Horowhenua ‘severely unaffordable’

Horowhenua has the highest percentage of income being spent on rent in the country, with some spending half their earnings putting a roof over their head.

Dot Loves Data spokesman Justin Lester said Horowhenua had an average rate of 40 per cent of a income spent on rent, as of July.

Lester said both lower incomes in the region and increasing rent prices were attributing factors. ‘‘Low median household income, and its proximity to Wellington means rental prices are increasing as well.’’

Nearby areas Kāpiti and Palmerston North were at 34 per cent and 30 per cent, respectively.

Lester said about 30 per cent was normal, but ideally no more than 25 per cent of household income should be spent on rent.

He said Wellington had a huge effect on Horowhenua, with people from the capital able to buy property due to having higher incomes.

This pushed prices up for residents, and it was only going to increase when Transmission Gully opened.

Housing Minister Megan Woods said the Government was aware of the impact Wellington was having on areas such as Horowhenua. ‘‘We know Wellington’s growth has a knock-on effect for housing, transport and economic development in the Wairarapa and Horowhenua regions.

‘‘In response to this The Wellington Regional Growth Framework, a joint spatial plan for Wellington-WairarapaHorowhenua, has agreed to some growth areas.

‘‘The plan anticipates accommodating 200,000 extra people in the region in the next 30 years.’’

Nationally, rental costs had increased by 17 per cent over the past three years, and higher rental prices weren’t good news for those trying to get into home ownership.

Based on average rental prices and household incomes in Horowhenua, it would take people an average of 19 years to save up for a 20 per cent home deposit.

Lester said supply was everything, and if there were more people seeking to rent than houses available to rent, prices would continue to be pushed up.

The percentage of income going on rent was even higher in two parts of Horowhenua, in Foxton it was 45 per cent and in Shannon it was 51 per cent.

In June, Hāpai Te Hapori community innovation navigator Sharon Williams told Stuff Shannon’s issues with housing stemmed from affordability and accessibility.

The Horowhenua District Council’s 2019 Housing Action Plan acknowledged the supply of housing in the region was not keeping pace with demand.

The plan used median multiple, the ratio of the median house price by the median gross annual household income, to get an indication of housing affordability.

Severely unaffordable was 5.1 and over, seriously unaffordable 4.1 to 5.0, moderately unaffordable 3.1 to 4.0, and affordable 3.0 and under.

Based on the median household price of $324,000 and a median household income of about $43,600, the median multiple for Horowhenua was 7.4.

‘‘This indicates housing to be severely unaffordable in Horowhenua based on median household income and median house price,’’ the plan said.

As part of the plan, a target of housing in Horowhenua having a median multiple measure of 3.0-4.0 by 2030 was proposed.

For those on low incomes who may need public housing, household spending should be no more than 25 per cent of household income, it stated.

There were 209 applicants on the social housing register in Horowhenua as of June, according to a public housing report by the Ministry of Social Development.

Councillors will consider a streamlined housing process, which would be trialled next year, at a council meeting today. It is designed to encourage more intensive housing developments than what is currently being delivered by the market.