Tom and Dorothy Innes moved into the off-grid cabin they’ve always dreamed of in Springfield, Canterbury, in 2018. It’s an open-plan, 44-square-metre timber home and a veranda on a quarter acre, which Tom designed. They also built it themselves under an obscure owner-builder exemption included in changes to the Building Amendment Act 2012. Tom says the exemption was intended to keep the Kiwi build-your-own-home tradition alive despite tighter regulations.
The exemption means there is no requirement to hire a licensed building practitioner (LBP) to work on your own home, provided you follow the standard process for building consent.
“People don’t know about it,” Tom says. “Even many in the building industry are unaware of the owner-builder exemption.”
Tom and Dorothy had built their old family home in Timaru in the 1980s when their children were young, and a cottage in Springfield before building regulations became stricter. Then eight years ago, the section next door to the cottage came up for sale. It looked like just the spot they needed for their off-grid dream, so they bought it for $52,000.
“There’s a whole lot of mythology around what you can and can’t do with building,” Tom says. Early on, he thought their plans to go full DIY, from design to final additions, were doomed. However, a knowledgeable acquaintance tracked down the provision for owners to do restricted building work, including design and all work related to being structurally sound and weathertight.
It became their part-time project. In the first year, Tom drew plans on paper with a pencil and ruler and gained building consent. He already had a fair idea of what could and couldn’t be done and said they didn’t face any significant hurdles with the council. It took another year of physical work before the couple could move in. The following year, they finished little jobs needed for compliance.
At the time, Tom says that new two-bedroom homes were selling for more than $500,000 in a neighbouring subdivision. They spent just under $100,000 on the build, bringing their total cost for a liveable quarter acre to $152,000.
The rest of the section is primarily permaculture gardens, which are Dorothy’s domain. They also have a shed, in which they built a tiny mobile house for their daughter and a sleepout one of their sons built.
“It’s an amazing solution for people who are that way inclined and want to do that themselves rather than be the victims of an overpriced, over-regulated industry,” Tom says.
It’s the comfortable, sustainable haven they imagined, and his only complaint is that the wood burner puts out so much heat that they often need to open a window. They’ve had two of their adult children living on the property for some time, and he says that four adults using the living areas and bathroom didn’t make it feel too small. Tom designed it so the house could be expanded easily, but they don’t intend to do that.
He is currently the Priest in Charge of the Anglican parish in Malvern, but his experience includes an agriculture degree, doing property valuation, and working for a builder. Those who have less expertise or time up their sleeve can still use the exemption for as little or as much restricted work as suits.
“If people can get into even a small home that’s warm and comfortable and well built, with zero or low debt, life is so different,” he says.
A straightforward four-page declaration for MBIE, online here, asks which restricted building work is being carried out by the owner: https://www.building.govt.nz/assets/Uploads/projects-and-consents/restricted-building-work/statutory-declaration-owner-builder-status-form-2b.pdf
HOUSING ASSISTANCE AND OTHER ALTERNATIVES
Community housing organisations are usually not-for-profits that have been registered to provide alternatives to Kāinga Ora and local authority housing. The Community Housing Association, which represents these groups, estimates that they provide 18,520 homes across the country. Many also offer wrap-around support.
Individuals and families apply through Work and Income New Zealand, but each organisation has its own eligibility criteria. Referrals reach them through the Ministry of Social Development’s Social Housing Register.
Those who live in community housing are eligible for the Income Related Rent subsidy, which ensures that their rent won’t exceed 25% of their income.
Visionwest is an established community housing provider that grew out of Glen Eden Baptist Church’s desire to serve people in west Auckland. It has been operating in that space for 18 years.
“We could see so many people who were coming to our food bank, our budgeting services, and they just couldn’t get into affordable housing,” says CEO Lisa Wooley. “So we just started that journey.”
The people who they help have either been homeless or are unable to get into a rental they can afford. Over the years Visionwest has built many of the houses its clients live in, and currently owns nearly 100 that people can access through income-related rents.
“That’s breaking that poverty piece as well, so they’ve got more of their income available for other areas,” Lisa says.
Visionwest also leases homes from the private market and guarantees that the landlord will receive full time rental income and that the home’s condition will be maintained. The government subsidises the rent payments, and Visionwest provides support to help tenants in other areas of their lives.
“For families that have not had permanent housing, they are able to live in one community, and their children go to one school, and they are able to start to think about what their future looks like,” Lisa says. “[They can] start looking at training opportunities, employment opportunities, with support around them.”
She says that the main challenge Visionwest currently faces is getting a funding pipeline for new home builds. They have financing from private organisations such as Christian Savings, but they’re always on the lookout for new partnerships and keen for the government to make the development of affordable housing more attractive.
“There is no one silver bullet,” Lisa says. “You have to have people working at different parts of the whole system.”
MORE INFORMATION ON COMMUNITY HOUSING:
Visionwest is part of Housing First, a collective of NGOs that includes Auckland City Mission, Lifewise and LinkPeople.
The Ministry of Social Development provides a weekly payment towards housing for those who aren’t renting social housing but meet certain asset and income requirements. Those who are struggling to afford rent may discover that they are actually eligible: “Sometimes, working people don’t understand it’s available for them,” Lisa says.
HomeSaver & Shared Ownership Programmes
The Housing Foundation builds homes and offers a rent-to-own option for first home buyers who meet certain criteria. After renting for 5 years and providing a low deposit, they can qualify for a mortgage to buy a minimum of 60% of the purchase price. Eligibility includes manageable debt that can be paid off within 5 years and a household income between $65,000 and $95,000 per year—depending on the location of the development being applied for.
The Shared Ownership Programme has similar criteria, and allows the purchase of a home where the Housing Foundation retains a minority share of ownership in a property until the client is able to buy them out.
Information about other types of assistance are available from The Housing Foundation: www.nzhf.org
HABITAT FOR HUMANITY
Habitat for Humanity has been working in New Zealand’s community housing space for nearly 30 years. Over that time, says Communications Manager Val Hayes, they’ve helped more than 540 whanau into home ownership. It’s only a fraction of those who could benefit from rent-to-buy arrangements, however organisations that work in this space have all the usual constraints of financing and building supply along with the need to fund staff to support clients.
Habitat for Humanity’s capacity has increased over the past two years with a government partnership that is, essentially, an interest-free loan of $22 million from the Ministry of Housing and Urban Development. Currently they have a pipeline of 73 homes.
“We need partnerships,” Val says. “No one entity can solve the housing crisis.”
Habitat for Humanity not only funds new builds, they support the families themselves through a programme that can take more than 10 years, equipping them to be home owners.
“The cohort that we work with, they don’t even dream of owning a home,” Val says. “So our programme effectively gets them mortgage-ready. When they start, they certainly don’t have a deposit for a house. And by the time they graduate from the programme they’re able to take out that mortgage with a bank.
“That can take 10 to 15 years.”
When their clients move in to their new homes, they are tenants. However their rent begins building towards a deposit, and they need to stick with the programme until they’re eligible to buy. When they have a deposit and secure a mortgage, they officially purchase the home from Habitat.
“There are life’s ups and downs—we work with the families,” Val says. Their support ranges from financial education to the practicalities of home maintenance. And for families who do secure their own home, the rewards are more than financial.
“Providing all goes well, they know they’re in the home they’ll one day own,” Val says. “And they know where their children are going to go to school. And they know that it’s safe and it’s healthy for them. It’s not a mass product, but it’s addressing a need.”
FIRST HOME GRANT
People who have been contributing to KiwiSaver or equivalent for at least 3 years and don’t currently own land could be eligible for a first home grant. Income must be less than a certain cap and, as with the option to withdraw KiwiSaver funds, the property’s price must be under the regional limit.
First Home Loan is a government scheme for first home buyers with a deposit of at least 5%. Kāinga Ora acts as a guarantor, which limits buyers to select lenders and also necessitates Lenders’ Mortgage Insurance.
First Home Partner allows people to buy a new or off-the-plan home with Kāinga Ora as partial owner. Buyers are required to have a deposit of at least 5% and total household income before tax must be no more than $130,000. Kāinga Ora funds up to 25% of the cost or $200,000, and gives buyers 25 years to purchase its share—at market value. After the first 15 years, administration fees also kick in.
Community Finance partners with community housing providers. It was established with capital from five key stakeholders—The Lindsay Foundation, The Tindall Foundation, The Matua Foundation, Christian Savings and the Wilberforce Foundation. It allows local investors to support local housing, and currently supports 90 local organisations around the country.
New Zealand Home Loans specialises in finding a better structure for loans and providing clients with ongoing coaching to reduce repayment time and interest. It’s a government-owned subsidiary of Kiwi Group Holdings.
KiwiBank’s Co-own mortgages are designed to meet the reality that many people need the assistance of friends or family to purchase a home.
ADDITIONAL COHOUSING COMMUNITIES
Toiora High Street Cohousing, Dunedin
Earthsong Eco-Neighbourhood, west Auckland
Peterborough Housing Collective, Christchurch
26 Aroha, central Auckland