Wednesday, October 12, 2022

The unprecedented rush to emergency housing

 The following graph shows the number of MSD clients living in emergency housing up to 2021:

Typically, around 92 percent of clients are housed in hotels/motels with the remainder in hostels/holiday parks.

Then next chart shows a breakdown by area:

I am not convinced that the demand grew solely from "a shortage of affordable housing" - the reason provided by MSD. Neither is population growth a convincing reason with 2016 providing a mid-point - not a beginning.

I think demand was driven largely by expectation.

When people begin to hear about others in their circles being provided with motel accommodation for free they will start to respond. When people see modern state housing being built with attractive income-related rents they will want to get into one even if that means waiting in emergency housing for free for a period.

Belatedly, in October 2021, MSD started to charge emergency housing clients 25% of their income (in line with the income-related rent subsidy) because apparently, "Anecdotal evidence from our front-line staff suggests there may be small numbers of clients in [emergency housing] that are incentivised to access and remain in [emergency housing] when they have an alternative housing option because they face no accommodation costs."

There is some reduction in that year's numbers. But 2022 is shaping up to look more like 2020 based on stats to July 31 (12,465 clients).

No doubt there are rental accommodation shortages (driven by Labour's hostile policies towards landlords) but behavioural economics probably explains a good part of this unprecedented rush to emergency providers.

Purely my opinion of course.

(BTW Rotorua has established a database of accommodation providers classified by whether they provide emergency housing or not. Many do not. I link to it in the interests of helping Rotorua restore its tourism industry. I have many fond family memories of happy holidays spent there.)

1 comment:

Mark Hubbard said...

An accurate comment on what is going on here I think, Lindsay.

It's the same welfare creep - psychology - that is ruining New Zealand. I can't see Luxon fixing any of this, he doesn't have the steel needed to stop this constant free-lunch mentality fostered by central government, so our best hope is ACT in with many more MPs and real bargaining power.

And better stick a lot more money into police.