Higher mortgage interest rates, a squeezed and pricey housing rental market, and many other cost-of-living hikes are stretching some family budgets beyond the limit and putting their homes and health at risk, say inundated social service charities in the South.
The charities describe a worsening crisis of "housing insecurity" — people not having a permanent or safe home, or at risk of not having one.
They say the crisis is affecting all kinds of people — including some families with two earners — and causing risk and stress.
People who were previously getting by comfortably are teetering on the breadline and sometimes falling below it, particularly when there is a sudden shock, such as loss of income or an unavoidable major expense such as house repairs.
Presbyterian Support Otago — which provides financial advice and social support to struggling families, as well as a foodbank — has helped six families this year who have given up their mortgaged homes, compared with one family in the same period last year.
The charity’s chief executive, Jo O’Neill, said: "We have been dealing with food insecurity for a very long time, but now we are seeing housing insecurity as a significant factor."
The charity, which is running its annual foodbank appeal in the Octagon today has seen a 25% increase during the first three months of 2023 for its financial mentoring service for struggling families, compared with the same period last year.
"We have a responsibility to try to meet needs — but it is a finger in the dyke."
The charity says it is also seeing an increase in people presenting with "much greater frustration" and complex needs, including mental illness and physical or mental harm in the family.
"Feeling out of control can sometimes lead to anger and aggression," she said.
The Society of St Vincent de Paul is experiencing three times as many people using its Dunedin foodbank on the last days leading up to a Wednesday — a typical pay and benefit day.
Pastoral co-ordinator Sarah Strang says foodbank users include some working families who are "functioning close to the bone".
"People are coming in during their lunch breaks to pick up food parcels. It doesn’t seem right."
She points to family sickness as a contributory factor.
"Employers and schools seem quicker to send people home if they are unwell since Covid, which uses up people’s leave entitlement — whereas, in the past, working people might have struggled on to pay the bills.
"A couple of days without pay can send them here."
People forced by circumstance from home ownership into the rental market may find they leap from the frying pan into the fire, due to low supply versus high demand, high rental prices and picky landlords.
Some investors have moved away from the rental market, due to increased legal obligations to tenants; and remaining landlords can be "very selective" when choosing tenants, says Joe Nidd, owner of real estate firm Nidd Realty.
"Some owners would rather their houses stay unoccupied while waiting for that perfect person, than have someone with a higher-risk profile," he said.
People already in rental accommodation can face crunch time when a period of "sticky rent"— rent that is below market value — comes to an end, or they are evicted due to a landlord moving in or refurbishing, or they are desperate to move for wellbeing reasons.
Renters needing to swap home can find it hard to get an affordable rental that meets their needs.
Rachael Courtney, Nidd Realty managing director, said: "It is awful. Trying to find people a property that is suitable to their need, and that they can stay in for a long time, can be hard."
She emphasises the importance of encouraging people to apply for rentals whatever their circumstance.
"We help landlords not to discriminate," she says.
Ethan Smith (26) believes landlords do discriminate.
Mr Smith, who is on benefits, lives alone, has disabilities and volunteers in the Cat Rescue Dunedin Charity Shop in North Dunedin.
He has been trying to move from his flat — which he says is too noisy — for more than a year.
He says he can afford to pay reasonable rent and has references.
Yet he has looked at 72 rentals, applied for 21, and got none.
"I will keep going, but it is horrible," he said.
"It makes me feel worthless and sad that people who are probably good people keep turning me down. I am told it is because I am a single male."
The Salvation Army’s latest State of the Nation report describes a "mammoth" housing crisis and its social policy analyst Paul Barber says the government is in a "constant catch-up situation" due to inflation’s erosive effect on families’ spending power— more government help is needed.
The winter energy payment has not increased since 2018 and thresholds for the accommodation supplement have not been adjusted to reflect inflation, he says.
"The hardship is being felt now. We are going to lose ground if support doesn’t keep pace."
In the first quarter of 2023, 51 families in the South were given emergency housing grants by the Ministry of Social Development (MSD), mostly in Dunedin and Invercargill, enabling temporary accommodation when between homes.
People on the waiting list for social housing across Otago and the South have more than trebled over the past five years — 738 families need homes compared with 204 in March 2018, according to the MSD.
Nearly 1200 bedrooms are needed.
Social housing provider Kāinga Ora, which provides housing across the region for 5200 people, expects to add 74 new homes over the next year, meeting 10% of the outstanding need.
More than nine in 10 families on the waiting list are "at risk", the MSD says, with more than half on the waiting list in Dunedin and more than a quarter in Invercargill.
Kāinga Ora’s Kerrie Young, regional director Otago-Southland, said: "While we’ve boosted the supply of new housing, we know we have much more to do."
Minister for Social Development and Employment Carmel Sepuloni agrees, telling the Otago Daily Times: "In response to cost of living pressures this Government has increased main benefits ... however, there is more to do." The Labour government has increased Working for Families to reach more than 300,000 families, as well as rolling out the winter energy payment and expanding Ka Ora Ka Ako — free school meals.
Charities in the South are calling for increases in government support for them too.
Presbyterian Support Otago says it is facing its "greatest funding challenge ever" due to the increased demand combined with below-inflation grant-aiding by Government, a decline in people’s ability to give to charities and inflationary increases to charity overheads.
Charity boss Ms O’Neill said: "We rely on people’s generosity to fill the foodbank and provide services — and the cost of living has hammered that."
Society of St Vincent de Paul has also seen a drop in foodbank donations.
It has cut back on providing some household necessities, such as deodorant, so it can buy essential packaged foods — such as dried pasta — that is normally donated.
The charity says it normally has a month’s supply of long-life food on its shelves, but now all food donated is going straight into food parcels.
The charity spends $1500 a week on food alone, including meat, cheese and vegetables.
Jackie Bannon runs the Bowling Club, a community eatery providing low-cost and free meals in the heart of Caversham, a Dunedin suburb home to many working families.
To avoid the challenge of stigma, it has set up a wordless system — people pick up a free food voucher on the way in, and hand it over instead of paying.
There has been a "steady rise" in meals given away since the voucher system was introduced.
"People can hide poverty — it’s not always possible to spot who is in most need," she said.
"We work to ensure this is a safe space and it isn’t a weird thing to use a voucher. However, no-one ever takes the last one."
In the same suburb, Kirsten Clarkson, leaseholder of the Caversham-based Carisbrook Hotel, closed her doors this month, saying many people can no longer afford to go out.
"Some people just came in here to drink water and for the company. There is an influx of heartache in this part of Dunedin."
Despite facing rising demand and financial challenges, Ms O’Neill emphasises the importance of people seeking help from charities when they need it.
She says: "It can be embarrassing to reach out — but our services are there for everyone who needs them. We do not judge."
She added: "I can’t imagine someone who is paid the living wage being able to pay even basic household costs, let alone people on a benefit because they have lost their jobs here.
"The appreciation is phenomenal when people get to a place of greater security — but we need to stop them entering chaos in the first place.
"As a nation, we are doing something wrong — and Dunedin is a small place but has a huge underbelly of need."
