Poverty Trap Snares Would-Be Home Owners

Published: Wed 13 Oct 1999 03:34 PM
Baptist City Mission
While paying 60% of their income on rent, many low income families
are being refused mortgages because banks will not let them pay
more than about 25% of income to buy a house, says Baptist Action's
City Mission manager Gary Corbett.
"That's what we mean by the poverty trap. We're pleased that
Housing New Zealand properties are available to tenants but the
reality is, many can't do it," he said.
Mr Corbett was commenting on Housing New Zealand Minister Tony
Ryall's comments on increased house sales to low income HNZ tenants,
particularly in Auckland, under the Home Buy scheme.
"We know of families in Orakei whose HNZ rent has increased so
much, in line with the market rents policy, that they're forced
to move out of the community they've been a part of for decades,"
added Mr Corbett.
"These houses are on valuable land which is being sold to developers
once the low income tenants have been forced out."
Mr Corbett added that it wasn't unusual for some low income families
to pay up to 80% of income on rent.
The Baptist City Mission provides budgeting management services
to 170 low income and food parcels to 150 people a week.

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