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Alan Button’s Ōtautahi Housing Trust unit has a living area, bedroom, kitchen and bathroom. (Photo: Alden Williams/Stuff)
Alan Button’s Ōtautahi Housing Trust unit has a living area, bedroom, kitchen and bathroom. (Photo: Alden Williams/Stuff)

SocietyMarch 25, 2023

Renting over 65: The uncertain future facing more and more New Zealanders

Alan Button’s Ōtautahi Housing Trust unit has a living area, bedroom, kitchen and bathroom. (Photo: Alden Williams/Stuff)
Alan Button’s Ōtautahi Housing Trust unit has a living area, bedroom, kitchen and bathroom. (Photo: Alden Williams/Stuff)

If current trends continue, by 2053 half of retirement-age New Zealanders will be renters. Right now, options for over-65s who don’t own their own home are limited.

This story was first published on Stuff.

What’s life like when you reach retirement age, but don’t own a home of your own? Most likely you are worried about how you will continue to pay market rent when your only income is New Zealand Superannuation.

Or you may have already secured a place in social housing, like Alan Button, who has never owned a house and can’t imagine he ever will. Sickness forced the former commercial driver to retire five years early on a benefit.

He now receives the NZ Superannuation payment for a single person ($925.88 net a fortnight), plus an additional $30 accommodation supplement each payday. He pays $167 a week to live in a small, but tidy Ōtautahi Housing Trust unit in a block of 12 in Christchurch.

Alan Button has been in this Otautahi Housing Trust unit in Christchurch for 17 years. He manages on the New Zealand Super paying $167 a week in rent, and getting a $30 accommodation supplement each fortnight. (Photo: Alden Williams/Stuff)

Button’s future is secure, unlike Mary of Wellington (who requested anonymity). Mary, 66, works part-time and managed to secure a comparatively low rent for the city of $438 a week for a unit she lives in by herself: “I’ve become used to living on my own,” she says, putting failed relationships and the loss of partners behind her. “You can’t go flatting when you’re 65-plus. You’re too old.”

Mary has no idea what she will do once she retires – she won’t be able to continue paying her current rent. She has been investigating options and not finding solutions. “Retirement villages don’t offer rentals, and market rentals have gone up such a lot, the pension won’t cover it.”

Mary is not alone: “I have 10 single female friends who are over 65, and eight of them are renting, and one-bedroom flats in Wellington are typically $500-$600 a week. One of the other two friends still has a mortgage.”

Not that having a mortgage is an advantage when you reach retirement. In his social housing unit, Button says he is in a better position than his neighbour around the corner paying off a mortgage and trying to survive on NZ Super.

Button has space out the back for a vegetable garden. He also owns a 2013 Toyota Yaris, but says it has only done 21,000km, because ‘I can walk to The Warehouse and Countdown’. (Photo: Alden Williams/Stuff)

“If I had my life again, I would have focussed more on getting my own place,” he says. “But when I was younger I was very happy to be renting, and that just continued. I have been here 17 years and I imagine I will be here till I am no longer able to look after myself, or I pop my clogs.”

Button’s power bills are a meagre $70 to $80 a month in winter, because two years ago, all the units in the block were refurbished with double glazing, new insulation, and heat pumps to meet new government requirements for rental properties. At the same time, they were repainted and recarpeted. And it didn’t cost him a cent. The neighbour in the house around the corner pays around $270 a month for power.

‘We applied for a loan and were laughed out of the bank’

Joan and her partner, who also requested anonymity, live in a $450 rental in Nelson. The couple are both in their 70s, and Joan’s partner works 30 hours a week.

“We have both owned houses before, but for a variety of reasons, neither of us came out with very much money. We don’t have enough for a deposit on a house, and can’t get a mortgage anyway. We did apply for a loan and literally got laughed out of the bank.

“The bulk of our pension every fortnight goes on rent, and my partner’s wages are what keeps us going. We are doing OK at present, but he can’t keep working forever. It will be impossible to manage when he retires.

“We have applied for council housing, but we’ll probably be dead by the time we get one. And there are a lot of people worse off than us – people with children with nowhere to live.”

Joan says she doesn’t tell people they are renting, because she feels it carries a stigma. “People assume we own our home. They do look down on you – they see you as a ‘renter’.”

She also says when they last looked for a rental they noticed a jump in negativity, despite their good references. “It can be quite subtle, although some people were awful. One landlord asked very personal questions that were irrelevant to us living there. People looked down on us as though we were lowlifes.”

Joan says she doesn’t think they can go through this process again. “It’s just too hard when you are older, having to go out and look for a place to live. To be honest, I try not to think about it.”

Mary hopes the recent increase in NZ Super rates is indicative of a government that is intent on doing something about the huge numbers of people entering retirement without homeownership.

An artist’s impression of a $100m Kainga Ora apartment project in Manukau, which is due to get under way this month. In recognition of the need for housing for older people, apartments will only be made available to people over the age of 55. (Image: Supplied)

‘Cash in the bank maximum too low’

Mary would like to see the maximum “cash in the bank” allowance for social housing to be increased substantially. For most councils, including Auckland and Wellington, the maximum savings level is approximately $40,000 – $43,000. Which leaves those with more than that out of luck. They have too much to qualify, but nowhere near enough to buy a house, and are unable to secure a mortgage.

Mary would also like to see more central and local investment in building subsidised apartments for retirees who don’t own property.

Moving in with family to live in a multigenerational household is an option for some retirees, and is especially common in Asian and Pasifika communities. Kaumātua play a large and important role in Māori life and on the marae, for example, where they are the keepers of knowledge and tradition. Traditionally, elders will live with whānau, helping raise the grandchildren and being cared for.

But such arrangements are not possible for everyone.

‘Equity steadily erodes’

Elderly residents of the 14 communities provided by Abbeyfield, a registered Charity and Community Housing Provider, have spoken to Stuff in the past about enjoying their environment. While each person has their own studio unit, there is a shared kitchen and living room.

Grant Smith lives in an Abbeyfield studio unit in Palmerston North. As with all villages, meals are provided. He pays $790 a fortnight in rent plus $5 a fortnight for wifi. The rent covers power and food. He told Stuff last year he found it affordable. “We get meals, a well-heated space and furnished common area. We don’t have to shop for groceries.”

The Abbeyfield Independent Centre in Palmerston North (Photo: Warwick Smith/Stuff)

Abbeyfield’s social housing requirements differ from those of most councils. Executive officer Susan Jenkins says it’s difficult to set a fixed income or asset amount as the cost of alternative market accommodation varies between regions. So a broader assessment of need is made, which includes the ability to afford market alternatives (such as market rent or retirement village), the availability of alternatives, and social need – loneliness or isolation.

“We often hear of older people who may have stayed on in a home they owned for many years post-retirement, but haven’t been able to afford or manage home maintenance, so the value of their property, and thus their equity, steadily erodes.

“They then can’t afford a licence to occupy [a retirement village unit] as well as the ongoing village charges. This especially applies in smaller regional locations where there are few alternatives for older people’s housing.

“From renters, we frequently hear that rent can absorb their entire income from NZ Super, leaving food and power etc to be covered out of savings – a situation that can’t be sustained for too long.”

Many retirees resist the idea of shared housing, and don’t believe they would be happy.

Having lived alone for a long time in his council unit, Alan Button has no desire to live in a flatting situation. “We have quite a little community here, and we help each other out,” he says. “We come from all sorts of different environments. The neighbourhood is quiet, and we stop and talk to each other.”

The statistics aren’t promising

Home ownership data from the 2018 Census found that one in four 60 to 64 year-olds did not own the home they lived in. On current trends by 2053, almost half of over-65s would be renting, one estimate suggests, which would mean 640,000 over-65s, including 326,000 renters over 85.

Three of the people in this story participated in Stuff’s NowNext Survey, stating they were “worried” or “very worried” about their future as renters.

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