that make us one of the most housing challenged communities in the country. Given the very recent and dramatic increase in housing demand it is a rapidly worsening situation as rotting homes continue to rot, rental numbers decline and very few houses are being built.

I am a member of the Southland Community Housing Group and our members include representatives from many social support providers, the Salvation Army, Habitat for Humanity, iwi, city councillors and at a recent meeting we were joined by staff representing three local MPs. The majority of our group have had direct connections to the housing deprived in our community and we have been meeting and seeking solutions for over two years. Initially the extent of our housing issues were concerning, but still short of a crisis. We are now dealing with a perfect storm and the term crisis may be too mild to describe what is confronting us.

The following are a sample of several hundred houses around Invercargill that would be considered unliveable in many developed countries where good housing is a basic human right. Few of these will be insulated or have double glazing and affordable heating would be impossible.