Thursday, July 5, 2012

The private sector solution

In the course of recent discussions with the Auckland Council, the question arose as to what the 'private sector solution' to Auckland's housing crisis might be. (If you're Gerry Brownlee you're probably saying "what crisis?")
The question is a good one: the Council is not engaged in the provision of social housing, the government has stopped building houses except inasmuch as they can be financed by moving people from gentrifying suburbs to far less desirable ones; and the money allocated to third sector housing in the budget,  while welcome, will only build a very small proportion of the housing required.This leaves the private sector to fill a very large gap. So the question of what the private sector will do to fill that gap is highly relevant, especially given the cheerful orange blobs called 'housing' that have been drawn onto a map of South Auckland and are currently part of the Auckland Plan.
Those who have read Mike Davis' Planet of Slums, the work of Davis' intellectual forebear Frederick Engels, The Housing Problem, and some smaller, less glorious pieces of research by the Salvation Army and Child Poverty Action Group will be aware that the private sector does not provide housing solutions to the poor as the middle class might understand them. If it did, there would be no market failure, and no need for social housing. This is not to say the private sector doesn't provide, just that the solution might not be optimal for human health and wellbeing. In general what happens is that low-income people are marginalised into certain geographical areas and as intensification occurs, the available space is divided up into smaller and smaller bits, which is good news for landlords because the return per square foot increases. For people with low incomes, the absolute price of that 9sq metre room might be cheap, but the return per square metre for landlords is far above that of renting out a whole house.
In South Auckland that slicing and dicing of space takes several main forms. First, there's the caravans, then the use of lean-tos, sleepouts and sheds for accommodation (and we wonder why our kids have such high rates of respiratory disease), and the old favourite, intensification through overcrowding. For example, CPAG researchers are aware of three bedroom houses in South Auckland with one family per room, a strategy which minimises the amount of rent paid by each family.
My response to the private-sector-solution question was that given the lack of real investment in housing the result would be more caravans on more front yards. In retrospect, it is highly probable that I should have said something like "the Council will need to work with a range of stakeholders to achieve an optimum outcome that aligns with the aspirations set out in the Auckland Plan." But real people don't talk like that, plus it's meaningless (although the use of the verb 'work'  suggests something concrete will be achieved).
Anyway, this question has been bothering Spider and me. Is our private sector solution actually happening or just anecdote? So over the weekend, we packed up a pooh bag and dog bikkies and went for a walk.
This place is just up the road. What is shown is one caravan in a back yard less than two metres away from the adjacent caravan (the white blob on the left). Look at the top of the photo and there's the glimpse of a sleepout. There is another sleepout and another caravan squashed into this back yard. It's all hidden from view of the street by a 6' fence (the photo was taken through a gap in the fence). This set-up undoubtedly violates any number of council land-use by-laws but who's going to complain? The people who at least have some shelter from the rain, or the neighbours who know that if they ring the council they get ignored? No-one will complain, that's who. The rumour is those caravans get $150 per week.

Here's another caravan hidden in a back yard. A lot of what we might euphamistically describe as informal housing is hidden from public view. This is not surprising: not even the poor want to be seen as being that poor by their fellow citizens.

 Here's a splendid example of a conservatory converted to a bedroom.

While the Council planners are busily drawing coloured blobs to indicate where they hope intensification will occur, this is largely as directed and formal as it gets. It's another example of the divide and make more money rule. Because so much of this subdivision is unplanned and unregulated, much of it ends up being a complete dog's breakfast. 
A special mention must go to South Auckland's boarding houses - 'flea-pits' according to a hand-scribbled note that appeared one day at the Otahuhu transport centre. Reflecting the shortage of accommodation, now matter how grotty, rooms in this boarding house were $100 per week in late 2011. That's a 20% rent increase in 6-7 months. Not bad.

All this is in the space of a short walk in a relatively nice part of South Auckland. There's dozens of others to be seen without having to leave the comfort of your car.
This is in Clover Park...

...and this, complete with outdoor furniture, sits behind a block of cinderblock flats in Otara.

There's a crisis, alright. The question is what the public sector is going to do about it?