New Zealand’s housing crisis has disproportionately affected Māori communities, particularly in rural areas where access to healthy homes is limited. The challenge is further compounded by the collective ownership of Māori land, which poses difficulties for traditional banking systems.
Both previous and current governments have committed substantial resources to address these issues. The former Labour-led government allocated over NZ$730 million to Māori-led housing solutions, while this week, the current coalition government announced a $200 million investment in affordable rentals.
However, innovative housing models are emerging within Māori communities themselves. One notable example is Whare Ora, a community-driven housing initiative based in Te Tairāwhiti (East Coast). Since its inception in 2020, Whare Ora has focused on producing healthy, affordable, and transportable houses for local communities. The initiative, run by Hikurangi Enterprises, has delivered over 80 homes to whānau, directly addressing the housing shortage and the financial barriers of building on Māori land with multiple owners.
Despite the success of Whare Ora in providing affordable homes, financial barriers remain a significant challenge for whānau wishing to place homes on ancestral lands. These challenges stem from the perceived risk of lending against Māori freehold land, which is often inalienable and collectively owned, creating issues for banks that typically require land to be owned by a single individual to secure a mortgage.
In some exceptional cases, such as the recent agreement between Ngāti Whātua Ōrakei and BNZ, trust-backed guarantees have mitigated these barriers. However, most Māori communities lack the financial resources or large asset bases required to secure such guarantees, leaving many whānau unable to access loans.
This issue is particularly acute in regions like Te Tairāwhiti, where about 25% of land is under Māori governance. For these communities, the inability to leverage ancestral land for housing represents a lost opportunity. This systemic issue has been documented by the National Housing Commission in 1983, and in reports from the Auditor General in 2011 and 2014.
In response to these challenges, Hikurangi Enterprises has partnered with Community Finance, a community-based lender, to explore ways to provide financing for housing on collectively-owned Māori land. This partnership led to the creation of Kaenga Hou, a new trust that offers progressive homeownership options in Te Tairāwhiti.
One of Kaenga Hou’s innovative solutions is the introduction of a license-to-occupy agreement, which allows for lending on ancestral land. This model is funded by impact investors who provide capital at below-market interest rates, aiming to address regional housing shortages while promoting Māori wellbeing by connecting whānau to their ancestral lands.
The ethical finance model behind Kaenga Hou emphasizes compassionate investment, seeking to reduce the risks for both whānau and investors. A key element of this model is a rent-to-buy program, where whānau make rental payments that go towards repaying the trust’s interest to investors and building savings to purchase the home outright over time. Additionally, a portion of these payments supports an “aroha fund,” which provides financial assistance to whānau facing unexpected hardships.
This approach not only helps reduce risk but also ensures that whānau are empowered and protected from exploitative lending practices. In the unlikely event that a whānau must exit the program, they would leave with a portion of their savings and would have paid an affordable rent, ensuring they are in a better financial position than when they entered the program.
These community-led initiatives offer valuable lessons for addressing housing issues on ancestral Māori lands. The Waitangi Tribunal recently concluded that the Crown has a duty to provide housing due to the guarantee of tino rangatiratanga (self-determination) over kāinga (homes and settlements) under Te Tiriti o Waitangi. Despite existing government loan schemes for housing on Māori land, these have been criticized for low uptake and accessibility, similar to the barriers faced by traditional lending systems.
The success of initiatives like Whare Ora and Kaenga Hou underscores the potential of community-driven, whānau-centered finance models. These models prioritize the wellbeing of Māori communities while navigating the complexities of land ownership and lending. As New Zealand grapples with its housing crisis, these innovative solutions offer a roadmap for more inclusive and sustainable housing solutions, centered on the needs of Māori whānau and guided by the principles of Te Tiriti o Waitangi.
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