Growing up in NZ in the '60s and '70s meant doing things in a certain order. When you finished school, you got a job, you got married, and before you had the kids, you bought a house. But not any more. MAN: The matter of affordable housing. MAN 2: The current housing prices for many people are simply no longer an option. WOMAN (ON RADIO): The lack of affordable housing is the lynchpin of ongoing hardship. As house prices spiral out of control, are we seeing a generation of Kiwis being turned into renters for life? Has the dream of owning your own house become just that ` an impossible dream? www.able.co.nz Captions were made possible with funding from NZ On Air. Copyright Able 2016 WHIRRING When I think of a house, I think of the home where I grew up, in Arthur St, Oamaru. This was my mum and dad's first home. It's where they started a family ` our family. Back then, everybody believed if you worked hard, then you could afford to buy your own home. (KNOCKS) DOG BARKS Hey, Nigel. Hello. How's it going? Peter? Yeah. Welcome to your old home. Oh my God. Wow. The last time I was in this house, I was 7 years old. Growing up, everyone I knew owned their own home. I didn't know anyone who rented. Home ownership was like watching the 6 o'clock news; it was just something you did. Mum thinks they paid around $8000 when they bought this place back in the mid '60s. It would've taken them less than three years of Dad's full-time wage to pay that off, and that's categorised as 'affordable' by economists. But today, it takes nearly six years of household income to pay off the average house, and that is considered a disaster. NZ has some of the least affordable house prices in the world. REFLECTIVE PIANO MUSIC House prices, in real terms, have almost tripled over the last 50 years. What on earth has happened to make the cost of housing so high? REVERSING ALARM BEEPS The cost of materials; uh, the cost of labour, skilled tradesmen, has exploded since the 1960s and '70s. The cost of land is fundamental to it all, and that's rocketed. The costs are just creeping up and up and up all the time. Also pushing up house values is the fact that we're simply not building houses fast enough to match our record population growth. Does this mean we're at a stage where home ownership is out of reach? Should we be thinking about a lifetime of renting and what that would actually mean? WOMAN: What's that? GIRL: A car. Are these your friends at school, these pictures here? Linda and Sam, with their two young daughters, rent a house in east Auckland. Good colouring. This is excellent. Both work full-time ` Sam in construction management, and Linda runs a vet practice ` but they still can't afford to buy a house. The house prices are too expensive. It's just too hard to get in, too hard to save the deposit, and too hard to pay a mortgage. We'd say a third of our income, yeah, goes on rent. Yeah, yeah. By the time we've` we've bought groceries and paid our bills, there's not a lot left. So to` to be able to get that deposit, which needs to be quite a significant amount with the housing market, is just really hard. It's really hard seeing that money go out the bank every week and really not having an investment to show for it and not having that property that your kids are gonna inherit. It's sad to think that we might not have that security that I think, as a parent, you should be able to provide for your kids. That's` That's tough. Is shifting to a cheaper area an option? It's hard, because we've both got really good jobs, so I don't know that we'd get the same opportunities with our work that we currently have now. And` And I feel it's unfair to have to move out of your` what` what is home just to be able to get on to the housing market. That seems unfair. Linda and Sam have rented six houses over the last 12 or so years. What's the process like for renting? What do you have to go through? Is it easy? Is it difficult? It's madness. Yeah. It can be a scrum at a` at an open home. They now have open homes for rentals. You have to apply, uh, to view a property, and there` there could be 20 to 30 people in a line waiting to` to view the property. Sam and Linda really want to give their kids a stable upbringing and have managed to hold on to their current rental for the past three and a half years. We didn't necessarily choose to` to be in this particular house. It was what was available at the time. Do the kids have any concept of renting and that this isn't your house? The` The eldest one, who's` who's 5, she definitely knows that this isn't our house. Here's my school uniform, and I like writing and reading. She often makes a comment that if she's done something, are we gonna get kicked out, and that makes me a little bit upset that my anxiety passes on to` to her, and it's obviously comments that have been made in the house by us. And then Mum and Dad costed a lot of money on this because, um, it's from Disney On Ice, and my mum had to` Mum and Dad had to get a lot of money, and... Do you think that it's a right that we all have to own your own home if you live in NZ? I think that if you` if you work hard enough, it should be a right. Some boomers would say that you guys are just being too picky, you go out to restaurants all the time, too many lattes, not making enough sacrifices. What would you guys say to that? I'd` I` I don't think that's` that's right. No. Um, look, we` we live within our means, um, but we still have to enjoy our life. You know, I couldn't have imagined spending the last 10 years scrimping and saving, and every time you're getting ahead that the prices are going up. We were sort of resigned to the fact that it may not happen. Yeah. You know? Um, at the moment, it's not` not even a possibility. If a third of our income goes on our rent, that would be closer to... 60% of our income would be going to service a mortgage. And we couldn't... live comfortably. Mm. Um, you know, it's nice to treat the children to things and be able to do bits and pieces and live your life. You know? I think as a Kiwi, you're growing up in NZ, I think you're entitled to, you know, enjoy what we've got, rather than be stuck as a slave, just paying that mortgage off. We want to believe that we're an egalitarian society and if you work hard, you will be able to be successful, you can have what we all aspire to have ` a comfortable life, a place to call your own, and maybe an investment property. But the reality is I don't think that's possible any more. The outlook is pretty depressing for the vast majority of young people looking to get into their first home. Just 25 years ago, three-quarters of NZers lived in their own house. Now half the population in NZ's biggest city rent, and that number of renters is only going to increase. How did this happen? Is NZ's passion for investment properties part of the problem? NZ is facing a home ownership crisis. More than a third of people rent, and we're looking at a whole generation of people unable to afford their own home. We're consistently ranked near the top of the world's least affordable countries to purchase a house. NZ property prices relative to income are second worst in the world. That means that the average house price in NZ is equivalent to almost six years' worth of household income. Three years is considered affordable. Housing affordability is not just an Auckland problem. Wellington, Nelson, Hamilton, Christchurch and Tauranga are also categorised as severely unaffordable on a global scale. Predictably, though, Auckland is the worst. A young couple in Auckland earns about $80,000. The average house price in Auckland is $900,000. And it's rising so fast, your incomes just cannot keep pace to even get that deposit together, let alone to be able to pay for the mortgage payments that such an expensive house would require. Right now, a modest home would take about 50% of the couple's income. If house prices keep rising at the same rate as they are today, it'll be 100% of their income within the next 10 years. But just 25 years ago, NZ housing was classified as affordable. In 1995, I was a bit too late to the party. When we bought our house in Auckland, it cost us four times our annual income, which is categorised as seriously unaffordable. But for decades before that, houses were within reach of most of us; just three times the average annual household income, which is categorised as affordable. In the '90s, house prices started to climb and climb and climb. So what happened back then that caused the housing crisis we're now facing? Why did house prices start going up in the '90s? I think it was a fairly simple thing that demand outran supply. And the reason for that was we started, throughout the country, to look at trying to control the expansion of towns and cities. Even quite small cities were going through planning processes that were saying we should have quite firm boundaries and not let people build beyond them, building fences around cities. What was the thinking behind smaller cities? I think that was very much amongst the planners and the urban designers ` the feeling that they could cut down on petrol consumption and resource consumption by getting people out of cars, putting houses closer together, bringing them closer to the centre of the city and making them walk or bike or use public transport. That sounds like a good idea, though ` like compact cities, less sprawl, people living in one place, not as many cars. We don't need to be talking about sprawl. I think sprawl comes from bad planning, bad design, and there's plenty of bad planning and bad design when people try and control and contain their cities. I'd rather think about suburban communities, village communities, urban communities which have a sense of place and` and presence and a sense of belonging, where people can live and live out a good deal of their lives, where they can work, their kids can go to school. And we're heading right away from that at the moment. Surely someone should've said, 'This isn't working.' They did. In the 1990s, we prepared a report for the regional council that actually said, 'You will have congestion and high prices if you proceed down this path.' The politicians acknowledged that; central government unfortunately, uh, didn't. How on earth do we fix this? Like, is` is it too late? No, I don't think it's too late. I think it's getting harder by the year. We are creating significant social problems with the level of unaffordability we have now in housing, and those are extreme in lower income levels, but at higher income levels and with people who are skilled and then can move on, we risk losing our` our human resources. We risk the good people going because they can get work and buy a house elsewhere and have a settled family life. So if our planning has let us down, what's the real-world effect on housing affordability? Albany straddles the Northern Motorway, about 20km from the Auckland CBD. Real estate agent Sharee Adams is going to show me an apartment. So, Sharee, how much are you expecting to get for this place? So, something like this, you'd be looking at an early 400. And how big is it? Just under 50m2. LOCK RATTLES Welcome home. So, OK, it's not huge. (CHUCKLES) It's not huge. This'd be great for someone living on their own or a couple. Here you go. You've got a second bedroom, or you have this lovely open-plan living area. Plenty of storage. Nice big double wardrobe. But I'm thinking of the family home I grew up in. This is a third of the size. This would be about the same size as your average motel room, which people in the South Island will go, 'That's insane! Like, $400,000 for...' But actually, for Auckland, it's not insane, is it? It's not a bad option. It's central. You have to look at the positives. Check it out ` right over here is the park-and-ride. You've got some grass area; you don't have to maintain this grass. Pop down, have a picnic. And when this goes on the market, how long do you expect it will take to sell this? It's Auckland ` two, three weeks. This apartment costs 4.7 times the average annual household income, so it's categorised as seriously unaffordable on a global scale. What happens when you look at a three-bedroom family home? Sharee, this place has a CV of $650,000. What does that mean in terms of the price it will actually sell for? Well, I think these days you're looking at at least a couple of hundred above this rateable value. So $850,000 ` that's 10 times the average annual household income, which is ridiculous. So, are you looking for a house for yourself, or is this an investment place? Well, I buy investment property. Sharee actually sold me a property about 18 months ago, and it went up, you know, $10,000 per month for the last 18 months. That's fantastic for me. I'm not surprised to see a property investor here. On average, 40% of Auckland sales are to property investors, a lot of whom got their first house before the affordability crisis began. I have four daughters that are all, you know, in their twenties looking to get ahead on the property market. Do your daughters own their own homes? Not one of them own their own home. Are they on target to doing that, or do you think it'll be difficult for them to do that? Um,... they're not on target to do it, no. OMINOUS MUSIC For a couple wanting their first home, they'd need a combined income of over $160,000. The only property which seems affordable for first-home buyers in Auckland are for single people or couples. All the family homes are being snapped up by investors or people well up the property ladder. You know, we have tax policies in terms of incentives to buy houses. We didn't have a capital gains tax until very recently, and even then, it's a half-hearted measure. We don't have any protections against things like negative gearing, which makes investing in housing very attractive; the ability to borrow lots of money to buy a house for rental properties, but not for any other type of investment. So what is it that makes the property market so attractive for investors? Andrew Bruce has been investing in property since the late 1990s. The reason I invested in property is I like it` it's tangible; it's something I know is there; you can see it, you can touch it, you can go around; you've got more control over it. And also, you've got the utilisation of other people's money. You can borrow through the banks. It's given me exposure to a larger asset than I could otherwise have with` if I had a deposit of $30,000 or $40,000. If I went into some other markets, that's all I can really invest. But when I bought our first place, it was with a deposit of $30,000. You bought this place 20 years ago. Yep. I guess the obvious question would be why don't you just flick it off and make a fortune? Because basically, as soon as you end up selling, that's the end of any potential future gain that you can get out of it. Just because you haven't sold the property doesn't mean you can't utilise the capital gain in there or the equity that's been created. So that's really the key for us. Let's say you buy a property, let's say for argument's sake, $400,000. And let's say over a period of 10 years' time, that goes up to $800,000. All of a sudden, you've got $400,000 worth of equity. That $400,000, assuming your serviceability is OK, the bank will let you lend into some of that extra equity. And it is very much on a case by case basis with the banks. So once you have a house, it's easier to borrow more money to buy even more houses. The problem with a system where it makes perfect sense for people with houses to buy more houses is that it has the direct effect of making it harder for first-time buyers to get into their own home because they have to compete with all of those investors. What does it take nowadays for first home buyers to get into the market? In NZ, property investment is really attractive. There are tax benefits and no capital gains if you hold on to a house for two years. It's a simple decision for people with houses to buy even more houses, which makes it harder for first home buyers because they have to compete with all the investors. But the primary purpose of a home isn't to be an investment; it's a place for people to live. Sherilyn and Jonathan, against all odds, have managed to get on to the property ladder. It's quite a small house; everything's pretty original. Very small kitchen; very small dining room. We were looking for three bedrooms initially, and we stuck to that for quite a while. But then we realised two bedrooms was` it's what we could afford. Yeah, our expectations definitely changed. Yeah. The deposit was the main obstacle, and then, um, next was actually finding a place that we` we actually... Wanted to buy. ...wanted to buy and then that we could afford. You look at a lot of horrible houses, and the saddest thing about that is once you leave, you've realised you can't actually afford to buy that house. And you didn't want to live in it, it's horrible, but even if you wanted to, you couldn't. We were pretty set with our top number, because the bank would only lend us so much money. Like, 550 is absolute max. Jonathan is a paramedic, and Sherilyn runs a wedding event business from home. The couple need both incomes to pay the mortgage. Let's talk about the slightly depressing debt thing. Tell me what that's like. BOTH LAUGH I hate talkin' about money. Um, it's` it's a pretty big number. I think to put it into perspective, um, I'm the youngest of four and all of my siblings own houses. I'll have the biggest mortgage, yet I will actually have the least valuable house and I will have spent the most money. Sherilyn and Jonathan were lucky. They had help from their parents to raise the $83,000 deposit needed to purchase the house. But that's not an option for lots of people. Other friends have just decided they might just need to rent for the` the rest of their lives. The outlook is depressing, let's just say, (LAUGHS) at the moment. Has that become more accepted now, the idea of, kind of, renting for a lifetime, never being able to afford to own a house? Yeah, it's looking that way. Yeah. Why bother? Why bother saving for a house, you know? The more you save, the more expensive the houses become. Now that more people are forced into renting a home rather than owning a home, does our current system make it possible for those people to build a life, or do we literally treat tenants like second-class citizens? Economists Selena and Shamubeel Eaqub have written a book on the problems that face those that rent. They're also renting, but they've just started a family and are finding their needs are changing. Before, renting was a good option for us, because it was just us two. As your family's situation changes, your need for things like being involved in the community are really really important. One of the pressures in particular is not being settled in our` in our own home. So, for example, when Hayden goes to school, it's very important for us to be able to stay in the same place. (COOS) If you're renting, you can be kicked out very quickly; sometimes only 42 days. It's just not enough time to be able to change our situation, if that were to happen. How do we change that? We need to fix the lease terms. Right now, they're very short-term, usually around 11 months. And we need to fix the rules around being kicked out of rental properties. So right now, you can be kicked out after 90 days. But if your landlord wants to sell, for example, it's only 42 days, and that's just not enough time for a family to, um, get together and find another option. More options around being able to do things in your house to make it feel more like a home, like painting, changing the carpet. We're not suggesting that tenants can do everything, but if you have set rules around what you can do, then it would make it more like a home. Property investor and landlord Andrew Bruce would welcome the idea of long-term tenancy agreements. When I approach our tenants about, 'Do you want a fixed-term tenancy or do you want the` a more periodic tenancy?' which gives them more flexibility, inevitably, most people go for the flexibility of the shorter term tenancy. In saying that, it really is going to depend on a demographic. I rent to a lot of people in apartments, which will be quite a different demographic to, say, people that are looking at trying to get in school zones. If we look at families, then, so not that demographic of the kind of the younger, single people, wouldn't it be good if they could have a three-year tenancy or longer so that they could know that, 'We can live in this house as long as we're paying rent. 'We can stay here, raise our kids, be part of this community.' And you can negotiate that with your landlord. And if your landlord says no, you can start wondering, 'Well, why don't they want to give me that?' So where does the power lie ` with the landlords or the tenants? It would depend on who you're talking to. But one thing's for sure ` our protection of tenants falls far short of countries where renting is the norm. In Germany, where more than half the population rent, rental periods are indefinite, and the longer you live in a place, the longer the notice to evict becomes. Rent increases are restricted by law. Should NZ tenants be given more rights? The politicians, the political forces are very much representing the landed gentry, people who are already benefiting. And Generation Rent, millennials, the guys who are really going to be affected by unaffordable housing are the ones that are disengaged and resigned. Fast forward 20, 30 years, the majority of the population are going to be Generation Rent. The majority of the population are going to be millennials, and the political balance will shift at some point in time. If we don't solve it now, there's going to be generational warfare ` boomers against Generation Rent and millennials. How do we avoid that future generational warfare? I think it's very easy. We start making the solutions now, and the starting point is around fixing rules for renting. And then we start to put in all the other policies in place that will help us in terms of fixing the fundamentals, in terms of fixing taxes, fixing the banking regulation, fixing the local government rules that are making it too difficult and too expensive to supply land. So what can we do right now for those who have to rent and are stuck in substandard houses? Ah, just a wee bit up. And to the right a little bit. Perfect! Oh, beauty, guys! Mmm. Maybe a touch left and down a bit. REFLECTIVE PIANO MUSIC NZ's housing issues aren't just limited to the cities. Around the country, people are looking for their own solutions. In the Far North, Rueben Taipari is trying to solve the problem of building both healthy and affordable houses for the local community. That house that we just passed is so cold. They don't even light fires or have heaters in that house, cos it's just a waste of time having heating. It just goes straight out through the holes in the walls. Rueben's taking me to meet a family who, incredibly, have lived in a converted cowshed for the past 30 years. Over that time, they've not only brought up their own children, but also extended family and a whole host of foster kids. What's the largest number of people that you've had living here. (LAUGHS) Ohh! (LAUGHS) CHUCKLES: Probably about 20. Rueben has big plans to build the family a more suitable home. These are the plans for the whare. It's, uh, 9m wide; 26m long. It's like quarter the length of a football field. But we need it for all the mokopuna we have. (CHUCKLES) Rueben isn't just building a typical whare for the family. This is a whare uku, a house made with clay. I just thought we've gotta use what we've got in order to create our own solutions. The beauty of the construction method is that with good supervision, people could help to build their own homes, which sounds great. But what about the quality of a home that's essentially made from rammed earth? My children, my wife, my` my parents will live in these homes, so I'm not about to go out and build something that's inferior. The house is constructed by mixing dirt, sand and flax, and the fantastic thing is that it's all free from their own land. Clay itself is a great material. It doesn't corrode. It's really good on coastal areas, where I live. These houses are like a living building ` breathability, the thermal mass properties. My children are the... We don't get sick in these houses. How expensive are these houses to build? This house here, uh, cost 150,000. You built all of this, the road in, the house, the waste treatment system, the solar panels so you've got no power bills, for $150,000? Yeah, and I think I can do better. I think I can get it down to $100,000. This is a great idea for this community, but what about the rest of us? We can't all build rammed earth houses. But can the same kind of smart thinking and good design be applied in our cities? For decades now, NZers have been migrating to the main centres, because that's where the work is, so we end up battling each other for our own quarter-acre paradise. In Auckland, the land value normally makes up 60% of a property's total worth. And on top of that expensive land, we plonk a big expensive house. In 1974, the average house was just over 100m2. But today, the average new house is twice as big, even though the family size is getting smaller. Building costs money, but middle class taste costs even more money, and you've got people aspiring to all sorts of things there. We want bigger, flasher, nicer. Yeah. More spacious, en suite-y. Yeah. Yeah. It's a bit like weddings, I think. Um, you often see people, um, having a really expensive wedding because that's what they think they should do, that's what the in-laws want, that's what they see in the magazines. And it's similar in building as well. We need to stop thinking bigger. NZ already has the third largest homes in the OECD behind the United States and Canada. Property developer Mark Todd believes we should think smarter instead. The problem is not that we're not building enough houses. In fact, if we double our existing housing supply ` I think they're building around 8000 houses in Auckland at the moment ` if we double that to 16,000, they wouldn't sell. And you know why? Because the average house price delivered in Auckland for a new house is above the median house price. The issue with our housing supply is not the numbers; it's the type of housing that's being supplied. We're building either expensive infill townhouses or expensive three-, four- and five-bedroom townhouses in green field locations. Either way, we're getting expensive housing. They're expensive. They're not what we need, but that's the only economically viable opportunity available in the suburban development scene. You're economically precluded from providing small one-, two- and three-bedroom units. Mark wants to see more of this ` three-level developments. Unlike apartments, it doesn't have underground car parks, which is a big cost driver. The stairs are externally ventilated; there's no reason to have a sprinkler system in this building; there's no lift in this building. It's cheap because the financing costs are low. It only takes five and a half months to build this building, as opposed to a year and a half to two years for a large-scale apartment block. A lot of people will make small sacrifices for a radically different price point. When this block was finished, the average price was $520,000. So alternately, you could've had three million-dollar townhouses there. And so I've got new housing supply here at well below the median house price, which is how you make significant change. I think this is a great solution, beautifully designed inner-city apartments that make the most of the land available. They're perfect for professionals and the middle class, but for the low-income families, a place like this is out of reach. They're often only able to rent, and that's taking up more and more of their wages. Not only have we got this issue of a few increasingly owning more and more of the houses. We're also starting to see this separation, this ghetto-isation of the poor and the vulnerable, and it's almost a physical pushing out and a separation and segregation to the least desirable parts. Those people who are in state housing and community housing, they're there for very complex reasons. It's not just poverty; it's poverty and a whole range of other issues. And these are the most vulnerable people in our society. We should be doing everything we can do to help them. But there are people out there trying to fix the problem with some radical solutions. With house prices rocketing upwards with no sign of slowing down, it means more NZers are forced to stay in rented properties. And a big question is ` are these rented houses healthy to live in? What is the rental stock like in NZ? What we see towards the lower income end of the scale is that a large amount of the homes are in a shocking condition. I mean, how many houses are we talking about? Oh, we would say the` the problem is massive. NZ housing has always been terrible. Three quarters of rental properties have mould, and a third are damp. And around half of under-5s live in rental homes. Our most vulnerable are suffering from asthma and getting sick because of houses that don't meet the World Health Organisation's recommendations for healthy conditions. We're still living in tents, basically ` tin tents. There are some rubbish rentals that I've seen around the country. Our houses have got no heating. We've got minimal insulation. There's thousands and thousands of people across this country who are not living in decent shelter that goes way beyond what we would consider habitable. You've got people living in garages; you've got people living in mouldy, damp, sunless conditions. Really terrible, and that gives renting a bad name. So we need a warrant of fitness around rental houses to raise that quality. The building warrant of fitness is a set of standards that would arguably make a house habitable ` the safety of a house; the warmth of the home; the amenities that are available. The government was looking at a warrant of fitness for rental houses, but instead we got a watered-down version with just two rules. Smoke alarms are now compulsory, and rental houses have to be insulated by 2019. The warrant of fitness was seen as too expensive, a price some think landlords would pass on to tenants. But maybe it shouldn't be about cost. Maybe it should be about liveable houses. David and Lucia came from Rarotonga three years ago. They have two children and live in a tiny second-storey apartment in South Auckland. How hard was it to find somewhere to rent? It was really hard. Because we were new and we didn't have a credit history, it was hard for landlords to give us a place to stay. So was it that you like this place, or you just thought, 'It's a place, we're gonna take it'? It's a place, we're gonna take it. We're just` Yeah. We tried Housing NZ, but that was on a waiting list. We didn't wanna wait. How much rent do you pay for this place? About 75% of how much we make a week. So we're` we're kinda left with... a little bit to spend on ourselves. (CHUCKLES) Mm. It's very hard. What are the things about this place that you don't like? It's very damp. Sometimes it's warm, but when it comes to winter, it's really cold. Yeah, it's cold. Cos you still can feel breeze coming down through the doors. And so, you've an pretty active little guy. Yes. He's 3, but there's nowhere for him to run around. To run around, yes. Mm. Yeah. Climb over the couches, alongside the wall. Yeah. That's his little playground. And the problems don't end there. There's a lot of cockroaches. (CHUCKLES) When you turn off the lights, in the middle of the night, you wanna come back, you wanna go to the bathroom, and you turn` turn that on and all the cockroaches are all over the place. Yeah, it's really unhealthy for baby. I had to take him to the doctor's, like, twice a month, cos he's always getting sick. Getting to winter. It's just flu, eczema, sometimes, maybe because it's damp. What are the impacts on families of living in poor-quality housing? We feel that the impacts are` are pretty profound. The links between poor-quality housing and health is` is well established. The issues with unaffordability put people into a position where they feel they can't get out of. So when you have people going through that week-to-week cycle of just being able to afford the rent and the basic food, it doesn't get them thinking about the future and where they can be. I think for any human being, that whole idea that you can move forward in your life or you can create a better future, particularly for your children, is something that keeps us going. But if you're in that cycle with no feeling of actually getting out of it, then I` I feel there's` there's more psychological issues there that an awful lot of the time are not actually addressed or spoken about. How do we get healthy homes for those on low incomes? Architect Dave Strachan brings high-quality design to low-cost community housing. There's no reason we have to strip design out of, uh, a building that's got cheaper materials, is smaller, only got one bathroom or whatever. No reason why it couldn't be a` a nice building. And Dave has achieved something that many said couldn't be done. We've just opened up a 10-unit development, and everyone's raving about those houses. They're built to the same budget that all of the social housing has to be built to, so we can do it. High-quality social housing, the kind people actually want to live in, doesn't have to be unhealthy, ugly or expensive. Dave, these are the houses. They look great. I mean, that's` How much did this cost to build? They're pretty modest budgets. I think one` one was about 100K and the other was 200K. (LAUGHS) So in terms of the scale of them, a four-bedroom house for a couple of hundred thousand is quite a good build cost. When you think about low-income social housing, really, you think boring little boxes and slightly depressing. But this is like a landscaped, nice little community, and it's not expensive. It's affordable, and it's` it's a liveable building. One of the things is to try and create a community. So as you wind your way down the street here, you've got a series of buildings so people can look out for each other. If some car that no one recognises comes down the road, people can see what's going on. Often when you're talking about social housing, people think about damp houses and unhealthy houses. What is in the design of the building to make it a healthy home to live in? Super high insulation; face the windows the right way; sun shading where you want it; thermal mass and natural ventilation. We have louvres above the doors so you can get cross-flow of air in bedrooms. So all of those things, you just tick the boxes of what's a healthy house. I mean, I look at that house, and that just utterly reinforces to me that good design doesn't have to be expensive and cheap houses don't have to be crap, cos that's a lovely house. Yeah, well, certainly the tenants tell us that, and` and so, yeah, I` I agree totally. Unfortunately, only seven rental homes have been built from his design so far. Habitat For Humanity are approaching from a different angle. They're trying to move low-income working families from renting into their own healthy homes. David and Lucia are about to move into the 100th home that Habitat For Humanity have built in NZ. We're creating long-term security for their future, a place that they can really call home and be proud of, and ultimately, you know, a healthy place to live. Their new house is also in South Auckland, but the living conditions couldn't be more different from their rental house. So, this is the first time you guys have been back to the house since it was basically just framework? BOTH: Yes. So, quite exciting to see it now a week away from being finished? It is, yes. Yeah, it is. What are the things that you're looking forward to about moving in here? Warm house, more space, get a backyard and no cockroaches. (LAUGHS) There'll be no cockroaches, yeah. All those nice things. Yeah, all those nice things. BOTH: Wow. New kitchen, new oven. Awesome. I like the bench. David and Lucia will pay the rent on this place to Habitat For Humanity, who will cover the rates and insurance from this. And after 10 years, the rest of that rent money will be given back to them to use as a deposit for a mortgage on this house. Oh, look! We've got a heater! We don't really charge an interest rate. And as far as their repayments, we try and keep it to a maximum of 30% of their household income, or 75% of median rent. Oh wow. It's beautiful. That allows them over the years to pay off as much as possible of the value of the home. All the equity is with the family, and then at that point, they can purchase the home from us, and then that money just goes round and round. We use that then to purchase another piece of land, and the process happens again. Yeah, can put a chair there. The house has double glazing, insulation and smoke alarms. It's going to make a great family home. You talk to David and Lucia and you look at their little boy, you think, 'Man, this isn't just some theoretical thing. This is real people.' The government and many people look at this as a social issue, where actually we should be looking at housing as a human right. You're kidding. Beautiful. Look, we get our own closet. The fundamentals of what individuals need to live is food, air, water and shelter. It's one of these basic building blocks of actually living and then being able to move forward, uh, in your life. Whose responsibility is it to provide housing? For Habitat, we would argue that it's everybody's responsibility. We need more radical solutions to this problem. After the second World War, the government started building a huge amount of housing, cos there was a great need for it. You know, there was a huge amount of money spent on it. This is where we are now. We're at a housing crisis, and we need to make the decisions. Well, how far are we gonna go on this? What can we do as individuals to really make change? Looking at the way things are going, think about your family and what they're going to do in the future, if they want to still live in the city or in a decent place in this country. These solutions are all going to be long-term, and they need to start at some point. You know, they're going to take decades to get this right. The dream of owning your own home is fast becoming impossible for many NZers. So can we create a new model where you may pay rent all your life, but you and your family also get to build a life in a healthy home? When I was growing up, family life felt stable. Home was home. 40 years on, the current owners of my childhood home wanted to show me something. Have a look down there. It says 'Nigel Latta, '70.' (LAUGHS) Oh my God! Everyone should have the chance to create permanent memories like I did. The housing affordability crisis began more than 25 years ago, and it could take another 25 years to sort it out. But we've got to look at the problem sitting in front of us right now. More and more people are being forced to rent. We have a duty to provide healthy homes for those who may never get a chance to climb the property ladder. Owning a home may be out of the reach of more and more NZers, but having a home shouldn't be. REFLECTIVE MUSIC