Older People's Housing Futures in 2050

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ACKNOWLEDGEMENTS
This report was produced for the Centre for Housing Research, Aotearoa New Zealand
(CHRANZ). The CHRANZ Board gratefully acknowledges the financial and other support
provided by Housing New Zealand Corporation.
DISCLAIMER
The opinions in this report reflect the view of the authors and do not necessarily reflect those
of the CHRANZ Board or the funding organisations. No liability is accepted by the CHRANZ
Board for the accuracy or omission of any statement, advice or information in this research
report and for any commercial, investment or other decisions made upon the reliability of this
research report.

Older People’s Housing Futures in 2050: Three
Scenarios for an Ageing Society
Prepared for
Centre for Housing Research Aotearoa New Zealand
Kay Saville-Smith (CRESA), Bev James (Public Policy &
Research), and Julie Warren (CRESA)
with Andrew Coleman (Motu)
July 2009

ACKNOWLEDGEMENTS
We would like to thank all the participants in this research for their time and
generosity in sharing their experiences with us.
We would also like to thank participants in the CHRANZ Dynamics of Housing
Demand of Over 65 Year Olds (2010 – 2050) Work in Progress Seminar, 19 May
2009 who provided valuable feedback.
CRESA, its contributors, employees and Directors make every effort to ensure
the accuracy of content and validity of interpretation of its reports. Much of
the data used to compile these reports and contributing to our interpretation is
supplied by others. We shall not be liable for any loss or damage sustained
by any person using this report whatever the cause of such loss or damage.

CONTENTS
EXECUTIVE SUMMARY
Page
1. INTRODUCTION 1
Research Context 2
Research Objectives and Questions 5
PART 1: OLDER PEOPLE’S HOUSING SCENARIOS 7
2. BUILDING HOUSING SCENARIOS 8
Scenarios: Purpose, Use and Effectiveness 8
Scenarios vs Forecasts 8
Strengths and Weaknesses of Scenarios 9
Our Method for Building Scenarios 9
Component 1: Critical Socio-demographic and Housing
Trends
10
Component 2: Life Cycle Equilibrium Modelling 10
Component 3: Review of International Housing Responses
to Ageing Societies
10
Component 4: Housing Futures Workshops 11
Housing Consumer Workshops 11
Sector Workshops 12
3. SCENARIO BASELINE & ASSUMPTIONS 14
Older People, Housing and Services: the Current Baseline 14
New Zealand Housing, the Housing Stock and Older People 14
Services, Housing and Older People in New Zealand 15
Key Assumptions in the 2050 Scenarios 16
Demographic Conditions 16
Key Socio-Economic Conditions 16
Housing Stock and Neighbourhood Characteristics 17
Housing Demand Implications of an Ageing Society 17
4. OLDER PEOPLE’S HOUSING FUTURES - 2050 18
Older People’s Housing Futures – Three Scenarios 18
Comparative Potential Outcomes of Older People’s Housing
Futures
20
Probabilities of Scenario Fruition 23
Optimising Older People’s 2050 Housing Future 25

PART 2: SCENARIO INPUTS 27
5. AGEING NEW ZELAND: PEOPLE & HOUSING 28
Demographic Projections 28
Larger Numbers of Older People Who are More Ethnically
Diverse
29
Increased Median Age 29
Proportions of Older People and the Dependency Ratio 29
The Old will Get Older 30
Older People Everywhere 30
Households in an Ageing Society 31
Some Important Socio-Economic Trends 31
Labour force participation 32
Debt and Savings 32
Housing Tenure 33
Mobility and Disability 36
Housing Stock in New Zealand 37
Ageing Stock, Stock Performance, and Repair and
Maintenance
37
New Stock Suitability 39
Neighbourhoods 43
6. A THEORETICAL MODEL: HOUSING DEMAND AND AGEING 44
The Model 44
Agent Characteristics 46
Housing Options, House ‘Quality’, and House Prices 46
Taxes and Housing Finance 48
Housing Supply 49
Applying the Model 49
Impacts of Different Policy Options 52
Impacts on Housing Demand in the Core Tables 53
Taxes Increased to Pay for Pensions 53
Taxes Increased to Pay for Pensions and Medical Care 55
No Changes in Taxes Or Total Pension Expenditure 56
Summary of the Core Results 56
Impacts on Housing Demand for Other Cases 56
Inflation and Interest Rates 57
House Supply 59

Reverse Mortgages and Inheritance 61
A Comment on Implications 62
7. NZ CONSUMER & SECTOR REFLECTIONS 66
Consumer Aspirations and Expectations 66
Dwelling size and design 66
Affordable housing 67
Residential options 70
House condition and performance 72
Home supports 74
Neighbourhood design and connectivity 75
Housing information and advice 76
Aspirations and visions 77
New Settlers 78
Pacific 79
Maori 79
65-70 Age Group 80
50-55 Age Group 80
Housing futures for young people 81
Enabling Optimal Response: Consumer workshop views 82
Sector Workshop Responses to an Ageing Population 83
Making older people’s housing a strategic priority 83
Improved housing affordability for older people 83
Improved house performance, design and accessibility 84
A greater range of housing options 85
Improving the responsiveness of the rental market 86
Improved information 87
Improved agency working together 87
Improved knowledge base for policy and practice 87
8. AGEING SOCIETIES & HOUSING: INTERNATIONAL
RESPONSE
88
Defining Ageing 88
Ageing Populations Internationally 89
International Housing Responses to Ageing Populations 91
Cross-sectoral Co-ordination 91
Improved Existing Dwelling Performance and Amenities 94

Finland 97
United Kingdom 97
Canada 99
Australia 100
United States of America 103
New Housing Designed for Long Lives 103
Secure and Affordable Housing 110
Lifetime Neighbourhoods and Cities 111
Learnings for New Zealand’s Future 112
PART 3: RESEARCH FOR ACTION 114
9. FINDING A BRIGHTER FUTURE 115
Integrated Knowledge – What Do We Need to Know About? 118
Getting the Knowledge? 119
Capturing Overseas Research and Practice 119
Using Existing Research, Evaluation and Data in New
Zealand
120
New Research, Evaluation and Data in New Zealand 120
Four Research Themes for a Brighter Integrated Future 121
Glossary 122
Bibliography 124
Appendix A Some Scenarios Used to Explore Housing Futures 131
Appendix B An Intergenerational Model of Housing Demand 133
Appendix C Workshop Guidelines 152
Appendix D Consumer Workshop Inputs 154
Appendix E Sector Workshop Inputs 173

INFOBOXES
Infobox 1.1 Comparing the Housing Related Conditions of 65 yr-olds of
2010 with the 65 yr-olds of 2050
3
Infobox 4.1 Potential Outcomes for Older People's 2050 Housing
Futures Scenarios
21
Infobox 5.1 New Zealand’s Lifetime Design Foundation Establishment
Members
42
Infobox 8.1 Integrative and Co-ordination Instruments for Older People’s
Housing, Health and Social Support in the United Kingdom
2008
94
Infobox 8.2 Life Stages and Maintenance, Repairs and Renovation 95
Infobox 8.3 Core Housing Related Programmes in the United Kingdom
2008
98
Infobox 8.4 Future Housing Related Programmes in the United Kingdom
from 2009
99
Infobox 8.5 A Summary of Australian Home Maintenance and
Modification Initiatives
101
Infobox 8.6 Summary of Countries with Regulatory Requirements for
Disability Access to New Dwellings as of 2005
105
Infobox 8.7 United States Visitability Initiatives for New Homes Current
in 2008
107
Infobox 8.8 Key Approaches to Accessible Mainstream Housing Design 109
Infobox 8.9 United States FHA Housing Equity Conversion Mortgage
2008
111
TABLES
Table 5.1 Proportion of Population Aged 65 years or more in the
Auckland Region by Current Local Authorities 1991-2031
31
Table 5.2 Median Years at Usual Residence by Tenure of Household 36
Table 5.3 Distribution of Dwelling Average Conditions by Age of
Householder – BRANZ HCS 1999 and 2004
38
Table 5.4 Average Size of New Dwellings by March ended Year 41
Table 5.5 Estimated Monthly Winter Energy Costs by Size of
Dwellings (HEEP)
41
Table 5.6 Estimated Monthly Winter Energy Costs by Dwelling &
Household Size (HEEP)
41
Table 6.1 Supply Curve 1: Both Curves Very Elastic 50
Table 6.2 Supply Curve 2: Both Curves Upward Sloping 51
Table 6.3 Supply Curve 3: High Quality Supply Curve Steeply Upward
Sloping
52
Table 6.4 Variations in Interest Rates and Inflation Rates for Supply
Curve 2
57
Table 6.5 Additional Variations in Supply Curves, Inflation = 2 60
Table 6.6 Reverse Mortgages and Inheritances; Supply Curve 2,
Inflation = 2
62
Table 8.1 Ageing Population Indicators for Selected Countries 89
Table 8.2 Old Age Dependency Ratios in European Countries by
Population Change
90
Table 8.3 Maintenance, Repairs & Renovation Assistance for Owner
Occupiers in Europe, North America and Australia 2005
96
Table 8.4 Costs of Adaptable Housing as % of Total Cost in Australia 107

FIGURES
Figure 1.1 New Zealand Housing Stock Age and Configuration 4
Figure 4.1 Probabilities of Scenario Fruition: Cross-Sectoral Action and
Innovation Parameters
24
Figure 4.2 Probabilities of Scenario Fruition: Timing of Expenditure and
Return on Investment Parameters
25
Figure 5.1 Composition of Households in a Rental Dwelling with an
Older Person Reference in 2006 with 2051 BERL NZIRA
Projections
34
Figure 5.2 Proportion of Housing Stock with Five Rooms or More by
Country – 1st Decade of the 21st Century
40
Figure 8.1 Triangle for Independence – 2008 UK National Strategy for
Housing in an Ageing Society
93
Figure 8.2 Lifetime Homes in the UK - 2008 104

i
EXECUTIVE SUMMARY
i. In 2050 there could be over 800,000 households headed by older people in New
Zealand. The population of people aged 65 years or more is likely to be in the
region of 1.35 million. That is, about a quarter of the population will be older
people. Most older people will live in their own homes, but the numbers of
households headed by an older person in the rental market will more than
double. Older people will be more diverse ethnically than today, and there will be
more older people entering their eighties and nineties. Older people will typically
live alone or with an older partner. More than a million older people will not be in
paid labour and well over half a million can be expected to have a disability that
impairs their mobility. Around 325,000 older people will not have a drivers licence
and even more are likely to be dependent on public transport, walking or on
others.
ii. The challenge is how to ensure that older people have the sort of housing that
keeps them well, keeps them connected, and keeps them productive. In 2050,
the impacts on wider society of the housing conditions in which older people live
will not be able to be ignored. The housing future of older people is the housing
future of New Zealand. The scenarios presented here are designed to help us
actively mould a positive future.
The Research
iii. This research has involved developing three realistic scenarios of the possible
futures for older people’s housing. Those scenarios have been built through:
• Analysing critical socio-demographic and housing trends that are likely to
impact on older people’s housing needs over 2010-2050.
• Modelling possible impacts on older people’s housing demand of savings and
consumption behaviour in the context of different policy and market conditions
by applying an equilibrium lifecycle model.
• Reviewing domestic and international research, evaluative and policy
literature on key housing issues affecting older people’s housing futures.
• Workshopping housing futures with key populations and stakeholders.
iv. By developing these scenarios of older people’s housing futures, this report is
designed to provoke reflection and allow stakeholders, decision-makers and
advisers to leave their current short-term focus to look at the opportunities and
challenges presented by an ageing society well into the future.
Alternative Futures
v. Some of those futures do not look particularly desirable.
vi. The Business As Usual Scenario, for instance, portrays a future in which New
Zealand continues current levels of investment and innovation in the new housing
and existing housing stocks. It is a future in which there is little improvement in
neighbourhood design and settlement connection and in which the social and
health supports for older people are largely de-coupled from housing support and
policy. That Business As Usual Scenario will see a future in which funding
streams related to older people’s housing remain fragmented. Co-ordination
between housing, health and social services will be patchy. The building industry
and housing sectors will respond to housing demand but not to older people’s
housing needs. The housing stock will have a higher proportion of better

ii
Housing services Social services
Social
Support
Enabling
Environment
Active
Living
Good
Health
Health services
performing dwellings because of performance requirements set in place in the
first decade of the 21st century. But most of the stock, already in place in 2009,
will still perform relatively poorly. Industry and public good investment will be
limited and the industry will use similar production chains as currently. Housing
affordability instruments such as home equity release and shared equity will be
minimal, not well understood, and not subject to strong protections. Older
people’s tenure in the rental market will be relatively insecure with continuing high
churn of dwellings between the rental and the owner occupied market. Thermal
performance of dwellings in the rental market will be poor as landlords have
previously shown low take up of retrofit assistance and current new grants under
the 2009 budget are not available for landlords. New and existing
neighbourhoods in urban settlements will be largely dependent on private cars for
connectivity.
vii. A significantly more desirable future is presented in the Integrated Response
Scenario. That scenario presents a world in which New Zealand has made a
considerable shift in the approach to housing in an ageing society.
viii. The Integrated Response Scenario sees a reprioritisation of housing for older
people in the mix of older people’s services. It embeds the idea that good
housing is the bedrock of
older people’s lives and the
pathway to avoid significant
and costly dependency. In
this future, housing and the
built environment are seen
as fundamental to older
people remaining both
socially and economically
active. Maintaining older
people’s independence as
long as possible through
the provision of enabling
environments and services
will be determined as the best way to optimise funding investments.
ix. As a consequence, there will be both central and local government initiatives to
promote life time design in both housing and neighbourhood design. This will
involve mandatory requirements on all new dwellings with or without public
investment to be built to lifetime design standards. Regional and local
government will assess plans for new and redeveloped neighbourhoods,
transport development plans and services, against a nationally agreed checklist
for age-friendly settlements. In urban settlements the choice of transport mode
will increase and residents in fewer neighbourhoods will depend solely on private
cars for connectivity to the rest of the city. Industry and public good research
monies will be directed to developing affordable, life time housing, street and
transport design and associated technologies. Integrated funding streams for
dwelling retrofit and dwelling modification will be established using evidence-
based and consistent assessment tools across all sectors. Housing stock
typologies will be diversified and neighbourhoods will be functionally mixed with a
variety of different densities.
x. The third scenario sees a future in which New Zealand’s response to an ageing
population structure is characterised by Fragmented Innovations. This is a

iii
future in which there may be significant innovation effort but the benefits are less
than optimal. Housing innovation will be confined to the premium end of the
housing market and residential developments. There will be a diversification of
housing typologies, but the dominant housing form will remain detached
dwellings and housing sizes will stabilise. The problem for older people of finding
dwellings to which they can downsize to release equity and to reduce housing
burdens will remain. Non-owner occupier tenures will have increased. The use of
financial instruments such as home equity release will be available. Protections
around those instruments will be established. Those protections will have been
developed in response to the financial crisis experienced in 2008 and 2009 and
the successive failure of finance companies rather than because of a coherent
approach to older people’s needs. Older people’s tenure in the rental market will
be relatively insecure with continuing high churn of dwellings between the rental
and the owner occupied market. Funding streams for dwelling retrofit and
modification will remain separate and a fragmented patchwork of services and
housing assistance will prevail.
Striving for a Good Housing Future in an Ageing Society
xi. Although the demographics of ageing may be inexorable and challenging, the
response to ageing can be purposeful. We know from international responses
that that sort of mobilisation is possible. Ensuring a decent future for older
people’s housing and one in which the costs of ageing are mitigated involves
actively recognising housing as a fundamental determinant to wellbeing.
xii. If New Zealand wishes to bridge the gap between older people’s housing need,
housing demand and housing supply as portrayed in the Integrated Response
Scenario, purposeful action will be required. A multi-sectoral mobilisation of
central and local government, the private, public and community sectors in
housing, the building industry, and health and social services will be needed.
New Zealand will need to:
• Rationalise funding streams directed to housing related services to reduce
confusion, compliance and transaction costs and to optimise the effective use
of investment.
• Implement formal mechanisms to increase cross-sectoral integration around
housing and services for older people including:
• Developing and adopting impact assessment, needs assessment and
performance assessment tools across sectors that impact on the housing
and well-being futures of older people.
• Joint contracting and commissioning of older people’s services.
• A comprehensive range of housing and service solutions which can be
tailored to need through robust information and advice services.
• Implement a two-pronged strategy to improve the diversity, affordability,
performance and functionality of both new stock and existing stock.
Research for Positive Futures
xiii. Just as New Zealand has a choice about the future of older people’s housing, it
also has a choice around its research in this area. New Zealand can take a
business as usual approach characterised by a patchwork of research that adds
to our knowledge and understanding but too frequently does not address the key
knowledge needs across stakeholders. Or we can seek a more integrated
knowledge platform If we want to drive a good future research needs to focus on:
• The housing, health and welfare interface. In particular:

iv
• The housing conditions needed to facilitate improved health and well-
being outcomes for older people.
• The value of delivering of care in home-base settings relative to other
settings.
• The relationship between dwelling accessibility, independence,
productivity, and care costs.
• The relationship between older people’s housing needs, housing demand and
housing supply. In particular:
• Quantifying the gap between need, demand and supply in relation to:
• tenure
• affordable housing costs
• dwelling typology
• dwelling connectivity to neighbourhoods and city systems
• dwelling condition and functionality.
• Affordable solutions to meeting older people’s housing needs including:
• Establishing the size of marginal costs of lifetime design and cost-
effective options for lifetime design builds.
• Identifying intermediate housing instruments suitable for older
people.
• Establishing affordable repairs, maintenance and retrofit options
and services.
• Future-proofing the new-build stock in New Zealand. In particular:
• Establishing the value case for lifetime design for key stakeholders:
• Government
• Industry
• Households
• Identifying and testing systems, products and processes that would
encourage industry supply of life time design dwellings.
• Evaluating the efficacy of various incentive, regulatory and investment
models to promote lifetime design.
• Making good the existing New Zealand housing stock: In particular:
• Establishing the condition, performance and functionality of New Zealand
dwellings.
• Establishing the value case for retrofit specified to both thermal and
amenity performance of dwellings.
• Identifying and testing systems, products and processes that would
encourage industry supply of life time design retrofit in existing dwellings.
• Evaluating the efficacy of various incentive, regulatory and investment
models to promote retrofit.
• Increasing older people’s connectivity and activity with a particular focus on
age-friendly neighbourhoods and settlement systems.
xiv. In developing this research response, New Zealand needs to learn from
overseas. We also need New Zealand specific data to know what is applicable
and useful in New Zealand conditions, given the particular characteristics of our
ageing population, ethnic diversity, regional/local distinctions, our government
structures, current and historical policy settings, and characteristics of the
housing market. There is much to be done.

1
1. INTRODUCTION
1.1 This research is concerned with the patterns of housing futures likely to be
evident among people 65 years and older between 2010 and 2050. It is
directed to improving New Zealand’s ability to plan for and respond to the
changing housing demands of older people over the next forty years by:
• Identifying the key factors current and emerging that are likely to impact
on the housing needs of older peoples and their patterns of consumption.
• Providing scenarios of housing demand among older people.
• Setting out a plan for future research that will provide a more robust
evidential base of knowledge for responding to the changing housing
demands of older people.
1.2 The report presents three scenarios around housing futures for older people
in the context of an ageing society. Those are:
• Scenario 1: Business as Usual;
• Scenario 2: Integrated Response; and
• Scenario 3: Fragmented Innovations.
1.3 Those Scenarios are not intended as predictions of the future. They are
vehicles to investigate current issues and provide insights that will inform
policy and practice decisions. They are designed to allow stakeholders,
decision-makers and advisers to consider options and possibilities that might
not otherwise be considered. Scenarios allow people to go outside usual
operational boundaries, and reflect on old problems in new ways.
1.4 The report is divided into three parts in addition to this introduction which sets
out the context and focus of this report. Those three parts can be read
separately or as a whole. The material in Part 2 is intended to provide an
additional resource for all those interested in responding to the housing needs
of older people. Part 3 deals with the research base needed to drive an
effective evidence-based response to older people’s housing futures.
1.5 The report is structured as follows:
• Part 1 consists of three sections and presents the:
• Method used for scenario-building (Section 2);
• Conditions and assumptions that underpin the scenarios (Section 3);
and,
• Three housing futures for older people in 2050 (Section 4).
• Part 2 consists of four sections which are the inputs that have informed
the older people’s housing futures scenarios presented in Part 1 of this
report: Those sections present:
• Critical socio-demographic and housing trends (Section 5);
• Results of life cycle equilibrium modelling (Section 6);
• Data generated from consumer and sector workshops (Section 7); and
• The findings of a review of international responses to the challenge of
older people’s housing in ageing societies (Section 8).
• Part 3 sets out a research plan directed to improving the knowledge base
for effective housing responses for older people in an ageing society
(Section 9).

2
Research Context
1.6 The focus of this research on older people’s housing demand reflects four
significant realities for New Zealand in the first half of the 21st century. Those
are:
• New Zealand’s complex ageing population dynamic;
• the diversity of housing pathways associated with different age cohorts
and ethnicities;
• the importance of house performance for older people’s health and well-
being; and
• the extended life expectancies of people living in New Zealand.
1.7 Each of these issues is addressed in more detail in subsequent sections of
this report. However, in summary it is important to note that New Zealand like
many countries has an ageing population. By around 2030 the number of
people living in New Zealand who are 65 years or more is expected to exceed
one million and by 2061, New Zealand can expect its older population to be
about 1.44 million. Between now and 2050, the proportion of the population
aged 65 years or more is expected to increase from 12 percent to about a
quarter of the population.
1.8 But while New Zealand’s population structure is ageing overall, the population
structures of some populations in New Zealand are considerably younger
than others. The ‘European or Other’ population structure1 is ageing more
quickly. The Maori and Pacific population structures have a younger profile.
Maori aged 65 and over are likely to make up 9 percent (71,000) of the Maori
population by 2026. Only 7 percent of the Pacific population will be 65 years
or older in 2026. However, the groups falling within the Asian population will
have about 12 percent of their population aged 65 years or older in 2026
compared to only 5 percent in 2006. The median age of the European or
Other population will increase 4.7 years by 2026 compared to a 7.5 year
increase in the median age in the Asian population, a 2.4 year increase in
median age for Maori and an increase of 1.6 years in the median age for
Pacific peoples.
1.9 That complex demographic picture interfaces with housing patterns in New
Zealand, which also show differences across ethnic groups and over age
cohorts. Overall, New Zealand has falling rates of owner occupation, but
some groups have longstanding concentrations in rental housing in New
Zealand. Moreover, the conditions around housing access have changed
considerably over the years. This is quite evident when the situation of those
who will be 65 years in 2010 is compared with the situation of those people
who will be 65 years in 2050. The latter are the 23 year olds of today. The 65
year olds in 2010 were 23 year olds in 1968.
1.10 As Infobox 1.1 shows, the conditions faced by 23 year olds today, the 65 year
olds of 2050, are very different.
1 Statistics New Zealand base the 2006 national ethnic population projections on four broad ethnic
populations of New Zealand: European or Other (including “New Zealander”), Maori, Pacific and Asian.
Statistics New Zealand, 2008d, Projections Overview, www.stats.govt.nz.

3
Infobox 1.1: Comparing the Housing Related Conditions of 65 yr-olds of 2010 with
the 65 yr-olds of 20502
Indicator 1968 2008/09
Govt Home Ownership
and Other Housing
Assistance
 State Advances mortgages
(56,368 loans approved to 31
March 1967)
 Family Benefit capitalisation
(5,289 advances 1967-68)
 Mortgage Guarantee Scheme for
housing
 State rental housing (49,424
rentals)
 State house building programme
(rising; 1,657 units 1968-69)
 Sale of state houses to tenants
 Housing assistance through
Maori Affairs
 Welcome Home Loan (1,070
loans 2006-07)
 Accommodation Supplement
(income tested, strongly targeted
and restricted to payment of a
portion of the ‘unaffordable gap’)
 Housing-related components of
Kiwi Saver
 Shared Equity Pilot
 State rental housing (approx
66,000)
 New state houses (926 units
2006-07)
Average Dwelling size3 (1976) House 121m2; Flat 83m2 House 205m2; Flat 137m2
Average number of
occupants per dwelling 3.52 (1966) 2.7 (2006)
Home Ownership (with
and without mortgage) 69% (1966) 66.9% (2006, included family trusts)
Average rate of
interest on mortgage
6.74% (Market)
3% (State Advances) 10.6% – 10.9% (floating)
Age of marriage Bride: 23.29; Groom 26.33 (average) Bride: 30.2; Groom 32.5 (median)
Age of mother at birth
of first child 23.39 (average) 28 (median)
Birth rate 2.61 per woman 2.1 per woman
Life expectancy at
birth Females: 74.30; Males: 68.19 Females: 81.9; Males: 77.9
Tertiary Education
Assistance
Scholarships and bursaries
providing allowances. Matriculation
providing automatic waiver of
university fees.
Student loan (average student loan
leaving debt $15,590 in 2005)
Student allowance (for under 25
allowance is parental income tested;
for 25+ is income tested)
Retirement
Age Benefit from 60 years (income
tested) Superannuation from 65
years (not income tested)
Superannuation from 65 years
(taxed at higher rate if receiving
other income)
Kiwi Saver (optional)
% of Population Aged
65 yrs or more 8.3% (1966) 12.3% (2006)
1.11 In 1968, young people’s lives were characterised by early formation of
independent nuclear families. There was a policy of full employment. There
was substantial assistance to families wishing to enter home ownership and
home ownership tended to be funded by a combination of government loans,
inheritance and capitalisation of the Family Benefit. Household debt was
largely limited to house purchase and credit options for other forms of
consumption were limited. The tax regime was strongly progressive and
complex.
2 Data drawn from Statistics New Zealand 2006 Census, Housing New Zealand Corporation and Work &
Income websites, New Zealand Official Yearbooks for 1968, 1970.
3 Saville-Smith, 2008a.

4
1.12 Dwellings were smaller, households were larger and health care and
education costs were largely funded by the state. Fewer young people
accessed tertiary education. Moreover, post-secondary school training was
typically waged and not funded by student debt. Trainee teachers, nurses and
other health ancillary staff, such as occupational therapists, and trade
apprentices were all paid and many were provided with low cost housing as
well. Low cost housing, including staying with relatives, a shortage of housing
stock, especially rental stock, contributed to young people entering home
ownership in expanding new housing suburbs in the late 1960s and 1970s.
1.13 Now, employment levels are driven more directly by the market. There is very
limited assistance associated with entry into home ownership. Levels of
personal debt are high and savings until very recently have been relatively
low by international standards. Housing affordability problems have been
acute in both the rental and the home ownership markets. While housing
prices have pulled back a little in the context of the global financial crisis,
access to credit is also being tightened.
1.14 The building industry is oriented towards larger houses in the middle and
higher end of the housing market.4 Household formation and child bearing is
delayed. A higher proportion of young people are in rental housing, despite
continued expressed aspirations to home ownership. Comparatively high
levels of debt are found among young people. Tertiary training is generally
supported by loans or grant payments.
1.15 Two further conditions have prompted concern about the housing demand of
older people between 2010 and 2050. Those are longer life expectancies and
the condition and configuration of New Zealand’s housing stock.
1.16 Older people in New Zealand are likely to be older for longer. Extended life
expectancies have profound, although not always straight forward,
implications for older people’s incomes and living standards and their levels of
health and disability. International research suggests that older people of the
future are likely to be healthier and less disabled longer than older people of
today and in the recent past. Nevertheless, it is agreed internationally that
ageing populations combined with increased survival for accident victims and
those with disabling conditions, will increase the prevalence of people in the
community with impaired mobility. The impacts on housing demand
associated with those changes could be profound, particularly because of the
condition and configuration of New Zealand’s housing stock.
1.17 By its very nature the typology of the housing stock changes slowly. Even in
the building boom of the last decade, only about 22,000 stock units were
annually added to the overall stock, which stands at about 1.4 million
dwellings. Those effects are inevitably long lasting. Figure 1.1 shows that
New Zealand has a substantial number of dwellings in excess of fifty years
old.5 The dwellings built in the 1970s, 1980s, 1990s and in the first decades
of the 21st century can be expected to dominate the stock between 2010 and
2050. This raises significant issues around the suitability and performance of
that stock and stock likely to be built in the near future for an ageing
population.
4 DPMC, 2008.
5 Ryan, 2008.

5
Figure 1.1: New Zealand Housing Stock Age and Configuration
0
50000
100000
150000
200000
250000
Pre
1880
1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Number
Decade starting
Housing stock by Decade
Rental purpose blt
Home + inc o me
Units single/multi st
Dwell detach/semi
Conv erted hse
Source: QVNZ
1.18 The externalities associated with unmet housing need combined with the
persistent inter-generational effects of housing demand mean that policy and
planning require a long term horizon. It also requires, however, that housing
demand in the short and medium terms is not neglected. CHRANZ has
recognised this in setting the focus of this research not simply on 2050 but on
the period from 2010 to 2050.
1.19 The importance of meeting the changing housing needs of older people now
and in the future is recognised in key national strategies: The National
Housing Strategy; the Positive Ageing Strategy and associated Action Plans;
and the NZ Disability Strategy. Those strategies recognise the external costs
if older people’s housing needs are unmet, and, conversely, the wider public
as well as individual and familial benefits of housing that is accessible,
adaptable and performs well for older people.
1.20 It is also increasingly being recognised at the policy level that the housing
choices of older people can have significant inter-generational effects. In the
past, the assets that older people built up in their dwellings have been passed
to younger generations. Those assets have played an important part in
improving the life chances of families across generations, including the ability
of those younger generations to enter home ownership.6 In addition, some
commentators have argued that housing assets themselves will become
devalued as the bulge of baby boomers ages, downsizes and dies leaving a
housing glut and the collapse of house prices.7
Research Objectives and Questions
1.21 In setting its objectives for this research CHRANZ has identified a sizeable list
of issues and questions that it wishes to explore through this research. In
essence, those can be distilled into four key aspects of older people’s housing
experiences and demand patterns. They are:
• Patterns of dwelling consumption both in relation to housing types and the
tenure conditions of housing access.
6 Pearson and Thorns, 1983.
7 Sichelman, 2008; Myers and Ryu, 2007.

6
• Patterns of investment into housing assets (both as primary homes and
secondary dwellings or investment rentals) and the use or subsequent
liquidation of those assets.
• The use value of dwellings as homes in the context of older people’s:
• own changing aspirations for their lifestyles;
• perceived responsibilities and obligations to their children and
grandchildren, particularly where older people and their housing acts
as a ‘stable node’ for their wider kin group and extended families;
• aspirations regarding legacies and inter-generational transfer of
property; and
• liabilities for the costs of health care and services.
• Housing demand in the context of increased diversity among the
population of older people including:
• increased socio-economic diversity and resource inequality;
• life stage diversity with differences potentially becoming more defined
between ‘young older people’, ‘middle older people’ and ‘old older
people’;
• more variation in the older population in relation to disability
conditions, type and levels of disability, and age of disability on-set ;
• ethnic diversity among older people with the pronounced ageing of the
Maori, Pacific and Asian population structures; and
• locality determined access to services.

7
PART 1: OLDER PEOPLE’S HOUSING SCENARIOS

8
2. BUILDING HOUSING SCENARIOS
2.1 This section provides an overview of scenario approaches, their use and
limitations. It then presents a brief overview of the way in which scenarios
have been used internationally to explore housing futures. Finally, this section
sets out the research and analytic activities that were used to build the three
older people’s housing futures scenarios presented in Section 4 of this report.
Scenarios: Purpose, Use, and Effectiveness
2.2 Scenarios articulate “many futures”.8 In doing so they present a challenge to
existing perspectives, policies and plans which are often based on some
taken for granted assumptions about how the world works, what is possible
and what is inevitable. The purpose of scenarios is to allow stakeholders,
decision-makers and advisers to consider options and possibilities that might
not otherwise be considered. Scenarios allow people to go outside usual
operational boundaries, and reflect on old problems in new ways.
2.3 Scenarios are not intended as predictions of the future. They are vehicles to
investigate current issues and provide insights that will inform policy and
practice decisions.
Scenarios vs Forecasts
2.4 Scenarios are not forecasts or projections although they may use forecasts
and projections in defining key elements of social, economic or demographic
change. Using scenarios provides a way around some of the problems
associated with forecasting, particularly the problems that arise from being
embedded in quantitative trend data.
2.5 Forecasts, because they tend to be based on forward projections of
measured trends, have difficulties in accommodating long-term changes in
cultural norms, social, economic and political processes, and changes in
institutional practices and policy settings. Forecasts effectively reduce the
complexity of social and economic life to a few, measured parameters. In
addition, because forecasts project into the future from past trends, forecasts
have difficulty in dealing with the impacts of ‘shocks’ or crises.
2.6 By definition scenarios are concerned with understanding in the context of
uncertainty and change. They build a picture of a world which incorporates a
wide variety of information. Scenarios incorporate data around quantitatively
measured trends. But they also incorporate information, knowledge and
speculation around social and economic practices and institutional
behaviours, some of which can be measured independently and some of
which are constructed out of the experience and perspectives of stakeholders
and social and economic commentators.
8 Wilkinson, 2009.

9
Strengths and Weaknesses of Scenarios
2.7 That scenarios are, in a sense, a product of the imagination underpins both
their strengths and their weaknesses.
2.8 The strengths of using scenarios as a tool in policy development and planning
are that they can help to understand futures that are expected to be
characterised by complexity, turbulence, uncertainty and ambiguity. They
encourage re-thinking, adaptability and attention to challenges. Constructive
disagreement can be included, through development of multiple scenarios.
Scenarios also allow consideration of alternatives, through multiple stories
that are plausible, possible and probable.9
2.9 Scenario building is by no means unproblematic.10 Some of the key problems
that have emerged in the application of various approaches to scenario
building over the years are:
• The tendency for the process by which scenarios are created to become
an end in itself, rather than a means by which substantive issues in a
sector such as housing can be identified and illuminated.
• The potential for scenarios to become detached from the actual
possibilities and dynamics that drive social and economic life and,
consequently, become unrealistic and irrelevant.
• The potential for scenario methods to reduce diversity and fail to
recognise divergent views. This includes the problem of ‘group think’
where group dynamics homogenizes perspectives to the point that
participants can no longer identify alternative pathways.
• The risk of generating highly abstract or generalised readings of the future
which fail to provide any guidance to policy and sector responses.
• The risk of not adequately distinguishing aspirations or desired futures
from expected futures.
Our Method for Building Scenarios
2.10 A number of housing scenarios have already been generated both here and
overseas. The main themes of those scenarios are summarised in Appendix
A and demonstrate the diversity of scenario building approaches. The three
scenarios presented in this report have been constructed out of four data
collection and analytic activities. Those are:
Component 1: Describing the critical socio-demographic and housing
trends that are likely to impact on older people’s housing
needs over 2010-2050.
Component 2: Modelling possible impacts on older people’s housing
demand of savings and consumption behaviour in the
context of different policy and market conditions by
applying an equilibrium lifecycle model.
Component 3: Reviewing domestic and international research, evaluative
and policy literature on key housing issues affecting older
people’s housing futures.
Component 4: Workshops with key populations and stakeholders.
9 Wilkinson, 2009.
10 A review of some of those issues in relation to identifying housing futures is found in Burke, Slaughter
and Voros, 2004.

10
Component 1: Critical Socio-demographic and Housing Trends
2.11 Key demographic, socio-institutional and housing sector trends have been
analysed using a variety of data sources. For socio-demographic trends data
has been drawn from the New Zealand census, demographic projections
undertaken by Statistics New Zealand, Reserve Bank statistics on wealth,
debt and savings. Data relating to travel and transport modes and various
studies around household consumption patterns have also been used.
2.12 Housing trends in relation to stock growth, location, dwelling size, typology
and occupancy were explored. The primary aim was to summarise the
supply-side context of older people’s housing demand. Census data, HEEP
data, house condition data and data generated by CRESA’s FRST funded
programme on older people’s repairs and maintenance needs and practices
were analysed.11 Consideration was given to the impact of changing stock
characteristics on issues around the affordability of housing access for older
people, the resource consumption implications and operating affordability for
older people, and the implications of stock location for meeting older people’s
on-going community integration, care and service needs.
Component 2: Life Cycle Equilibrium Modelling
2.13 This modelling deals with the dynamics of housing demand amongst persons
over 65 years in New Zealand in the next four decades. The focus is on the:
• income, consumption, saving, health, and housing demand choices made
over the entire lifespan of those who will be over 65 years during this
period, including the choices made before they turn 65 years;
• quantity of different types of houses in New Zealand; and
• income, consumption, saving, and housing demand choices made over
the entire lifespan of those who will be under 65 years during this period.
2.14 This component of the research used the Coleman version of the Modigliani-
Brumberg equilibrium lifecycle model which examines how the interaction of
housing demand by people of different ages determines house prices in
equilibrium, when they consciously save for retirement and when they choose
different housing patterns throughout their life.12 The model was extended to
analyse in a stylised way the likely effect on housing demand following: an
increase in average life expectancy; different rates of economic growth;
different mixes of retirement saving and pension policy, including a possible
increase in the age of retirement; changes in the ease with which retired
people can release equity in their houses; changes in health expenditure in
retirement; changes in the cost of housing construction and house price;
declines in interest rates towards the levels prevailing in other countries; and,
changes in the size and timing of bequests.
Component 3: Review of International Housing Responses to Ageing Societies
2.15 This component of the research consisted of a selected review of
international and New Zealand research that illuminates patterns of housing
demand among older people, the impacts of inadequate housing on older
people, and inter-generational issues associated with older people’s housing
11 See www.goodhomes.co.nz
12 Coleman, 2006; Coleman, 2007; Modigliani and Brumberg, 1954; Modigliani and Brumberg, 1980.

11
demand. The review of international research was mainly focused on the
experience in the United Kingdom, Australia and North America.
Component 4: Housing Futures Workshops
2.16 This component involved structured workshops that engaged housing
consumers and stakeholders in the housing sector and other sectors
responding to the needs of older people.
Housing Consumer Workshops
2.17 The intention was to conduct six housing consumer workshops with 10-12
participants in each. The workshops were designed to: (a) explore the
preoccupations and imperatives of age cohorts that will become 65 years or
older in the period 2010-2050, and (b) capture the diverse housing
experiences and expectations of population groups in New Zealand. Housing
consumer workshops were proposed for:
• People who are currently 65-70 years.
• People who are currently 50-55 years and will be approaching 65 years or
more in 2020.
• People who are currently 23-25 years and will be 65 years or more in
2050.
• Maori of mixed ages.
• Pacific people of mixed ages.
• Asian new settlers of mixed ages with residence in New Zealand of ten
years or less.
2.18 Implementation of the consumer workshops resulted in workshops and
interviews involving 79 people in Auckland, Wellington and Hutt Valley to
obtain as wide a participation as possible given the time and resources
available. They were as follows:
• 65-70 Age Group. Nine people participated in a workshop held in
Auckland on 10 March 2009. The workshop included people living in
owned, rented and supported accommodation. Their ethnic backgrounds
included NZ European, Indian, English and European.
• 50-55 Age Group. Ten people participated. One workshop and interviews
were held in late March/early April 2009 to access sufficient participants.
Those participating were all employed, and all owned their own homes.
They were either living with a partner, living alone or with children still
living at home. They included NZ European, Maori, English and
Australian.
• 23-25 Age Group. Six people participated in a workshop held in
Wellington on 11 March 2009. Participants included NZ European, Maori
and Pacific young people who were employed or fulltime tertiary students.
One had children. The workshop consisted of a mix of those renting,
home owners and living with parents.
• Workshops and interviews with 30 Asian new settlers in early March 2009.
Participants’ ages ranged from 30s-70s. Several methods were used to
access a range of new settlers and to encourage different cultural
perspectives to be expressed. Three workshops were held in Hutt Valley
on 7 and 8 March 2009 with members of the Chinese, Indian and Filipino
communities. In addition interviews with six Chinese people were held in
Wellington on 13 March. One interview was also conducted with an older
Indian resident of Wellington. People were contacted for the workshops

12
through the Hutt Ethnic Council, Hutt City Council, New Settlers Service
and Wellington City Council.
• The Maori workshop was held on 18 March 2009 in Wellington. Fourteen
people attended the workshop, hosted by Ara Tahi, the inter-iwi
representative group of the Wellington Region, which includes the Kapiti
Coast, Wellington, Hutt Valley and Wairarapa. The region’s seven iwi
authorities were represented, as well as others involved in Maori housing.
Participants’ ages ranged from 30s-80s.
• The Pacific workshop was held on 9 March 2009 in Manurewa. Ten
people attended the workshop hosted by the Manukau City Council. The
workshop consisted of community leaders from South Auckland Pacific
communities including from the Samoan, Niuean, Cook Island and
Tongan communities. Their ages ranged from 19 years to 60 years. They
included a mix of home owners and renters.
Sector Workshops
2.19 This component involved structured workshops that engaged housing
stakeholders in the housing sector and other sectors responding to the needs
of older people.
2.20 For the sector workshop, it was intended to run four sector workshops, with
up to 20 participants in each, depending on the range of expertise needed.
The workshops were designed to engage critical stakeholders in the housing
sector or at the interface between the housing sector and older people’s
health services, social services and policy. Those workshops focused on
issues, barriers, risks and opportunities in responding to the housing needs of
people as they age.
2.21 The proposed workshops were as follows.
• Policy workshop involving central government and local government
officials involved in housing policy and officials involved in older people’s
policy and planning.
• Older people’s services workshop involving health and service
professionals and agencies involved in provision for older people’s well-
being.
• Residential building industry workshop involving developers, builders,
designers, planners and regulators in the building industry.
• Housing providers workshop involving private sector, community sector
and local and central government sector providers of housing and/or
housing finance.
2.22 All these workshops were implemented in Wellington as planned. They
comprised:
• The policy workshop, held on 13 March 2009, comprised six people from
the Ministry of Health, Energy Efficiency Conservation Authority, Office of
Ethnic Affairs, Te Puni Kokiri and Kapiti Coast District Council.
• The older people’s services workshop was held on 26 March 2009. Six
people attended from Grey Power, Presbyterian Support Otago, NZ
Council of Christian Social Services, Enable New Zealand, Salvation Army
and Wellington City Council.
• Seven people attended the residential building industry workshop held on
12 March 2009. Participants included the Lifetime Design Council, Master

13
Builders Federation, Summerset Group Limited, Beacon Pathway,
Department of Building and Housing, and Energy Options.
• The housing providers workshop was held on 11 March 2009. Eight
people attended from Housing New Zealand Corporation, Retirement
Villages Association, Community Housing Aotearoa, New Zealand
Bankers Association, Christchurch City Council, Wellington City Council
and Local Government New Zealand.
2.23 Each workshop was conducted using a structured, facilitated process in which
workshop participants were asked to:
• develop for 2010, 2020 and 2050 two types of futures for older people’s
housing:
• aspirational futures; and,
• expected futures.
• identify the conditions that are likely to generate or inhibit those futures
• identify the impacts of those futures for:
• different population groups; and,
• social, economic and environmental well-being.
2.24 Emphasis was placed on capturing areas in which participants within each of
the workshops:
• articulate common or divergent futures;
• identify similar or dissimilar conditions and dynamics around those futures;
and,
• have convergent or divergent perspectives on the impacts of those futures
2.25 Preliminary analysis undertaken in Components 1-3 were used as inputs into
the workshops in Component 4. Workshop participants were provided with a
powerpoint presentation and paper outlining demographics trends and
projections and modelling analysis. Draft workshop feedback reports were
developed for each of the workshops and finalised through an e-mail based
iteration with workshop participants.

14
3. SCENARIO BASELINE & ASSUMPTIONS
3.1 Our futures are embedded in our past, but the same conditions can give rise
to different futures depending on how key stakeholders respond. In this
section, we set out the key baseline conditions and assumptions underpinning
the three different scenarios for housing for older people’s housing futures
described in the next section.13
Older People, Housing and Services: The Current Baseline
3.2 All futures are embedded in a current baseline. All scenarios assume that the
baseline or the start point is the same. It is beyond the scope of this report to
provide a stock take or evaluation of older people’s current housing and
services or current policy settings across the sectors that relate to housing.
However, some of the features of New Zealand housing and New Zealand’s
services to older people as they have been identified through the research
and workshop processes are set out below.
New Zealand Housing, the Housing Stock and Older People
3.3 Most older people in New Zealand live in private dwellings. Most of those
dwellings are detached or semi-detached dwellings. Dwellings within
retirement village settings are a growing but still small part of the housing
market. The community housing sector in New Zealand is beginning to focus
on older people and the provision of independent living units. The extent of
that provision and its national distribution is largely unknown and is clearly
uneven.
3.4 Only small proportions of older people live in non-private dwellings such as
rest homes or hospitals. Much of the small local authority housing stock in
New Zealand is targeted to older people. Most older people live in owner
occupied dwellings, although older people are one of the groups for which
private landlords have a preference.
3.5 Although around 45 percent of older people report a disability and are likely to
have compromised mobility because of it, the modified housing stock is under
supplied in New Zealand. Some estimates place the under-supply for disabled
people as being between 14,000 and 27,000 stock units in 2005.
3.6 Much of New Zealand’s existing housing stock performs poorly thermally with
the result that New Zealand has had a pattern of excess winter mortality.
Older people are particularly vulnerable to cold temperatures. Recent
research shows that substantial proportions of older people find it difficult to
heat their homes adequately. At the same time, older people persistently
overestimate the performance of their homes and under-invest in repairs and
maintenance. Beacon Pathway has been assessing ways in which retrofitting
existing homes might be most effectively accomplished.
13 The data and analysis from which the baseline commentary has been developed and material from
which the assumptions around conditions in 2050 can be found in sections 5, 6, 7 and 8 in Part 2 of this
report.

15
3.7 Both older people themselves and younger people looking towards their
retirement overwhelmingly report wanting to stay in a home of their own in the
community. Problems of access to affordable housing (especially for owner
occupation) and problems of finding affordable and suitable housing for
retirement are reported by consumers and sector stakeholders. Newly built
housing, while typically providing better thermal performance, are also
typically significantly larger than desired, often function poorly in relation to
accessibility, and can have locational disadvantages.
3.8 There are emergent accreditation systems and/or assessment systems for
the new home sector. The Lifemark which is specifically related to lifetime
design, is promoted by the Lifetime Design Council. This is directly focused
on the needs of households across their life stages and to the needs of
disabled people. The Green Building Council, Beacon Pathway and Energy
Efficiency and Conservation Authority (EECA) are all involved in promoting
better resource and energy performance in new homes.
Services, Housing and Older People in New Zealand
3.9 Despite an Ageing in Place Strategy for older people, New Zealand has a
strongly segmented approach to older people’s policy and service delivery.
Housing assistance can be provided through a variety of channels, most of
which are not delivered with an older people’s focus.
3.10 Housing affordability assistance can be provided by way of the
Accommodation Supplement delivered through Work and Income within the
Ministry of Social Development. There are some discretionary benefits that
can also be provided for extraordinary housing-related assistance through the
income support system.
3.11 Additional assistance for housing retrofit can be provided by way of
community-based initiatives and partnerships funded variously by EECA,
some Energy Trusts, some District Health Boards, and some local authorities.
Housing retrofit initiatives are unevenly distributed throughout the country.
Housing retrofit assistance is also unevenly distributed among households.
There has also been some investment in Maori housing and rural housing
through Special Housing Areas and the rural housing programmes. Again
access to those programmes is both limited and uneven nationally.
3.12 Housing adaptations and modifications are a mix of national contracts and
local delivery. That system is poorly understood by users and commonly
criticised for inconsistency and problems with timeliness. There is no formal
mechanism and little informal process to promote co-ordination between
retrofit funding and adaptation/modification funding. Repairs and maintenance
support is not a priority through any funding stream and services are limited.
Both consumers and sector stakeholders recognise severe problems of co-
ordination and integration.
3.13 Cross sectoral integration where it exists tends to be between health and
social services. Where there are active attempts to co-ordinate between
social services, health and housing, these tend to be in the context of local

16
and often informal initiatives. Despite an increasing recognition of the impact
of poor housing on older people’s health and safety, housing need
assessment is not commonly employed in the context of health and
rehabilitation assessments for older people except in relation to adaptations
and modifications.
Key Assumptions in the 2050 Scenarios
3.14 In developing these scenarios a set of conditions have emerged around
demographics, key socio-economic trends, consumption patterns and housing
stock baselines that are assumed for all. There are also some variations
around the way in which the costs of an ageing society will be managed by
successive governments.
Demographic Conditions
3.15 The key demographic assumptions for 2050 are as follows:
• New Zealand’s population will increase to around 5.48 million.
• The number of households in New Zealand will increase from around 1.6
million to about 2.28 million.
• The median age will be 43.2 years.
• The old age dependency ratio will be 38.5 older people per 100 people.
• There will still be a substantial young age dependency ratio of 28.5 young
people per 100 population.
• New Zealand will have around 1.35 million people aged 65 years or more.
• New Zealand’s older people will be more ethnically diverse but
European/Pakeha will make up over 80 percent of older people.
• The age profile of older people will be older than currently with 24.5
percent of older people aged 85 years of more.
• Most older people will live in private dwellings, but population growth and
population ageing will see more than 50,000 older people in non-private
dwellings such as rest homes.
• All regions will be affected by population ageing with Auckland the only
region with a median age of less than 40 years.
Key Socio-Economic Conditions
3.16 The key socio-economic conditions for 2050 are:
• Older people’s participation in the labour force will be greater than
currently, but most older people will not be labour force participants.
• Older people not in the labour force will number about 1.2 million.
• Older people will be over-represented in low income households.
• Household net wealth will stabilise with stabilised house price and
attempts to manage household debt.
• The value of household financial assets will only marginally exceed the
value of household debt.
• Most household wealth will reside in home ownership.
• Ageing as a demographic process will have little impact on inheritance.
• Inherited wealth will continue to be concentrated among high income and
high wealth households.
• Household size will fall to around 2.3 people per dwelling.

17
• Older people will continue to be over-represented in one-person and two-
person households.
• Owner occupation will decline including owner occupation by older people.
• The numbers of households in rental dwellings with an older reference
person will be possibly over three times the current numbers.
• The numbers of households in rental dwellings with an older reference
person is assumed to be around 160,000 households.
• Around 607,500 older people will have disabilities that impair their
mobility.
• Around 325,000 older people will not have a licence to drive and will rely
on public transport and walking or will be transport dependent.
Housing Stock and Neighbourhood Characteristics
3.17 The key housing stock and neighbourhood assumptions for 2050 are:
• The housing stock will be around 2.4 million stock units.
• Around two thirds of the dwellings in 2050 will be existing dwellings.
• Most dwellings will be three or more bedrooms.
• There will be a strong supply side desire to build larger dwellings.
• Most people including older people will live in neighbourhoods that are
already built today.
• Older people will primarily reside in low and medium density
neighbourhoods in urban settlements.
Housing Demand Implications of an Ageing Society
3.18 Based on the modelling undertaken in the course of this research each
scenario is considered in the context of four variations of policy settings
around dealing with the expenses of an ageing society. Those are:
• Case 1: Government maintaining current pension value and taxing all
households to fund pensions with pensions reaching 5 percent of Gross
Domestic Product (GDP).
• Case 2: Government allows the value of pensions to fall and house prices
remain the same.
• Case 3: Housing supply does not meet increased population. There is an
elasticity of 1 percent for both high and low value dwellings and house
prices increase.
• Case 4: Housing is under supplied with associated house price increases.
High value house supply is less elastic than low value house supply.
3.19 It is assumed, however, that the major impacts on housing demand (as
opposed to housing need),14 particularly the age of entry into home ownership
and the rate at which the property ladder is ascended, will be, as it is now,
most strongly determined by: house prices; interest rates; prudential
requirements; and building costs.
14 Housing demand is a narrow economic term meaning the housing that individuals want AND are able
to get that housing through a legal transaction. Housing need is merely the housing that people want
whether they can access those housing needs or not. Meeting housing demand does not necessarily
involve fulfilling people’s housing needs.

18
4. OLDER PEOPLE’S HOUSING FUTURES – 2050
4.1 This section describes three scenarios generated out of the trend analysis,
workshops, international review and modelling. They are:
• Scenario 1: Business as Usual;
• Scenario 2: Integrated Response; and,
• Scenario 3: Fragmented Innovations.
4.2 After each of the scenarios is presented, the discussion turns to a
comparative analysis of the likely outcomes of those scenarios in relation to a
set of seven parameters. Those are older people’s:
• social integration;
• economic integration;
• standard of living;
• service provision;
• housing conditions,
• need and demand; and,
• health and safety.
4.3 Finally, the probability of each of these scenarios coming to fruition is
considered. Particular attention is given to the conditions that would
encourage step-wise change beyond the ‘Business as Usual’ Scenario.
Older People’s Housing Futures – Three Scenarios
4.4 The main features of the scenarios are as follows:
Scenario 1: Business as Usual: This scenario essentially allows for societal
ageing without significant additional actions or investments into responding to
that process. This is not to suggest that there will not be gradual change in
service delivery processes, or new initiatives and programmes. There is no
doubt that retrofit programmes will slowly evolve as they have in the past.
There will continue to be some market shifts, as there have been in the past
in housing. But there is no radical departure or innovation. Funding streams
related to older people’s housing remain fragmented across the current range
of sectors. The focus in services for older people will still be dominated by
health and, to a lesser extent, social services. Co-ordination between
housing, health and social services will not be any greater or less than
currently. The building industry and housing sectors will respond to housing
demand but not necessarily to older people’s housing needs. The profile of
the housing stock will remain largely supply driven with similar patterns of
larger dwellings and traditional design prevailing. The housing stock will have
a higher proportion of better performing dwellings because of performance
requirements set in place in the first decade of the 21st century. Industry and
public good investment will be limited and the industry will use similar
production chains as currently. Housing affordability instruments such as
home equity release and shared equity will be minimal, not well understood,
and not subject to strong protections. Older people’s tenure in the rental
market will be relatively insecure with continuing high churn of dwellings
between the rental and the owner occupied market. Thermal performance of
dwellings in the rental market will be poor as landlords show low take up of

19
retrofit assistance. New and existing neighbourhoods in urban settlements will
be largely dependent on private cars for connectivity.
Scenario 2: Integrated Response: This scenario makes a considerable shift
in the approach to housing in an ageing society. There is a reprioritisation of
housing for older people in the mix of older people’s services. Housing and
the built environment are seen as fundamental to older people remaining both
socially and economically active. Maintaining older people’s independence as
long as possible through the provision of enabling environments and services
will be determined as the best way to optimise funding investments. As a
consequence, there will be both central and local government initiatives to
promote life time design in both housing and neighbourhood design. This will
involve mandatory requirements on all new dwellings with or without public
investment to be built to lifetime design standards. Regional and local
government will assess plans for new and redeveloped neighbourhoods,
transport development plans and services, against a nationally agreed
checklist for age-friendly settlements. In urban settlements the choice of
transport mode will increase and residents in fewer neighbourhoods will
depend solely on private cars for connectivity to the rest of the city. Industry
and public good research monies will be directed to developing affordable, life
time housing, street and transport design and associated technologies.
Integrated funding streams for dwelling retrofit and dwelling modification will
be established using evidence-based and consistent assessment tools across
all sectors. Housing stock typologies will be diversified and neighbourhoods
will be functionally mixed with a variety of different densities. Both
neighbourhoods and dwellings will be designed to encourage
intergenerational living. The needs of Maori, rural dwellers, Pacific peoples
and new settlers will be better integrated into dwelling and neighbourhood
design. Housing affordability instruments including shared ownership and
equity release will be well-established and subject to protective regulation.
Tenure diversification will be accompanied by a quality rental market
providing older people with secure tenure, well-performing and accessible
dwellings.
Scenario 3: Fragmented Innovations: This scenario involves a significant
innovation effort in areas in which there is currently emergent innovation.
There is, however, no coherent framework around responding to an ageing
society. As a consequence, housing innovation is most pronounced where
there is demand in an economic sense. That is, where people want and are
able to purchase innovative goods, services and housing. Initiatives in relation
to Green Building and Lifetime Design will drive considerable innovation in the
premium end of the housing market. Those innovations will be accompanied
by premium residential developments being developed according to life time
neighbourhood design and neighbourhood sustainability principles. Some iwi
and community organisations will develop and implement innovative housing
options for inter-generational and kaumatua housing. The use of master
planning in greenfield and brownfield sites will be prominent at the premium
end of the market. However, those developments still struggle with
connectivity because regional and local planning and funding are not shaped
within a framework of age-friendly cities. There will be a diversification of
housing typologies, but the dominant housing form will remain detached
dwellings and housing sizes will stabilise but will average around 220 m2. The
problem for older people of finding dwellings to which they can downsize to

20
release equity and to reduce housing burdens will remain because of an
under supply of smaller, quality dwellings. Non-owner occupier tenures have
increased. These include rights to occupy in the context of retirement villages
as well as shared ownership and co-housing arrangements. However the
prevalence of those alternatives will be low. The use of financial instruments
such as home equity release be available. Protections around those
instruments will be established. Those protections will have been developed
in response to the financial crisis experienced in 2008 and 2009 and the
successive failure of finance companies rather than because of a coherent
approach to older people’s needs. Older people’s tenure in the rental market
will be relatively insecure with continuing high churn of dwellings between the
rental and the owner occupied market. Integrated funding streams for dwelling
retrofit and dwelling modification will remain separate and a fragmented
patchwork of services and housing assistance will prevail.
Comparative Potential Outcomes of Older People’s Housing Futures
4.5 In the context of this report, scenarios are being used as a device to think
about how different housing futures might determine outcomes for older
people. In New Zealand, as well as internationally, there is a commitment to
older people ageing in place. That is, ageing in the communities with which
they are attached and ageing actively rather than moving unnecessarily into
high dependence, institutionalised living.
4.6 That commitment to ‘ageing in place’ is partly because there is a strong
desire among older people themselves to stay in their communities and,
indeed, within their existing homes. It is partly because there is a gathering
body of evidence that service provision within institutional settings for older
people is at least as costly as enabling service provision within communities.
It is partly, also, because with increasing old age dependency ratios, there is
an imperative to keep older people socially and/or economically productive.
4.7 It is also being recognised that ‘success’ and cost-effectiveness of ageing in
place is closely associated with housing. Independence and activity are
influenced by the extent to which the housing in which older people live: is
enabling or disabling; promotes or compromises health and safety; connects
or isolates; and, optimises living standards or is a burden on constrained
incomes. In short, housing futures for older people matter because they have
so many other impacts on older people, their families and the whole of our
society. In 2050, when almost a quarter of our population is likely to be aged
65 years or older, the impacts on wider society of the conditions in which
older people live will not be able to be ignored.
4.8 Infobox 4.1 sets out some of the potential outcomes of the Housing Futures
Scenarios outlined above. Like the scenarios themselves, the identification of
outcomes are not predictions. They are, however, embedded in current
understandings, experience and research into the interaction between
housing and older people’s wellbeing. Those parameters are:
• Housing conditions – That is, the security, performance, affordability and
functionality of dwellings in neighbourhood settings.
• Housing need – That is, the extent to which housing supply meets the
range of older people’s housing needs.

21
• Housing demand – That is, the implications of ageing for housing demand.
• Social integration – That is, the extent to which older people can maintain
active social, familial and civic interactions.
• Economic integration – That is, the extent to which older people can
extend their productive lives through labour force participation, voluntary
work and unpaid work in the home.
• Service coverage – That is, the impacts on social and health services.
• Health and safety – That is, the impacts on older people’s health and their
exposure to disabling accidents.
Infobox 4.1: Potential Outcomes for Older People’s Housing Futures Scenarios
Outcome
Parameters
Business as Usual Integrated Response Fragmented Innovation
Housing
Conditions,
Need and
Demand
• Around 80,000 older
renter households
shift house on
average every six
years because of
rental tenure
insecurity.
• Around 10,000 older
rental households will
be on waiting lists of
local authority or
community sector
social housing.
• Around 22% of
dwellings rented by
households with an
older renter reference
person will be
uninsulated.
• Prevailing average
house sizes make new
housing unaffordable.
• Under-supply of
smaller dwellings and
the prices for smaller
dwellings makes
down-sizing and
equity release difficult.
• Modified houses will
be undersupplied by
40,000-65,000 units.
• Inconsistent provision
of assistance for home
modifications and
assistive technologies.
• Continued
misalignment between
social, health and
housing assistance.
• Continued under
investment in repairs
and maintenance by
older people starts to
have a negative trickle
down effect on overall
housing quality.
• Rental market is
diversified by type,
dwelling and landlord.
• Reduction in exposure
of older renter
households to rental
market churn.
• Increased social
housing provision by
the community sector.
• Local authority
housing performance
and functionality
improved.
• Lower proportions of
households with an
older renter reference
person will be living in
poorly uninsulated
dwellings.
• Widespread adoption
of life time design in
all housing market
segments of the
owner occupied stock.
• Increased take-up of
retrofit assistance by
older renter and older
owner occupier
households.
• Better integration
between social, health
and housing services.
• Consistent
assessment of
housing service
needs.
• Development of
nationally consistent
housing services.
• Expansion of housing
services to include:
rapid repairs and
maintenance and
housing advisory
services.
• Significant proportion
older renter households
shift house on average
every six years
because rental tenure
insecurity.
• Around 10,000 older
rental households will
be on waiting lists of
local authority or
community sector social
housing.
• Around 22% of
dwellings rented by
households with an
older renter reference
person will be
uninsulated.
• Adoption of life time
design for new
dwellings in the
premium housing
segment and retirement
villages.
• Targeting of wealthier
older people to release
equity.
• Targeting of retrofit and
assistive technologies
to wealthier older
households.
• Increased housing
polarisation among
older people.
• Limited development of
inter-generational
housing developments.
• Increased focus on
developing non-mix
residential
developments for older
people.
• Continued
misalignment between
social, health and
housing assistance.

22
Social
Integration
Poor connectivity,
isolation and participation
generated by
inaccessible housing and
neighbourhoods that are
not age friendly.
Optimise connectivity and
participation through
visitable homes and
neighbourhoods and
cities that are age
friendly.
Polarisation of older
people. Overall,
connectivity and
participation limited.
Economic
Integration
Not optimised due to poor
connectivity, isolation and
participation generated by
inaccessible housing and
neighbourhoods that are
not age friendly.
Optimised through
maintaining connectivity
with places of
employment.
Polarisation between older
people because of
differential settlement
connectivity. Tendency for
older people in retirement
villages and other
specialised housing to exit
from economic activity.
Health/Social
Services
Coverage
Increased pressure for
enabling services in
home-based settings as
the mal-adaptation of
dwellings make
functionality difficult and
older people become
isolated in under serviced
and poorly connected
neighbourhoods.
Inability of social and
health sector and older
people and families to
cope with these demands
moves older people into
higher dependency
arrangements.
Although overall costs are
higher and benefits are
lower than other
alternatives, limited
funding relative to
expanding needs mean
there is less funding
available to develop
alternatives.
Reduced pressure for
enabling services in
home-based settings as
dwellings are well
adapted and
improvements in
functionality are easily
made.
Neighbourhood and city
connectivity encourages
older people to be able to
effectively access health
and other services.
Forward-loaded funding
has allowed new services
to be developed that
reduce unit costs and
improve value for money.
Pressure for enabling
services in home-based
settings as the mal-
adaptation of dwellings
makes functionality difficult
and older people become
isolated in under serviced
and poorly connected
neighbourhoods. Impacts
are felt differentially by
older people with
households with histories
of low incomes and low
wealth unable to take-up
improved housing
opportunities and
neighbourhoods. Inability
of social and health sector
and older people and
families to cope with these
demands moves
vulnerable older people
into higher dependency
arrangements. Overall
costs are higher and
benefits are lower than
other alternatives, limited
funding relative to
expanding needs mean
there is less funding
available to develop
alternatives.
Health &
Safety
Continued excess winter
mortality. The proportion
and number of disabling
accidents among older
people in the home
increases.
Reduction in excess
winter mortality and cold
associated health
problems. The proportion
of disabling accidents
among older people in
the home is reduced.
Continued excess winter
mortality but concentrated
particularly among older
households with histories
of low incomes and low
wealth unable to take-up
improved housing
opportunities. Home-
based accidents also
become concentrated
among vulnerable
populations of older people
– Maori, Pacific peoples
and some Asian ethnic
groups.

23
Probabilities of Scenario Fruition
4.9 The issue that New Zealand faces with its ageing society is not whether there
will be change and whether that change will impact on the housing futures of
older people. The problem will be whether that change will be responded to in
ways that optimise outcomes for older people and New Zealand as a whole.
4.10 The scenarios set out in this report can be arranged along a continuum of
relatively poor outcomes to relative good outcomes. The Business as Usual
Scenario is at the poor end of the continuum and the Integrated Response is
at the optimised end of that continuum. This is not a continuum of no change
to change. The Business as Usual Scenario is not a ‘no change’ scenario. It is
a scenario in which change will undoubtedly occur but in a way which simply
emerges out of: incremental adjustments in taste; fragments of innovation
scattered across various sectors; and, out of demographic drivers which are
effectively the unintended consequences of choices made by individuals and
societal norms of generations past. Change is, thus, an inherent part of this
scenario and the two other scenarios.
4.11 What the Business as Usual scenario does not involve is purposeful change.
It does not involve the governmental, private and community sectors in
changing the way in which things are done specifically to meet the challenges
for an ageing society. By way of contrast, both the Integrated Response
Scenario and the Fragmented Innovation scenario involve purposeful change
in response to an ageing society. The Integrated Response Scenario requires
sophisticated change actions, processes, products and investments which
involve public, private and community organisations. It would require a cross-
sectoral approach re-constructing the relationships between health, housing,
social services, the energy sector, the building industry, and settlement
planning. The Fragmented Innovation Scenario is less demanding of
purposeful change in so far as the alignment between different sectors and
the rate of change in different sectors is less critical. The Fragmented
Innovation allows for change to be generated out of a single sector or even
single organisational initiatives.
4.12 Notwithstanding that all the scenarios are, by definition, imaginative
possibilities rather than predictions, the likelihood of one or other scenario
coming to fruition can be assessed. Those probabilities relate to the:
• nature of the change required to meet generate the scenario;
• extent to which conditions prompting change prevail; and
• investment required to generate change.
4.13 Figure 4.1 and Figure 4.2 graphically present the probabilities of each of the
scenarios being realised in the future. Figure 4.1 shows that Scenario 1, the
Business as Usual Scenario, despite the negative outcomes associated with
it, is most likely to emerge because it requires little innovation or re-
engineering of existing products, processes or systems and it makes few
demands for cross-sectoral action or co-ordination.

24
Requirement for Cross-
Sectoral Action
Requirement
for Process,
Product, Systems
Innovation
Medium Change
Probability
Quadrant
Medium Change
Probability
Quadrant
Low Change
Probability
Quadrant
Low
Low
High
High
High Change
Probability
Quadrant
∗ Sc.1: Business as Usual
∗ Sc.3: Fragmented
Innovations
∗ Sc.2: Integrated
Response
Figure 4.1: Probabilities of Scenario Fruition: Cross-Sectoral Action and Innovation
Parameters
4.14 By way of contrast, Scenario 3, the Fragmented Innovation Scenario, has a
medium probability of emerging. That scenario involves high levels of
innovation but that innovation is not contingent on sector wide action or co-
ordination. Scenario 2, however, has a low probability because an integrated
response requires both high levels of cross-sectoral action as well as product,
process and systems innovation.
4.15 If Scenario 2, the Integrated Response Scenario is the future for older
people’s housing that New Zealand sees as desirable, very active leadership
in all the relevant sectors as well as an active commitment to and investment
in innovation and change will be required, It will not emerge organically from
current dynamics.
4.16 Figure 4.2 provides another way of considering the relative probabilities of
any of one of the three futures scenarios emerging by 2050. Figure 4.2 is
based on two assumptions. The first assumption is that stakeholders tend to
act if they perceive an immediate return, benefit or saving. The second
assumption is that stakeholders are more likely to act if the investment
needed to make change is not heavily front-loaded. That is, that the costs of
change can be spread over the period of change or even beyond the actual
transition period.
4.17 If those assumptions are accepted, then, again, Scenario 1, the Business as
Usual Scenario, must be considered the most likely to emerge in the future
unless there is active pursuit of an alternative. The Business as Usual
Scenario does not require a radical shift in resource allocation and while it
could be argued that the direct and indirect costs of staying with the current
regime may be high in the future, the other scenarios present some degree of
immediate investment to realise what some may consider as distant and
possibly uncertain savings or returns (Figure 4.2).

25
Figure 4.2: Probabilities of Scenario Fruition: Timing of Expenditure and Return on
Investment Parameters
Optimising Older People’s 2050 Housing Future
4.18 This raises the question of what purposeful actions could increase the
probabilities of a future such as depicted in Scenario 2, the Integrated
Response Scenario, coming to fruition rather than New Zealand meandering
its way towards a Scenario 1 Business as Usual type future?
4.19 Typically purposeful change is generated by a series of inter-connected
conditions. They are:
• Active and cross-sectoral leadership.
• Recognition of shared costs of not acting.
• Recognition of market, personal and societal opportunities in the change
process.
• Development and adoption of tools and mechanisms to promote,
incentivise and put change into practice.
4.20 Generating those conditions is not straight-forward, but as the review of
international responses in Part 2 of this report shows there are ways of
developing the capacity to meet the challenge of housing in an ageing
society. The platforms for that response are:
• Develop and use the evidential base (including overseas evidence)
around the value for money of both:
• current policy and programme settings, and
• alternative policy setting, programmes and initiatives.
Low Front-loaded
Ex
p
enditure
Medium Change
Probability
Quadrant
Medium Change
Probability
Quadrant
Low Change
Probability
Quadrant
Immediate
Return
Delayed
Return
High Front-loaded
Expenditure
High Change
Probability
Quadrant
∗ Sc.1: Business as Usual
∗
Sc.2: Integrated
Response
∗
Sc.3: Fragmented
Innovations

26
• Actively engage government, private sector, community sector, and older
people and their families in identifying opportunities to improve local level
responses to housing needs.
• Rationalise funding streams directed to housing related services to reduce
confusion, compliance and transaction costs and to optimise the effective
use of investment.
• Implement formal mechanisms to increase cross-sectoral integration
around housing and services for older people including:
• Developing and adopting impact assessment, needs assessment and
performance assessment tools across sectors that impact on the
housing and well-being futures of older people.
• Joint contracting and commissioning of older people’s services.
• A comprehensive range of housing and service solutions which can be
tailored to need through robust information and advice services.
• Implement a two-pronged strategy to improve the diversity, affordability,
performance and functionality of both new stock and existing stock.

27
PART 2: SCENARIO INPUTS

28
5. AGEING NEW ZEALAND: PEOPLE & HOUSING
5.1 The scenarios presented in Part 1 of this report and the pre-conditions and
baselines that underpin them have been informed by four activities. First, an
identification and analysis of some key demographic, socio-economic and
housing data. Second, theoretical modelling of the impacts of an ageing
population on the overall shape of housing demand by 2050. Third, a series
of workshops with consumers of housing and people involved in housing
related sectors. Finally, a review of international responses to the challenge of
older people’s housing in the context of an ageing society.
5.2 This section presents data around the trends and societal characteristics
identified as crucial to building realistic, albeit imaginative, future scenarios.
Those trends and societal characteristics fall into three categories. They are:
• demographic data and projections;
• socio-economic trends; and
• housing stock characteristics.
Demographic Projections1
5.3 New Zealand’s population has been ageing as the baby-boomers age. The
impact on New Zealand society of that bulge of baby-boomers was first felt in
the demand for housing, maternity services and schools experienced in the
1960s to 1970s. Those cohorts are now going to have needs in the future to
which New Zealand as a whole will have to respond.
5.4 An ageing population structure is not unique to New Zealand. Section 8 of this
report sets out the way in which other countries are ageing and their response
to the challenge of those ageing populations. A number of countries overseas
have ageing structures similar to New Zealand including the demographic
complexity arising from having ethnic populations that, while also ageing,
have younger population structures.
5.5 In relation to New Zealand’s ageing population three dynamics should be kept
in mind:
• Firstly, the New Zealand population is complex because of the age
profiles of Maori, Pacific peoples, and, to a lesser extent, Asian peoples.
This is tied to ethnic differences in fertility and mortality (especially for
Maori and Pacific peoples) and migration (especially for Asian peoples
and Pacific peoples).2
• Second, New Zealand’s population increase has been driven off natural
increase. That is, births exceeding deaths. Statistics New Zealand
projections suggest that natural increase will decline with deaths
exceeding births from about 2040. This will be associated with slowing
population growth.
• Third, despite the ageing of the population and the decline of natural
increase, New Zealand’s population is still projected to increase over the
1 Most projections presented here are Statistics New Zealand’s Series 5 projections which are based on
a middle scenario of fertility and mortality. See the Glossary for further specification.
2 Projections of aged dependency among different ethnic populations are complicated by the strong
tendency in New Zealand for individuals, families and households to have multiple ethnic affiliations and
identities.

29
next forty years. This places New Zealand in a quite different situation
from countries which are facing falling populations. New Zealand’s
population is projected to increase from 4.18 million in 2006 to 5.48 million
in 2051.3
Larger Numbers of Older People Who Are More Ethnically Diverse
5.6 New Zealand had about half a million people aged 65 years or older in 2005.
It can expect to have 1.35 million older people by 2051.4
5.7 The greatest expansion in older people’s numbers will be when the baby-
boomers who were born in the 1950s and 1960s are 65 years and older. This
will be from 2020 and stretch through the 2030s. This ageing effect will be
emphasised after that period by the decline in births relative to deaths.
5.8 Statistics New Zealand has generated population projections for four
categories of the population: European; Maori; Asian; and, Pacific but only
until 2026. This reflects the difficulties and complexities of projections of
subsets of the national population. By 2026, the 65 years and older
populations of those ethnic categories are projected to be:
• European – 784,400;
• Maori – 70,900;
• Pacific – 32,700;
• Asian – 90,900.5
5.9 Those projections suggest that older people in New Zealand will be more
diverse ethnically. Although European ethnicities will dominate the cohort of
older people in 2021, it is projected to fall from 92 percent in 2001 to 86
percent in 2021.
Increased Median Age
5.10 In 1971, the median age in New Zealand was 26 years. By 2021, it is
projected that the median age will be 38.8 years and by 2051 it will be 43.2
years.6
Proportions of Older People and the Dependency Ratio
5.11 In the 1960s around 8 percent of New Zealand’s population was aged 65
years or more. By 2050 that group will make up 23 percent of the population.
5.12 The growing proportion of older people in the population is associated with
shifts in New Zealand’s dependency ratio. Dependency ratios are a crude
measure of the number of people that might be in the ‘non-working’ age
groups relative to the ‘working-age’ population.
5.13 New Zealand’s total dependency ratio is projected to be 66.9 per 100 people
in 2050.
3 Statistics New Zealand Projected Population Characteristics, 2006 (base) – 2061. Series 5.
4 Statistics New Zealand Projected Population Characteristics, 2006 (base) – 2061. Series 5.
5 Statistics New Zealand Projected Population Characteristics, 2006 (base) – 2026. Series 6
6 Statistics New Zealand Projected Population Characteristics, 2006 (base) – 2061. Series 5.

30
5.14 This is lower than the total dependency ratio experienced in New Zealand in
the mid-twentieth century which peaked at 71 people per 100. However, that
peak was because of young age dependency. In 2050, the dependency ratio
will be driven by old age dependency which is projected to be 38.5 per 100
people.7
The Old will Get Older
5.15 In addition to New Zealand’s population having a substantial proportion of
people in 2051 in the 65 years or more age group, that age group will also
have an older profile. By 2051, it is projected that 6.1 percent of people will be
aged 85 years or older. They will make up 24.8 percent of people aged 65
years or more.8 This is over twice the proportion found in 2005.
Older People Everywhere
5.16 There will be variations between the population age structures on a regional
basis which is associated with ethnic concentrations in certain areas.
Nevertheless, the Auckland region is projected to be the only region with a
median age under 40 years in 2026. All territorial authorities are projected to
have an increase in the absolute numbers of older people in their districts.
5.17 By 2031, we can expect that the following places will have half of their
population aged 50 years or older:
• Waitaki District
• Thames-Coromandel District
• South Wairarapa District
• Hauraki District
• Buller District
• Horowhenua District
• Marlborough District
• Kaipara District
• Westland District
• Kapiti Coast District
• Kaikoura District
• Timaru District.
5.18 But some places will still have young population profiles. Manukau City, for
instance, can be expected to have the youngest median age. Half their
population can be expected to be older than 35 years in 2031 and the rest of
the Manukau City population will be younger than 35 years old. The twelve
districts with the lowest median ages by 2031 are:
• Manukau City
• Papakura District
• Hamilton City
• Palmerston North City
• Waitakere City
• Wellington City
• Porirua City
• Dunedin City
• Auckland City
• Otorohanga District
7 Statistics New Zealand, 2006.
8 Statistics New Zealand Projected Population Characteristics, 2006 (base) – 2061. Series 5.

31
• Rotorua District
• Waitomo District.
5.19 Although many of the current local authorities in the Auckland region have
relatively low median ages, the number of older people in that region is
expected to double over the next twenty-five years to around 329,300. For
Auckland City this will reverse a trend of declining proportions of older people.
For other local authorities in the Auckland region it will involve a significant
jump in the proportion of older people (Table 5.1).
Table 5.1: Proportion of Population Aged 65 Years or More in the Auckland Region by
Current Local Authorities 1991-20319
Local Authority Actual % of
population 1996
Actual % of
population 2006
Projected %of
population 2031
Auckland City 13.0 9.4 15.4
Franklin District (Part) 9.6 11.1 22.2
Manukau City 7.7 8.3 15.4
North Shore City 11.5 10.7 19.0
Papakura District 8.2 10.0 16.9
Rodney District 14.0 15.0 23.8
Waitakere City 7.5 9.2 17.2
Households in an Ageing Society
5.20 Statistics New Zealand projections for households extend to 2031. Between
2006 and 2031, household numbers can be expected to increase by 34
percent to 2.09 million households. The proportion of households with an
older reference person is also expected to increase. BERL and NZIRA project
that by 2051, households with an older reference person with number
between 672,00 and 827,000 households.10 That is, between 2.3 and 2.9
times the 288,990 households with an older reference person in 2006.
5.21 By 2031 it is expected that one-person households will account for around 30
percent of all households, an increase of 7 percent from 2006. Eighty percent
of that growth is among people aged 55 years or more.
Some Important Socio-Economic Trends
5.22 There are a number of social and economic trends which need to be taken
into account when reflecting on New Zealand’s future. Some of those relate to
the ageing population structure, some are changes in cultural practices and
patterns, and some emerge out of a complex relationship between the two.
This section comments upon three of those. They are:
• Labour force participation;
• Debt and savings;
• Housing tenure; and
• Mobility.
9 Statistics New Zealand, 2009b.
10 Nana et.al., 2009.

32
Labour force participation
5.23 New Zealand has no legislative requirement that people retire from the
workforce at a particular age. Around the period at which compulsory
retirement was abolished, the issue of when New Zealanders should be able
to access public pensions was being debated. Eligibility for superannuation
support fell to 60 years in 1977. In 1991, the incoming National Government,
raised the already agreed increase in the age of eligibility for New Zealand
Superannuation to 65 years on an accelerated timeframe between 1992 and
2001. Reduced access to pension support tends to increase labour force
participation, although not necessarily employment.11
5.24 Statistics New Zealand projects that the number of older people in the labour
force will increase from around 38,000 in 2001 to around 118,000 in 2026.
Numbers are expected to subsequently stabilise.
5.25 Those increases are dwarfed, however, by the numbers of older people
outside the labour force and, therefore, the numbers of older people likely to
have constrained incomes. According to Statistics New Zealand in 2001 the
number of older people outside the labour force was 420,000. That number is
projected to increase to:
• 820,000 in 2026; and,
• 1.2 million by 2051.
5.26 Labour force participation and employment are the primary sources of income
for adults in New Zealand.
5.27 It can be expected, then, that the majority of older people will have
constrained incomes and fall within the lowest income quartile. This has
profound implications for older people’s housing affordability and their ability
to invest in their own health and welfare.
Debt and savings
5.28 Traditionally, New Zealand’s older owner occupiers could expect to be largely
debt free. In the last decade, however New Zealand households have
become quite exposed to debt. This has been largely obscured by the fact
that the net wealth of New Zealand households has increased.
5.29 In 1998 aggregate net wealth in New Zealand was $266 billion. By 2008,
household net wealth was calculated at $575 billion. Household net wealth
doubled over the decade. This was driven almost entirely off house values
which shifted from $216 billion in 1998 to $568 billion by 2008. The extent to
which New Zealand households increased their exposure to debt, however, is
evident in the balance between total financial assets and total household
debt.
5.30 In 1998, total household financial assets had a value of $116 billion with
household financial liabilities at around half that amount at $63 billion. By
2008, the financial assets of households had increased 1.67 times to $194
billion, but total household debt was 2.8 times the amount it was in 1998 at
$177 billion.
11 Hurnard, 2005.

33
5.31 Overall, New Zealand’s household net wealth declined threefold from $53
billion in 1998 to $17 billion in 2008. There is also some indication that equity
has been actively withdrawn during the inheritance process.
5.32 Briggs estimates that in 2001, the value of housing based assets transferred
through inheritance was $5.5 billion. He suggests that because inherited
property tends to descend to middle aged, relatively well off people, they tend
to use that equity to increase their own consumption.
5.33 If older cohorts enter retirement in more debt, then it can be expected that
intergenerational transfers will fall. More importantly, options to supplement
post-retirement incomes through home equity release may be compromised.
If debt becomes concentrated among younger cohorts whether through
student loans or other non-housing debts, their entry into homeownership
may be delayed even if house prices fall.
Housing Tenure
5.34 Most older people will live in private residential dwellings in the future,
although Statistics New Zealand population projections suggest that the
numbers of people in non-private dwellings is expected to increase by 51
percent by 2031 to around 130,000. Among the older old the numbers in non-
private dwellings are likely to more than double from 23,000 in 2006 to 49,000
in 2031.12
5.35 Most older people, and most households with an older reference person, will
also live in owner occupied dwellings. BERL and NZIRA projections suggest a
slight fall in the proportions of households with an older reference person in
owner occupied dwellings from 81.2 percent in 2006 to around 79.6 percent in
2051.13
5.36 The actual number of households, however will increase between 2.3 and 2.8
times the number of households with an older reference person in owner
occupied dwellings in 2006. That is, from 288,990 households with an older
reference person in 2006 to between 535,600 and 658,360 households with
an older reference person by 2051.14
5.37 BERL and NZIRA15 projections suggest that the fall in proportions of
households in owner occupation will combine with the ageing of the
population structure to produce a significant increase in the numbers of
households with an older reference person in rental dwellings.16 Those
proportions suggest that the number of households with an older reference
person and in rental dwellings will increase between 2006 and 2051 at least
2.5 times and possibly as much as 3.1 times. That is, from 54,220 households
to between 136,400 households and 168,840 households.17
12 Statistics New Zealand Projected Population by Living Arrangement Type and Sex 2006 (base) –
2031. See the Glossary for a definition of non-private dwellings.
13 Nana et.al., 2009.
14 Nana et.al., 2009.
15 Nana et.al., 2009.
16 That analysis is marked by a less conservative population projection series than that used in the
Statistics New Zealand projection 5 series usually used throughout this report. However, they also use
tenure ratios based on those between 2001 and 2006. This is a more conservative approach than taking
the tenure ratio found in the 2006 census alone.
17 Nana et.al., 2009.

34
5.38 The number of older renter households in the private rental market is
projected by BERL and NZIRA to increase from 34,920 households in 2006 to
between 89,540 and 112,260 in 2051. BERL and NZIRA project that up to
40,450 older rental households will occupy central government housing
stock.18 The current Housing New Zealand Corporation stock consisted in the
2007/8 year of 68,664 properties.19
5.39 The BERL and NZIRA projections also suggest that up to 23,570 older
households will be in local authority housing.20 It should be noted that local
authorities currently provide around 14,000 units in total and there is no
indication of significant rising supply among local authorities.21 For that reason
the projections in the BERL and NZIRA report needs to be treated with
considerable caution.
5.40 Figure 5.1 shows the composition of those older renter households in the
2051 scenarios compared to the composition in 2006. Those projections
suggest that the most pronounced increase among older renter households
will be among households with a reference person 85 years or older. Despite
that, under all the projections that group will remain a minority of renter
households with a reference person 65 years or more.
Figure 5.1: Composition of Households in a Rental Dwelling with an Older Person
Reference in 2006 with 2051 BERL NZIRA Projections22
65-74 years
75-84 years
85+ years
65-74 years
75-84 years
85+ years
65-74 years
75-84 years
85+ years
65-74 years
75-84 years
85+ years
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2051 - Scenario 1 2051 - Sc enario 2 2051 - Scenario 3
18 Nana et.al., 2009.
19 Housing Zealand Corporation, 2008.
20 Housing New Zealand Corporation, 2008.
21 CRESA & Public Policy & Research, 2007.
22 Nana et.al., 2009.

35
5.41 A number of issues arise in relation to older people and the rental stock.
Firstly, landlords have a preference for older people.23 This implies that while
older people may be given preferential access to stock, unless the availability
of rental stock overall increases, the ageing of New Zealand society may see
both: increasing pressure on the rental stock; and, exclusionary pressure on
other groups that are less welcomed by landlords including large families,
young people, refugees and sole parents.
5.42 The second issue in relation to the rental stock is its typology and condition.
There is considerable churn between the owner occupied and private rental
stock in New Zealand. The typology of the rental stock is very much like that
of the owner occupied stock with many of its design and performance
problems. These are discussed later. It suffices to note that New Zealand’s
housing stock is not currently well adapted to the needs of an ageing
population irrespective of the stock tenure.
5.43 The third issue, which is also discussed later in this section, is around house
performance, maintenance, and repair. A 2008 survey of 491 private
landlords with 2,398 rental dwellings found that 75.4 percent of the stock had
been built before 1978. Only 58.8 percent of their stock was reported as
having ceiling insulation and over half the landlords reported that stock was
draughty. Almost half the stock did not have hot water cylinder wraps. Over
one third (39.9 percent) of the landlords reported that they set aside no
monies for repairs or maintenance, although 84.1 percent of landlords
reported having undertaken work on at least one of their dwellings to improve
thermal comfort. Almost half (46.2 percent) of landlords reported a willingness
to retrofit their rental stock if supported by central government. However, take
up of subsidies for retrofitting by landlords is very low compared to take up
among owner occupiers.
5.44 Under the conditions set out above, and with other studies showing poor
performance in the private rental stock, there must be considerable question
about the suitability of the rental stock for older people. Older people require
higher levels of thermal comfort and are vulnerable to excess seasonal
mortality associated with exposure to cold and damp.
5.45 Finally, the private rental sector in New Zealand has had a long history of
instability with landlords exiting the sector relatively quickly after entry.
Dwellings, too, are relatively rapidly churned between owner occupation and
rental. As a consequence, there must be some question about whether older
people in the private rental sector are likely to have secure tenure and the
associated stability of access to support and health services they will
require.24
5.46 It is notable that the 2006 census found the median years in a residence of
people in owner occupied dwellings or dwellings held in a family trust was 6.3
years compared to a median of two years residence among those occupying
a rental dwelling (Table 5.2).
23 Saville-Smith & Fraser, 2004.
24 Saville-Smith & Fraser, 2004.

36
Table 5.2: Median Years at Usual Residence by Tenure of Household
Median Years at Usual Residence
Census Year Owner Occupied/Family Trust
Households
Rental
Households
1996 6.9 1.9
2001 6.7 1.8
2006 6.3 2.0
Mobility and Disability
5.47 Ageing societies are confronted with critical issues of mobility. There is a
close association between ageing and an individual’s physical mobility. The
main data source on disability prevalence in the New Zealand population is
the Statistics New Zealand Disability Survey conducted in 2001. An earlier
household disability survey was conducted in 1996. In addition, two general
questions on disability were included in the 1996, 2001 and 2006 censuses.
Statistics New Zealand (2003) points out that disability prevalence data needs
to be treated with caution. There is systematic bias in disability surveys.
These surveys tend to understate the level of disability among older people
and mildly disabled people but possibly overstate moderate and severe
disability.
5.48 The commonly accepted prevalence rate of disability of about 1 in 5 (20
percent of New Zealand’s population) is based on the Household Disability
Survey conducted by Statistics New Zealand in 2001 after the 2001 census.
Disability increases with age, with 54 percent of people aged 65 and over
reporting a disability. The 2006 census indicates that 45 percent of people
aged 65 years or more reported a disability.25 In 2001 it was found that the
disability rates for Maori over 65 years was 61 percent, but the disability rates
for older Pacific peoples was similar to those for the total New Zealand
population.26
5.49 Reduced physical mobility presents accessibility challenges for housing and
neighbourhoods. Section 8 describes some of the overseas responses to
those issues.
5.50 In New Zealand there is some limited regulation with regard to accessibility to
non-residential buildings. There is no regulatory requirement around
accessibility for people with compromised mobility to private dwellings. The
Lifetime Design Council is, however, actively promoting accessible dwellings
and is looking towards developing Lifetime standards for neighbourhoods and
residential developments. Nevertheless, there is a substantial unmet need for
dwellings that are accessible to people with mobility related disability.
McDermott Miller estimated that in 2005 the market for accessible housing
was under supplied by 14,000 to 27,000 dwellings.27
25 These variations may be artefactual arising from measurement changes and changes in the
propensity to self-report.
26 Statistics New Zealand, 2002.
27 McDermott Miller, 2005.

37
5.51 The other aspect of mobility pertinent to ageing societies is around age
differentials around travel and commuting. Recent analysis of the Ongoing
New Zealand Household Travel Survey28 shows that older people are likely to
be walkers and users of public transport. It also shows an increasing
propensity to own cars and to drive compared to older people in the 1990s.
Despite this, older people have lower levels of both car ownership and car
licences. Around 4.4 percent of those in the 65-74 year old age group do not
have a car and 19.6 percent of people aged 75 years or more do not have a
car. Among people 65 years and older, 24 percent do not have a licence to
drive a car.29
5.52 If those ratios prevail in the future, by 2051 it may be expected that around
181,180 older people will be reliant on transport by others to access services,
amenities, employment, recreation or shopping because they do not own a
car. Well over a quarter of a million older people (324,700) will not have a
licence to drive a car and consequently will be reliant on other transport
modes to connect with services, employment, recreation and shopping for
basic amenities.
5.53 That implies that there will be considerable demand for housing in
neighbourhoods well serviced with public transport, with walkable access to
services, amenities and shops as well as neighbourhoods with walkable and
safe streetscapes for older people.
Housing Stock in New Zealand
5.54 Dwellings last a long time. The Building Act is based on dwellings being
functional for fifty years. But, in fact, there is a considerable amount of stock
currently being used in New Zealand that is considerably older. Only small
numbers of dwellings, around 2,000, are demolished annually and only about
3,000 dwellings are subject to major renovations annually.30 In the context of
an ageing society, then, two critical issues emerge. Firstly, the suitability and
performance of existing dwellings for an ageing population into the future.
Secondly, the ability of new stock to meet the needs of an ageing population.
Ageing Stock, Stock Performance, and Repair and Maintenance
5.55 The New Zealand housing stock, like the population that lives in it, is ageing.
The age profile of the existing stock is set out in Figure 1.1 and indicates a
stock of around 1.6 million dwellings servicing around 1.55 million households
in 2006.
5.56 By 2031, Statistics New Zealand projects that New Zealand will have around
2.09 million households. On the basis of current population projections the
number of households may well be around 2.4 million. On the basis of past
stock trends and the supply response to housing demand, the number of
dwellings in New Zealand may be around 2.5 million. Around two thirds of
those dwellings can be expected to be already built. The future stock will be
dominated by dwellings built in the 1960s and 1970s.
28 O’Fallon and Sullivan, 2009.
29 O’Fallon and Sullivan, 2009
30 Page, 2007.

38
5.57 Existing dwellings in New Zealand tend to perform poorly in relation to
thermal comfort and accessibility for those with compromised mobility. New
Zealand’s housing stock also is strongly dominated by detached dwellings
with three or more bedrooms. There is considerable under investment in
repair and maintenance in the dwelling stock.31 All of those problems raise
issues for older people and a society that is likely to have around 1.35 million
older people by 2051.
5.58 The problems with New Zealand’s stock performance have been well
rehearsed elsewhere. The major problems are: cold, damp and
inaccessibility.
5.59 In addition, there is evidence that older people are under-repairing and under
maintaining their homes. As a consequence, while older people tend to live in
dwellings with better condition scores than younger people, that differential
appears to be closing (Table 5.3). More importantly, older people's dwellings
showed inferior ceiling insulation relative to the dwellings of younger people in
the 1999 and 2004 House Condition Surveys undertaken by BRANZ. Ceiling
insulation is, of course, critical to energy efficiency and ensuring thermal
comfort.
Table 5.3: Distribution of Dwelling Average Conditions by Age of Householder –
BRANZ HCS 1999 and 200432
2004 All Houses 2004 Older
Householder’s Houses
2004 Younger
Householder’s Houses
Average
Condition Number Percent Number Percent Number Percent
< 2.5 1 0.2 0 0.0 1 0.2
2.5-2.9 16 2.8 5 3.5 11 2.7
3.0-3.49 82 14.5 19 13.3 62 15.2
3.5-3.99 207 36.6 53 37.1 147 36.0
4.0-4.49 164 29.0 42 29.4 119 29.2
4.5-5.00 95 16.8 24 16.8 68 16.7
Total 565 100 143 100 408 100
1999 All Houses 1999 Older
Householder’s Houses
1999 Younger
Householder’s Houses
Average
Condition Number Percent Number Percent Number Percent
< 2.5 11 2.4 0 0.0 11 2.8
2.5-2.9 35 7.5 3 3.9 32 8.2
3.0-3.49 91 19.6 12 15.6 79 20.4
3.5-3.99 140 30.1 30 39.0 110 28.4
4.0-4.49 110 23.7 18 23.4 92 23.7
4.5-5.00 78 16.8 14 18.2 64 16.5
Total 465 100 77 100 388 100
5.60 In addition, the value of undone maintenance of New Zealand houses seems
to be increasing among older people (aged 65 years plus) while decreasing
among younger people (under 65 years). In 1999, the average cost for
younger householders to bring their dwellings to an as new condition was
$9,214 compared to a $5,755 average cost for older householders. By 2004,
the average cost for younger householders was $7,081. That compares to
$6,095 for older householders.
31 Saville-Smith, 2005a.
32 Saville-Smith, et.al., 2008.

39
5.61 That is, unmet repairs and maintenance costs for older householders’
dwellings increased by 5.9 percent between 1999 and 2004. In contrast, the
value of unmet repairs and maintenance dropped for younger people's
dwellings between 1999 and 2004 by 23.1 percent.33
5.62 Overall, 58.9 percent of older homeowners made no expenditure on home
maintenance or repairs in the twelve months prior to surveying in 2004. A
quarter of older homeowners reported that they intended to expend no repairs
and maintenance monies in the following year.34
5.63 This is in part because older people persistently overstate the condition of
their home despite experiences of poor performance. In the 2008 National
Older People’s Repair and Maintenance Survey in which 1,600 older people
participated, 88.8 percent of older householders reported their dwellings as in
Good or Excellent condition. However:
• only half reported that their heating system always keeps them warm in
winter;
• 34.4 percent of householders reported problems with damp, mould or
condensation;
• 24.7 percent reported that they have had slips or falls inside or
immediately outside their home.
These indicate a higher prevalence of poorly designed or maintained homes
than older people themselves recognise.
5.64 In addition, the 2008 National Older People’s Repair and Maintenance Survey
found that 24.7 percent of older householders had had to make some sort of
modifications to their dwelling to allow them to move around in their home.
5.65 Staying in their existing home was a strong desire among the older people
participating in the 2008 National Older People’s Repair and Maintenance
Survey, even among those who reported that they felt that they had to move
because of ill-health. Indeed, desire to move house was strongly related to
house condition. Less than a fifth of the older people living in what they
considered as dwellings in Excellent or Good condition reported that they
intended to move. However, 25.1 percent of older householders in Average
condition dwellings reported an intention to move. Among householders in
dwellings reported as in Poor or Very Poor condition, 45.5 percent intended to
move.35
New Stock Suitability
5.66 In general, older dwellings have poorer thermal performance than newer
dwellings. However, New Zealand’s new dwellings are not necessarily
adequate to meeting the housing requirements of an ageing society. Two
problems emerge with the new housing stock being built in New Zealand:
• Average unit size is growing; and
• House design is not matched to the accessibility needs of older people.
33 Saville-Smith et.al., 2008.
34 Ibid.
35 Ibid.

40
5.67 In relation to size, in the 2006 census 27.6 of New Zealand’s occupied stock
had four or more bedrooms compared to only 22.3 percent of in 1996.
Overall, 71.9 percent of the stock had three or fewer bedrooms in 2006
compared to 76.7 percent in 1996. The proportion of dwellings with eight of
more rooms has increased from 15 percent of occupied dwellings in 1996 to
almost a fifth of dwellings in 2006.
5.68 The consequence is that the proportion of smaller households living in larger
dwellings has increased. Almost a quarter (24.1 percent) of households with
one, two or three household members lived in dwellings with seven or more
rooms in 2006. By way of contrast, only 18.4 percent of smaller households
lived in these larger dwellings in 1996.
5.69 Compared with other countries New Zealand has the greatest proportion of
dwellings with 5 or more rooms than the United States, the United Kingdom
and Australia (Figure 5.2). With falling household sizes this means that more
smaller households are living in larger dwellings. In 2006, 24.1 percent of
households with one, two or three household members lived in dwellings with
seven or more rooms. In 1973, an individual had an average of 32.5 sq
metres housing space in a new home but by 2008 that average had increased
to 73 sq metres.
Figure 5.2: Proportion of Housing Stock with Five Rooms or More by Country – 1st
Decade of the 21st Century
y
0 1020304050607080
Canada
New Zealand
United Kingdon
United States
Australia
Ireland
Norway
Netherlands
Germany
Italy
Belgium
France
Japan
Denmark
Switzerland
Sweden
Austria
Finland
Percentage of Housing Stock
5.70 Table 5.4 shows the average dwelling size for both houses and flats from
1976 to the March year 2008.

41
Table 5.4: Average Size of New Dwellings by March ended Year
Number of Average Floor Area March
Year Houses Flats Houses (m²) Flats (m²)
1976 20,932 11,257 121 83
1980 11,687 3,510 133 93
1985 15,664 6,118 133 99
1990 21,365 1,486 136 88
1995 21,619 2,062 171 116
2000 21,386 4,472 177 105
2005 23,355 6,690 206 94
2008 22,422 2,811 205 137
5.71 There are some obvious difficulties for older people in larger dwellings. Firstly,
they are both physically more demanding to maintain and more expensive to
maintain. It is notable that the 2008 national survey of older people’s repairs
and maintenance practices found that of the 285 older people who wanted to
move house, 38.9 percent reported that they wanted to shift from a larger to a
smaller dwelling. This was the most commonly reported reason for older
people wanting to move house.36
5.72 There is also some evidence, albeit limited, from the Household Energy End-
Use Project (HEEP) that energy use and expenditure are related to dwelling
size. Table 5.5 provides an analysis of monthly winter energy expenditure for
the HEEP dwellings by size. Table 5.6 shows the way in which energy costs
increase with dwelling size even where the number of people living in a
household remains the same.
Table 5.5: Estimated Monthly Winter Energy Costs by Size of Dwellings (HEEP)
Dwelling Size Sq Metres Mean $ Median $ Minimum $ Maximum $
100 sq metres or less $107.23 $100.00 $38.00 $250.00
101-150 sq metres $125.59 $120.00 $40.00 $320.00
151-200 sq metres $158.40 $150.00 $50.00 $450.00
201 or more sq metres $183.18 $160.00 $75.00 $400.00
Table 5.6: Estimated Monthly Winter Energy Costs by Dwelling & Household Size
(HEEP)
Household Size
1 person 2-3 people 4 or more people
Floor Area
Sq Metres Mean $ Median $ Mean $ Median $ Mean $ Median
$
100 or less $85 $75 $97 $95 $139 $130
101-150 $104 $105 $122 $120 $139 $140
151-200 $150 $150 $153 $150 $168 $152
201 or more No data No data $168 $160 $250 $250
36 Saville-Smith et.al., 2008.

42
5.73 The dependence of an ageing population on reticulated electricity is likely to
increase under the dual drivers of changed policy settings and physical
restrictions associated with ageing. For instance, it can be expected that the
take up of space heating options such as heat pumps will increase.37 This is
partly because some local authorities favour such options as a response to air
quality issues and partly because older people see heat pumps as less
physically demanding.38 Older people are also more likely in the future to be
reliant on electricity-based support systems in the home. Both those
developments have implications for affordable electricity supply as well as
security of supply.
5.74 The second aspect of stock suitability is around the accessibility of dwellings
themselves. A separate report on disability and housing needs39 found that in
2006/07 there was low awareness in the building and housing industries of
the accessibility needs of disabled people including those whose disability is
associated with ageing. Even those catering directly for the older person’s
market were frequently unaware of simple design features that would ensure
dwellings would be flexible and adaptable to future needs over time.
5.75 More recently the Lifetime Design Council has instituted an accreditation
process – the Lifemark – which provides an assurance to consumers that they
are purchasing a dwelling that meets a defined standard of accessibility. The
Lifetime Design Council has been actively engaging with developers and
builders to build lifetime design homes. Infobox 5.1 provides a list of
developers, builders and housing providers that have affiliated with the
Lifetime Design Council.40
Infobox 5.1: New Zealand’s Lifetime Design Foundation Establishment Members
Sommerset Retirement Villages The 3rd biggest retirement village operator in New Zealand with
over 1,000 residents in 12 villages in the North Island.
Generation Homes
Bay of Plenty and Waikato property developer and residential
volume builder. 12 week-cycle building with a land development
component in its service provision.
Greenstone Group
A North Island property company specialising in project and
development management reported volume of work exceeds
$900 million.
G.J. Gardner (Rodney) NZ franchise servicing area North Albany to Mangawhai Heads.
Builds about 70 to 80 homes a year.
Davista Architecture Designs A key architectural design firm for the Bay of Plenty specialising
in residential and urban design.
37 French, Issacs and Camilleri, 2009
38 This does not mean that older people are satisfied with heat pumps or are able to manage them
effectively. Fieldwork in the FRST funded Ageing in Place: Older People’s Repairs and Maintenance
programme suggests that many older people have considerable difficulty managing heat pumps
efficiently and meeting levels of desired comfort. This data will be reported by December 2009 on
www.goodhomes.co.nz.
39 Saville-Smith, et.al., 2007.
40 See www.lifetimedesign.org.nz

43
Neighbourhoods
5.76 The 2008 National Survey of Neighbourhoods undertaken by Beacon
Pathway as part of its work on sustainable neighbourhoods involved 1,300
participants.
5.77 Of those, 313 reported that at least one member in their household was aged
65 years or more. That survey confirms a large minority (45.4 percent) of
older people in New Zealand’s main urban centres live in low density
environment neighbourhoods. Over a third (37.1 percent) live in
neighbourhoods that are medium density. Around 59 percent live in mixed
neighbourhood environments compared to 60.2 percent of households with
no household member aged 65 years or more.

44
6. THEORETICAL MODEL: HOUSING DEMAND & AGEING
6.1 This section41 uses a theoretical model to understand the impact of an ageing
population structure on the housing purchase and consumption patterns of all
New Zealanders in 2050. The model attempts to understand how the housing
demands of working age people change as they anticipate living longer.
6.2 The model applies various conditions that working age people may anticipate
for their older age or ways in which the costs of longer lives might be
addressed. Those include paying more taxes or facing higher house prices.
Using numerous imaginary couples, the model calculates how the combined
housing demand of working age and older people may change as the
population ages. The model is used to explore how housing patterns are likely
to depend on the elasticity of housing supply and the way in which
governments choose to fund health care and/or pensions through the tax
system. The core findings are set out in Tables 6.1, 6.2 and 6.3.
6.3 The model also tests:
• The impact of non-ageing related conditions such as interest rates and
inflation. The results for this are presented in Table 6.4.;
• How housing demand depends on the house price to income ratio. The
results are presented in Table 6.5; and
• Impacts of reverse mortgage use. Those results are presented in Table
6.6.
The Model
6.4 The model is developed to explore how total housing demand and housing
supply change as average life expectancy and the total population increases.
A lifecycle general equilibrium model incorporating people of different ages is
used because there are a lot of complex feedback effects linking the housing
demand of older (retired) and younger (working age) households as the
population ages. These feedback effects can be broadly categorized two
ways.
• First, there is a direct contemporaneous effect on the housing demand of
working age households because they live in the same world as older
people. Since younger households pay taxes to pay for the pensions and
healthcare of older households, and since they compete with older
households to rent or purchase houses, an increase in the number of
older households tends to reduce the demand for housing among younger
households.
• Second, there is an indirect effect, because young people anticipate living
longer themselves, and are conscious of the need to save for longer
periods of retirement. The model is designed to capture both of these
effects in an internally consistent manner.
41 Modelling undertaken and reported by Andrew Coleman, Motu Economic & Public Policy Research.

45
6.5 The main results of the model are presented by showing what happens to
equilibrium housing demand patterns amongst both working age and older
households as average life expectancy in retirement increases from ten years
to twenty years. An increase in life expectancy of this order doubles the
fraction of the population that is retired, and increases the total population by
20 percent.
6.6 The features of this model of intergenerational housing demand are set out in
detail in Appendix B. In summary, however, this is a dynamic equilibrium
model that calculates the total demand for housing by a large number (1600)
of decision-making couples that live through four different stages of life and
who differ by age, income, and wealth. The model calculates housing demand
functions for theoretical decision-makers at each stage of their lives before
summing these separate demand functions into an aggregate demand
function.
6.7 Four assumptions underpin this study:
• First, there will be more people in the country, particularly more people
over 65, and this will mean there will be a need for more houses.
• Second, these decision-making couples make sensible, forward looking
decisions about their housing arrangements at different stages of their
lives, and that they respond in a rational manner to financial incentives
when making these decisions. The model assumes that they make
decisions around whether and when to save a deposit, to delay buying a
house when young if this would mean they would have very little to spend
on other things, and to take inflation into account when choosing between
lending money or investing in property.
• Third, people and governments face binding long run budget constraints.
In particular, decision-making couples cannot spend more than they earn
over a lifetime. Governments are assumed to run balanced budgets. This
means that if governments face higher expenses associated with
population ageing such as higher retirement payments or medical care
costs, they raise taxes to pay for them, and these taxes reduce the
disposable income of working age people.
• Fourth, young households are restricted in the amount they can borrow
from banks to purchase housing. These restrictions significantly affect
their housing choices. For this reason, the macroeconomic consequences
of population ageing – particular the implications of ageing for house
prices and tax rates – have a much greater effect on young adults than
middle aged adults, for they are most affected by bank imposed borrowing
restrictions. In general terms, the model finds that the combination of
credit constraints and population ageing is likely to cause many young
adults to delay their ascent of the housing ladder, and that these delays
have aggregate implication for total housing demand in the economy. In
particular, population ageing is likely to reduce home-ownership rates
among young adults, although the extent to which this will happen will
depend on the extent to which taxes are raised to pay for increased
numbers of older people, as well as the supply elasticity of the
construction sector.

46
6.8 The model analyses how the interaction of decision-makers who differ by age
and income determines house prices, and how these prices affect housing
allocations. Because the demand for housing depends on the age, wealth and
income of households, a version of the Modigliani-Brumberg overlapping
generations model is used. In the model, there is a plethora of decision-
makers that differ by age, income, and marginal tax rate. They choose to
consume goods and services, to live in large or small houses, and to rent or
buy. They save for retirement, pay tax, borrow and lend, face realistic
borrowing constraints, and choose whether or not to invest in housing. They
leave their homes as inheritances, and some inherit from their parents. House
prices are determined endogenously by matching the supply of houses with
the collective demand for housing by owner-occupiers and landlords.
Agent Characteristics
6.9 The model comprises a set of overlapping cohorts who are born at different
times. Each cohort comprised 400 theoretical decision-makers who differ in
terms of income. Each decision-making couple passes through four distinct
stages:
• two young stages,
• one middle-aged stage, and
• one stage in retirement.
6.10 The decision-makers have different income in each stage, and are allowed to
choose a different type of housing – whether they share housing with their
parents, rent a small house, buy a small house or buy a large house. They
are, however, assumed to choose their most preferred houses, given their
age, wealth and after-tax incomes, the cost (including interest charges) of
renting or buying different houses relative to other goods, and their ability to
raise a mortgage.
6.11 For a given set of housing prices, housing demand for each of the decision-
makers during their four stages of life is calculated. These 1600 different
housing demand functions are then added together so that the total demand
for housing can be calculated. Because each stage can be a different length,
the total number of houses will not be 1600; rather, if the first two stages were
ten years long (representing, say, ages 25-35 and 35-45), the third stage was
20 years long (45-65) and the last stage 12 years (65-77), aggregate housing
demand represents the demand of 400 times 52 or 20800 houses.
Housing Options, House ‘Quality’, and House Prices
6.12 The model shows how decision-makers ‘climb’ a housing ladder over the
course of their lives. The model allows decision-makers to potentially pass
through three stages before purchasing a high ‘quality’42 house. First, they
can share housing with others – in this case, the model assumes with their
parents. If they do so, the number of houses in the model will be less than the
number of people, so if housing is in short supply some sharing will be
necessary43. Secondly, they can rent a low quality house. It is assumed that if
42 High ‘quality’ is the term used in this section to denote a larger, more desirable house and low ‘quality’
is used to denote a smaller house. Different ‘quality’ in this model does not denote differential
performance.
43 The model only allows young people to share with their parents. If they do so they get lower utility
than if they lived by themselves, but they also pay no rent. However, it is also possible to model sharing
by allowing them to share with each other, say paying half rent and getting less utility than living by

47
they do this they get slightly lower utility than if they own the house. Thirdly,
they can purchase a ‘low quality’ house. If they purchase a high quality
house, they can trade down in retirement.
6.13 How far they climb the ladder is largely determined by life-time income.
Consumers with higher life-time income will be able to afford larger houses
than households with low lifetime incomes. The speed of ascent is
determined by four main factors: the steepness of the earnings profile;
inflation and interest rates; the tax incentives facing both consumers and
property investors; and the availability of credit from banks. Consumers will
ascend slowly when they have a steep earnings curve (implying relatively low
incomes while young), when credit is hard to obtain, and when tax laws
favour property investors.
6.14 It should be stressed that throughout Section 6, high and low quality only refer
to very broad characteristics of properties. High quality houses are assumed
to give more pleasure to people, and to cost more, than low quality houses.
Thus a “high quality” house might be a large house, or a house in a desirable
suburb, whereas a “low quality” house might be a small house or a house in a
less desirable location. Since the focus of this section is the broad
macroeconomic implications of population ageing on housing demand, other
microeconomic aspects of housing quality such as maintenance and heating
are ignored.
6.15 The difference between the macroeconomic definition of quality used in
Section 6 and the microeconomic definition of quality used elsewhere in this
paper is most apparent in the results section where it is argued that
population ageing will mean an increasing fraction of the oldest cohort will live
in high quality – that is large or desirable – properties. This occurs because a
large fraction of people live in high quality houses when they are middle aged
and many of these people live in the same house for at least part of their
retirement. As longevity increases, the fraction not trading down, or the
fraction delaying trading down, increases. In macroeconomic terms, this is
important because these houses are not “recycled” to younger families, and if
young families wish to purchase a high quality (large, desirable) house, more
of them will need to be built. This section of the paper ignores the
microeconomic aspects of the quality of these larger houses, however. It is
quite plausible that older people will spend a large fraction of their retirement
in the large, desirable houses they lived in when middle aged, but that these
houses deteriorate over time or are insufficiently heated.
6.16 Prices are determined endogenously in the model by equating the total
demand for different quality houses with the supply of these houses. The cost
of supplying each quality type will depend on the number of each type
supplied. This is specified in the model. The model finds prices that equate
the aggregate demand for those two different types of housing with the
aggregate supply of these types of housing.
themselves. While this would be straightforward to implement in the computer programme, it is difficult
to imagine much would be gained as the essential process of “sharing” is the same in each case.

48
6.17 Housing prices are generated using a complex numerical routine that keeps
choosing a new set of prices and then calculating the demand for each of the
1600 different households until a set of prices is found at which aggregate
demand equals aggregate supply. For this equilibrium set of prices, it is then
possible to calculate the overall demand pattern, including the number of
young households that rent and the number of older households that live in
‘high quality’ and ‘low quality’ houses.
Taxes and Housing Finance
6.18 The model can assume different supply settings for each quality of housing. It
can also adjust for:
• Various financial factors that influence the decision to buy, rent, or lease a
house;
• Conditions imposed by banks on those obtaining mortgage finance to
purchase a house, including constraints on the minimum deposit and the
maximum mortgage-repayment to income ratio. These constraints mean
that young households may choose to rent rather than buy a house, even
though the long term cost is the same, because they cannot obtain
suitable financing;
• Tax incentives facing landlords. Because there is no tax on capital gains,
but the inflation component of interest income is taxed, landlords may be
prepared to offer artificially low rents when there is inflation in order to
obtain tax free capital gains;
• Treatment of taxes by government. A key aspect of the model concerns
what happens as the population ages and the government spends more
on pensions and healthcare. In the basic version of the model, the
government raises tax rates on income to pay for this expenditure. This
lowers the after-tax income of working people, and reduces the amount
they have to spend on housing and other goods when young. Other
versions of the model examine the effect of different policies: for example,
in one simulation the Government reduces annual per capita pension
payments as the number of older people increases to ensure total pension
expenditure is constant, leaving it to individuals to fund their additional
retirement;
• House price and rent changes. The model calculates the rate of property
price appreciation as part of the process by which it calculates equilibrium
prices. While this is normally the general inflation rate, it does not need to
be.44
44 The model also assumes that households choose housing in a particular period while taking into
account their remaining length of life, their future income stream, and their future housing patterns. Thus
when choosing housing in their first period, a young person takes into account not only their current
income, current house prices, and interest rates and rents, but the fact that their income is likely to rise
as they get older and more experienced, that they are likely to want a larger house when they have
more money in the future, and that houses are likely to get more expensive. Depending on a variety of
factors including taxes and the inflation rate, and bank imposed mortgage lending criteria, this may lead
them to delay purchase, or it could lead them to purchase a large house quickly.

49
Housing Supply
6.19 The model allows housing supply functions to be varied. Three main
variations have been used:
• The first variation assumes that housing supply is almost perfectly elastic.
That is, there is no price response (other than an inflation adjustment) as
the number of houses in the economy increases. In this version, the price
of ‘high quality’ and ‘low quality’ houses differ by a fixed amount.
• The second variation assumes that the prices of ‘high quality’ and ‘low
quality’ houses increase as the number of houses increase by about 1
percent for each 1 percent increase in the number of houses.
• The third variation assumes both ‘high quality’ and ‘low quality’ house
prices increase as the number of houses increases, but ‘high quality’
prices increase at a faster rate than ‘low quality’ houses because they are
increasingly difficult to make (perhaps because of a shortage of suitable
building sites.
Applying the Model
6.20 Tables 6.1, 6.2 and 6.3 show how population ageing affects the housing
market in the model as major economic parameters or policy options are
varied. Each table shows what happens to different aspects of the housing
market as average life expectancy in retirement increases from 10 years to 20
years, and the population increases.
6.21 The tables show equilibrium house prices, the number of high quality and low
quality (‘large’ and ‘small’) houses, the homeownership rate of young
households, and the fraction of each cohort living in high quality (‘large’)
houses. It also shows the fraction of new houses that need to be high quality
to keep the market in equilibrium. For convenience, the population is
normalised so that there are 1000 households when life expectancy in
retirement is 10 years, 1200 when it is 20 years.
6.22 In Table 6.1 the supply of housing is almost perfectly elastic, with prices rising
by only 1 percent for every ten percent increase in the number of houses.
This set of supply parameters is called Supply Curve 1.
6.23 In this case, the price of low quality houses is approximately three times the
median income of middle-aged households, and high quality large houses are
approximately half as much again.

50
Table 6.1: Supply Curve 1: Both Curves Very Elastic
Length of last period 10 12 15 17 20
Total decision-makers 1000 1040 1100 1140 1200
Taxes raised to pay additional pension expenses
Number small houses 405 415 422 434 443
Number large houses 565 593 643 668 717
Total number houses 970 1008 1064 1102 1160
% new houses large 74% 83% 78% 80%
Price small house 199,000 200,000 201,000 202,000 203,000
Price large house 317,000 318,000 321,000 323,000 325,000
% cohort 0 owning 56% 54% 52% 49% 48%
% cohorts 0-1 large 36% 34% 32% 30% 27%
% cohort 2 large 95% 95% 94% 93% 90%
% cohort 3 large 19% 32% 48% 53% 62%
% total large 58% 59% 60% 61% 62%
Taxes increased to pay additional medical and pension expenses
Number small houses 405 418 438 446 467
Number big houses 565 588 624 652 686
Total number houses 970 1006 1062 1098 1152
% new houses large 63% 64% 68% 66%
Price small house 199,000 200,000 201,000 202,000 203,000
Price large house 317,000 318,000 320,000 322,000 324,000
% cohort 0 owning 56% 54% 50% 47% 43%
% cohorts 0-1 large 36% 34% 29% 27% 25%
% cohort 2 large 95% 94% 93% 91% 88%
% cohort 3 large 19% 32% 46% 53% 59%
% total large 58% 58% 59% 59% 60%
Taxes constant, no increase in total pension payment
Number small houses 409 412 414 420 430
Number big houses 562 599 656 690 741
Total number houses 970 1011 1070 1110 1171
% new houses large 91% 95% 92% 89%
Price small house 200,000 200,000 202,000 202,000 204,000
Price large house 317,000 319,000 322,000 323,000 326,000
% cohort 0 owning 56% 55% 56% 57% 57%
% cohorts 0-1 large 36% 36% 37% 37% 37%
% cohort 2 large 95% 95% 94% 92% 89%
% cohort 3 large 18% 31% 45% 52% 60%
% total large 58% 59% 61% 62% 63%
6.24 In Table 6.2 there are upward sloping supply curves, so house prices
increase as the population increases. This is called Supply Curve 2. When
the length of the final period is 10 years, house prices are the same as those
in Supply Curve 1, that is low quality houses costs approximately three times
as much as the median income of middle aged households, while high
quality houses cost 4.5 times as much. Prices of both types increase by
approximately 1 percent for each percent increase in the number of houses,
or by approximately 20 percent as the final period increases from 10 to 20
years (Supply Curve 2).

51
Table 6.2: Supply Curve 2: Both Curves Upward Sloping
Length of last period 10 12 15 17 20
Total decision makers 1000 1040 1100 1140 1200
Taxes raised to pay additional pension expenses
Number small houses 409 416 423 422 428
Number large houses 556 582 624 658 700
Total number houses 965 998 1047 1080 1128
% new houses large 77% 82% 88% 88%
Price small house 200,000 209,000 223,000 233,000 246,000
Price large house 311,000 321,000 336,000 347,000 362,000
% cohort 0 owning 52% 47% 40% 37% 31%
% cohorts 0-1 large 35% 32% 27% 25% 23%
% cohort 2 large 95% 94% 93% 92% 91%
% cohort 3 large 18% 33% 48% 56% 61%
% total large 58% 58% 60% 61% 62%
Taxes increased to pay additional medical and pension expenses
Number small houses 405 417 425 435 442
Number large houses 559 580 619 639 677
Total number houses 964 997 1044 1074 1119
% new houses large 65% 75% 73% 76%
Price small house 199,000 209,000 222,000 231,000 244,000
Price large house 311,000 321,000 336,000 345,000 359,000
% cohort 0 owning 52% 46% 38% 33% 29%
% cohorts 0-1 large 35% 31% 26% 23% 21%
% cohort 2 large 95% 94% 93% 91% 89%
% cohort 3 large 20% 34% 49% 53% 59%
% total large 58% 58% 59% 59% 60%
Taxes constant, no increase in total pension payment
Number small houses 409 413 404 402 410
Number large houses 556 588 648 685 730
Total number houses 965 1000 1052 1087 1140
% new houses large 89% 105% 105% 99%
Price small house 200,000 210,000 225,000 235,000 250,000
Price large house 311,000 322,000 339,000 350,000 366,000
% cohort 0 owning 52% 48% 43% 43% 42%
% cohorts 0-1 large 35% 33% 32% 31% 29%
% cohort 2 large 95% 95% 93% 93% 90%
% cohort 3 large 18% 32% 49% 57% 64%
% total large 58% 59% 62% 63% 64%
6.25 In Table 6.3, the slope of the high quality supply curve is much steeper than
the slope of the low quality supply curve, to reflect what happens if there is a
scarcity of premium location land. In this version of the model, a 1 percent
increase in the number of low quality houses leads to a 1 percent increase in
their price, but a 1 percent increase in the number of high quality houses
leads to a 3 percent increase in the price of high quality houses. This
combination is called Supply Curve 3. In the remaining tables some other
parameterisations are explored.

52
Table 6.3: Supply Curve 3: High Quality Supply Curve Steeply Upward Sloping
Length of last period 10 12 15 17 20
Total decision makers 1000 1040 1100 1140 1200
Taxes raised to pay additional pension expenses
Number small houses 398 424 460 480 517
Number large houses 567 574 588 599 610
Total number houses 965 998 1047 1079 1127
% new houses large 22% 25% 29% 27%
Price small house 199,000 209,000 223,000 232,000 246,000
Price large house 309,000 323,000 345,000 361,000 381,000
% cohort 0 owning 52% 47% 39% 35% 30%
% cohorts 0-1 large 36% 31% 25% 23% 19%
% cohort 2 large 96% 94% 92% 87% 82%
% cohort 3 large 21% 32% 41% 47% 51%
% total large 59% 58% 56% 56% 54%
Taxes increased to pay additional medical and pension expenses
Number small houses 398 424 461 470 517
Number large houses 567 573 584 599 603
Total number houses 964 997 1044 1069 1120
% new houses large 20% 21% 31% 23%
Price small house 199,000 209,000 222,000 229,000 244,000
Price large house 309,000 322,000 342,000 358,000 374,000
% cohort 0 owning 52% 46% 38% 41% 25%
% cohorts 0-1 large 36% 30% 24% 22% 18%
% cohort 2 large 96% 94% 91% 86% 81%
% cohort 3 large 21% 33% 41% 50% 52%
% total large 59% 58% 56% 56% 54%
Taxes constant, no increase in total pension payment
Number small houses 398 424 461 487 524
Number large houses 567 576 592 601 616
Total number houses 965 1000 1052 1088 1140
% new houses large 26% 28% 27% 28%
Price small house 200,000 210,000 225,000 235,000 250,000
Price large house 310,000 325,000 349,000 364,000 388,000
% cohort 0 owning 52% 47% 45% 41% 40%
% cohorts 0-1 large 36% 32% 27% 26% 24%
% cohort 2 large 95% 94% 90% 87% 80%
% cohort 3 large 21% 30% 41% 45% 50%
% total large 59% 58% 56% 55% 54%
Impact of Different Policy Options
6.26 Tables 6.1, 6.2 and 6.3 are divided into sections that show the results of the
different policy options as population ageing occur: The first section of each
table shows what happens when taxes are raised to maintain government
pensions at initial levels in real terms. The second section of each table
shows what happens if taxes are increased further to pay for increased
medical expenditure as well as pensions over a longer period. The increase in
medical expenditure is modelled at approximately 3 percent of Gross
Domestic Product (GDP). The length of pension payment is increased from
10 years to 20 years. The third section of each table shows what happens if
there is no change in total pension expenditure and no change in taxes.
Under those conditions, it is assumed that households save enough during
their working lives to pay for their additional years in retirement.

53
6.27 For example, consider the first section of table 6.2, which shows what
happens to the housing market as longevity increases and (i) the supply of
both high and low quality houses is elastic and (2) the government raises
taxes to pay for additional pensions. The first column shows the housing
market outcomes when life expectancy in retirement is 10 years, while the
last column shows the outcomes when life expectancy is 20 years.
6.28 When life expectancy in retirement is 10 years, the population is normalised
to 1000, and there are 965 houses of which 409 are low quality (‘small’) and
556 are high quality (‘large’). When life expectancy is 20 years, the population
has increased by 20 percent to 1200, and the number of houses increases to
1128, of which 700 are high quality. This means 88% of the new houses that
were constructed were high quality houses. The increase in the number of
houses means the price of low quality houses increased from $200,000 to
$246,000 in real terms, while the price of high quality houses increased from
$311,000 to $362,000.
6.29 When life expectancy in retirement is 10 years, 52% of cohort 0 and cohort 1
(young households) own their own houses; this figure drops to only 31%
when life expectancy is 20 years. The fraction of these two cohorts living in
high quality (‘large’) houses declines from 35% to 23%. There is little change
in the fraction of cohort 2 (middle aged) households living in high quality
houses: it declines from 95% to 91%. However, there is a large increase in
the fraction of cohort 3 (retired) households living in high quality houses: this
increases from 18% to 61%. Overall, the fraction of high quality houses in the
economy increases from 58% to 62%, as the increase in the number of
retired households living in these houses is offset by a decrease in the
number of younger households renting and living in small houses.
Impacts on Housing Demand in the Core Tables
6.30 This section presents the results from the model’s application in relation to
three different policy options. Those are where:
• Taxes are increased to pay for additional pensions;
• Taxes are increased to pay for additional pensions and health care; and
• There are no changes in taxes or pension expenditure.
Taxes Increased to Pay for Pensions
6.31 Table 6.1 indicates what happens when the construction sector is very elastic
so that there is very little change in prices as the population ages (Supply
Curve 1). The table is normalised so that the population is 1000 when the
length of the final period is 10 years, increasing to 1200 when the final period
is 20 years.

54
6.32 As longevity increases and the population both ages and increases in size,
the total number of houses increases, although by slightly less than the
increase in the number of decision-makers. (The total number of houses
increases by 190 houses or 95 percent of the increase in decision-makers).
Approximately 80 percent of these new houses are high quality. The
increasing demand for these new high quality houses largely comes from
retired people, because as longevity increases there is a sharp increase in
the number of older decision-makers who wish to live in a large house – or, to
be more precise, there is a steep fall in the fraction of decision-makers trading
down, for most people live in a high quality house in their middle ages. As
explained above, fewer decision-makers trade down as longevity increases
because the annual consumption gain from such a move falls compared to
the benefit gained from living in a large house.
6.33 The rise in taxes necessary to pay for higher pensions leads to an increase in
the average time it takes households to ascend the housing ladder. The
increased delay represents two factors: an increase in sharing and renting
amongst the youngest cohorts, and thus a reduction in home ownership rates
among this group (from 56 percent to 48 percent); and a reduction in the
fraction of cohort 0 and cohort 1 households purchasing a large house (from
36 percent to 27 percent). Not all young households are affected, but the
effects are felt up and down the income distribution. Some low income
households are affected by having to share rather than rent by themselves;
some middle income households delay the purchase of a small house,
choosing to rent instead; some relatively high income households wait to
middle age before upgrading to a large house.
6.34 In Table 6.2 it is also assumed that taxes are raised to pay for additional
pension expenditure as the population ages, but in this case house prices rise
as the total number of houses increases (Supply Curve 2).
6.35 The results show small house prices rise in real terms by 23 percent (from
$200,000 to $246,000) while large house prices rise by 16 percent (from
$311,000 to $362,000).
6.36 Three points should be noted:
• First, because both high and low quality house prices increase by a
similar amount, there is little additional benefit for a retired decision-maker
to trade down as the population ages. Thus the number of older
households choosing to live in high quality houses increases at the same
rate as in Table 6.1.
• Second, fewer new houses are built, because the higher price induces
more sharing among young cohorts. New houses are only built for 82
percent of the increased population, not 95 percent. However, a slightly
greater fraction of these new houses are large because of the demand
from older households.
• Third, there is a significantly larger reduction in the fraction of cohort 0 that
purchases a house, and the fraction of cohorts 0 and 1 that purchase a
large house, as the population ages. As longevity increases from 10 to 20
years, home ownership among cohort 0 drops by 21 percentage points
rather than by 8 percentage points, and the fraction of cohort 0 and 1
owning a large house drops by 12 percentage points rather than 9
percentage points. From these results, it would appear that the increased
house prices associated with population ageing will have its biggest effect
on young households by making it more difficult for them to purchase a
new house.

55
6.37 In the first section of Table 6.3 it is also assumed that taxes are raised to pay
for additional pension expenditure as the population ages, but in this case
prices rise more sharply for large houses than small houses as demand
increases (supply version 3). This produces a twist in the results compared to
Table 6.2.
6.38 The increase in the total number of houses, and the decline in home
ownership among cohort 0 is almost the same (for at the margin these
households are affected by the price of small houses and this is the same in
supply versions 2 and 3), there is a much smaller increase in the total
demand for large houses. Only 25-30 percent of new houses are large
houses, in contrast to the 85-90 percent figure in Table 6.2 when the supply
curves for small and large houses had the same slope. In turn, this means
that the fraction of large houses in the society declines as the population
ages.
6.39 As longevity increases from 10 to 20 years, there is a smaller increase in the
fraction of retired decision-makers living in large houses (up 30 percentage
points rather than 43 percentage points) and a larger decrease in the fraction
of cohorts 0 and 1 living in large houses (down 17 percentage points rather
than 12 percentage points.) There is also a sharper reduction in the number
of middle aged households living in large houses as the population ages,
down 13 percentage points rather than 5 percentage points. Even in this
case, however, more than 80 percent of middle-aged decision-makers live in
a large house.
Taxes Increased to Pay for Pensions and Medical Care
6.40 The second sections of Tables 6.1, 6.2 and 6.3 show what happens when
there is an increase in government funded medical expenditure as well as
pension expenditure. Medical expenditure increases by 3 percent of GDP as
longevity increases from 10 to 20 years, somewhat lower than the
approximately 5 percent increase in expenditure on pensions.
6.41 In each case, the results are very similar to the previous tax approach, home
ownership rates among the young cohorts are slightly lower.
6.42 The similarity of the results partly reflects the modelling choice that as the
population ages the increase in medical expenditure on those aged 65 and
older will be smaller than the increase in pension expenditure. This is
because annual per capita medical expenditure on those over 65 is currently
much lower than annual per capita pension expenditure. But it also reflects
differences in the way that the utility benefits of health care and pensions are
modelled. In the model, health expenditure provides no income or utility in old
age; rather it prevents large negative shocks to utility. Thus, unlike pension
payments, medical expenditure does not alter the shape of the income or
consumption profiles through time; rather the additional taxes that pay for
higher medical expenditure merely lower disposable income, rather than tilt it
towards older age. Consequently, these taxes do not intensify the effects of
credit constraints on young households, and have very little effect on housing
choices.45
45 Several variations with different values of the health expenditure variable were calculated. In all of the
cases, the level of healthcare had very little effect on housing profiles.

56
No Changes in Taxes or Total Pension Expenditure
6.43 The third sections of Tables 6.1, 6.2, and 6.3 shows what happens when
longevity increases, but total pension expenditure remains at its initial levels,
and taxes are unchanged. Households must save for their own additional
years of retirement if they wish to smooth consumption.
6.44 This does have an impact because the most tax efficient way of saving is to
purchase a house and consequently young decision-makers have greater
incentives to buy rather than rent at a young age. When the supply is nearly
perfectly elastic (Supply Curve 1) the increase in longevity leads to an
increase in the total number of houses and the number of older people living
in large houses, as before. However, the fraction of cohort 0 owning, and the
fraction of cohorts 0 and 1 living in large houses scarcely changes as the
population ages.
6.45 In supply versions 2 and 3, the number of young decision-makers owning
houses or purchasing large houses still decreases, because of the increase in
house prices, but the decline is much smaller than when the government
raises taxes to pay for additional pensions. In Table 6.2 the fraction of cohort
0 who own their own homes declines by 10 percentage points, not 21
percentage points, as longevity increases from 10 years to 20 years, and the
fraction owning large houses decreases by 6 percentage points rather than
12 percentage points. In Table 6.3 the results are similar.
Summary of the Core Results
6.46 There are four results that deserve emphasis:
• Firstly, the model suggests that population ageing will have little effect on
most households’ peak quality housing. Most of the changes in the
housing demand of working age households will reflect the amount of time
they spend in their high quality houses, rather than the size of their
houses.
• Second, population ageing is likely to see an increase in the demand for
high quality housing among retired households.
• Third, there is likely to be a fall in the number of young (25 – 45)
households living in large houses.
• Fourth, unless it is increasingly difficult to construct new high quality
houses compared to new low quality houses, as the population ages the
decline in the demand for large houses by working age people will be
much smaller than the increase in the demand for large houses by older
people. Consequently, population ageing will mean that the demand for
most new houses will be high quality houses.
Impacts on Housing Demand for Other Cases
6.47 This section presents the results from the model’s application in relation to
some other cases. They are where there are changes in: Inflation and interest
rates; housing supply; and, reverse mortgage use.

57
Inflation and Interest Rates
6.48 In Table 6.4, the effect of variations in interest rates and the inflation rate are
explored, because these rates have significant effects on the rate at which
households ascend the property ladder. The results are shown for the case
that taxes are increased to pay for additional pension expenditure in Supply
Curve 2 (c.f. section 1 of Table 6.2).
Table 6.4: Variations in interest rates and inflation rates for supply curve 246
Length of last period 10 12 15 17 20
Total decision-makers 1000 1040 1100 1140 1200
Inflation = 0, real interest rates = 5
Number small houses 389 397 408 416 430
Number large houses 573 598 637 662 695
Total number houses 962 995 1045 1077 1125
% new houses large 74% 77% 77% 75%
Price small house 199,000 208,000 222,000 232,000 246,000
Price large house 311,000 321,000 336,000 346,000 361,000
% cohort 0 owning 75% 72% 67% 64% 59%
% cohorts 0-1 large 43% 40% 36% 33% 28%
% cohort 2 large 94% 93% 92% 91% 94%
% cohort 3 large 12% 27% 43% 50% 52%
% total large 60% 60% 61% 61% 62%
inflation = 0, real interest rates = 4
Number small houses 411 427 447 457 488
Number large houses 564 583 614 639 658
Total number houses 975 1010 1061 1096 1145
% new houses large 55% 58% 62% 55%
Price small house 203,000 212,000 227,000 237,000 251,000
Price large house 314,000 325,000 340,000 351,000 366,000
% cohort 0 owning 51% 46% 35% 27% 22%
% cohorts 0-1 large 45% 42% 38% 35% 30%
% cohort 2 large 95% 95% 94% 93% 93%
% cohort 3 large 3% 15% 30% 38% 42%
% total large 58% 58% 58% 58% 57%
inflation = 2, real interest rates = 4
Number small houses 434 438 438 442 450
Number large houses 545 575 624 654 696
Total number houses 979 1013 1062 1096 1146
% new houses large 87% 95% 93% 90%
Price small house 204,000 213,000 227,000 237,000 251,000
Price large house 315,000 325,000 341,000 351,000 367,000
% cohort 0 owning 9% 6% 2% 0% 0%
% cohorts 0-1 large 37% 34% 31% 28% 26%
% cohort 2 large 96% 96% 95% 94% 93%
% cohort 3 large 6% 24% 41% 48% 55%
% total large 56% 57% 59% 60% 61%
6.49 When real interest rates are 5 percent, Table 6.4 shows that a reduction in
the inflation rate from 2 percent to zero will have large effects on the level of
housing demand.
46 In each section, taxes are increased as the population ages to pay for higher aggregate pension
expenditure. When the elderly population doubles, pension expenditure increases by around 5% of GDP

58
6.50 There will be a large increase in homeownership rates among the youngest
cohort (up by over 20 percentage points), a somewhat smaller increase in the
fraction of cohorts 0 and 1 owning large houses (up by 8 percentage points
when the period length is 10 years), and a small decrease in the fraction of
the older households owning large houses. The latter decrease occurs
because some households spend more of their lifetime income on large
house when young, and cannot afford a large house at both ends of their
lives. These are level effects, occurring at all values of the longevity
parameter.
6.51 There is also a change in the speed at which young households reduce
homeownership rates as longevity increases, but it is not particularly large. As
longevity increases from 10 to 20 years, homeownership rates among cohort
0 decline by 16 percentage points when the inflation rate is 0 percent rather
than 21 percentage points when the inflation rate is 2 percent. The difference
in the rate at which young households reduce their ownership of large houses
as the population ages is even smaller.
6.52 Overall, then, while these changes suggest that control of inflation will be an
important factor in ensuring homeownership levels among the young are
maintained as the population ages, inflation does not have a very big effect
on the rate of change of young households’ ownership patterns as the
population ages.
6.53 The simulations in Table 6.4 suggest that the effects of changing real interest
rates are more ambiguous. The model suggests a decline in real interest
rates has a positive effect on the total number of houses (because rents are
lower, inducing less sharing), a small positive effect on the fraction of cohort 0
and 1 that owns a large home (because finance costs are lower), and a large
negative effect on the fraction of cohort 0 that owns a home (because of
competition from landlords). In the simulations, a decline in real interest rates
from 5 percent to 4 percent leads to an approximately 1.5 percent increase in
the total number of houses, a 2 percent increase in the number of cohort 0
and 1 households owning a large house, and at least a 25 percent decrease
in cohort 0 home ownership rate.
6.54 Real interest rates have very little effect on the rate at which the fraction of
young households owning large houses changes as the population ages. The
effect of real interest rates on the rate at which homeownership among cohort
0 declines as the population ages is more complicated, however. When real
interest rates are 5 percent and the inflation rate is 2 percent, home
ownership rates fall steeply as the population ages. When real interest rates
are 4 percent and the inflation rate is 2 percent, homeownership rates among
young cohorts are very low – under 10 percent – for all levels of longevity.
Because they start so low, they cannot fall by much, and consequently
population ageing has very little effect on homeownership rates among young
households. The situation is different again when the inflation rate is 0
percent, for in this case homeownership rates for cohort 0 are initially high
when real interest rates are either 4 percent or 5 percent and thus can decline
as the population ages. In this case, the rate at which homeownership
declines as the population ages is greater when real interest rates are 4
percent than when they are 5 percent.

59
6.55 While the model suggests real interest rates have very considerable effects
on homeownership rates, the quantity of small houses is little affected by
whether they are owner-occupied or owned by a landlord. From this
perspective, real interest rates have relatively little effect on the how the total
number of different quality houses will change as the population ages.
6.56 Consequently, the figures reported in Table 6.4 suggest that real interest rate
levels have relatively little quantitative effect on the core results. Those are
that as the population ages, the number of high quality houses demanded by
older people will increase, and the number demanded by young people will
decrease. Nonetheless, if there is a decline in real interest rates as well as
population ageing over the next forty years, it is likely that an increasing
fraction of the housing stock will be rented.
House Supply
6.57 Table 6.5 shows the results for three different changes in the housing supply
functions. In each case, the slopes of the house supply functions are the
same as Supply Curve 2, but the price levels have been increased. This
means the house price/income ratio is higher in these economies than in the
economies described by the core tables.
6.58 The first section of Table 6.5 has the results when the prices of small and
large houses are increased, keeping quality the same, by approximately
$50000. In the second section of Table 6.5, the price of small houses is
unchanged, but the price of the same quality large house is increased by
$50000. In the third section of Table 6.5, both the price and the quality of
large houses are increased to reflect what happens as high quality houses
become better.
6.59 The inflation rate and real interest rate in Table 6.5 are 2 percent and 5
percent respectively; little changes when the inflation rate is reduced to 0
percent.
6.60 Table 6.5 shows what happens if pension expenditure and taxes are
increased as the population ages. As such Table 6.5 is directly comparable to
section 1 of Table 6.2.
6.61 The results are broadly similar to those described already. The easiest case
to consider is when both the quality level and the price of high quality houses
is increased. In this case there is almost no qualitative or quantitative change
in the effect of population ageing on the patterns of homeownership: as
before, population ageing causes an increase in the fraction of older
households living in large houses, and an increase in the fraction of young
households renting and living in small houses. The only major difference is an
increase in the fraction of cohort 0 households owning houses (at all levels of
longevity) as it costs more money and a larger deposit to purchase a high
quality house, and the most tax efficient way to save these funds is to start by
buying a small house.

60
Table 6.5: Additional Variations in Supply Curves, Inflation = 2.
Length of last period 10 12 15 17 20
Total decision-makers 1000 1040 1100 1140 1200
Both house prices increased
Number small houses 403 400 397 411 412
Number large houses 528 563 613 633 678
Total number houses 931 963 1010 1044 1090
% new houses large 109% 108% 93% 95%
Price small house 266,000 275,000 289,000 299,000 312,000
Price large house 377,000 387,000 402,000 412,000 427,000
% cohort 0 owning 22% 21% 20% 21% 19%
% cohorts 0-1 large 27% 25% 23% 21% 18%
% cohort 2 large 94% 93% 92% 91% 90%
% cohort 3 large 21% 38% 52% 54% 62%
% total large 57% 58% 61% 61% 62%
High quality house prices increased
Number small houses 550 592 631 644 655
Number large houses 416 407 419 437 474
Total number houses 966 999 1049 1081 1129
% new houses large -25% 4% 19% 36%
Price small house 200,000 209,000 224,000 233,000 247,000
Price large house 355,000 364,000 379,000 389,000 404,000
% cohort 0 owning 45% 42% 38% 35% 27%
% cohorts 0-1 large 23% 21% 19% 17% 15%
% cohort 2 large 81% 79% 76% 74% 70%
% cohort 3 large 0% 3% 13% 22% 33%
% total large 43% 41% 40% 40% 42%
High quality house prices increased and quality improved
Number small houses 375 377 389 391 390
Number large houses 588 620 656 687 736
Total number houses 963 996 1045 1077 1125
% new houses large 96% 83% 86% 91%
Price small house 199,000 208,000 222,000 232,000 246,000
Price large house 359,000 370,000 385,000 395,000 410,000
% cohort 0 owning 63% 60% 55% 52% 44%
% cohorts 0-1 large 36% 33% 28% 26% 24%
% cohort 2 large 96% 95% 94% 93% 92%
% cohort 3 large 30% 45% 56% 62% 68%
% total large 61% 62% 63% 64% 65%
6.62 In the case that high quality houses are simply more expensive (without a
commensurate increase in quality) the effect of population ageing on housing
demand is again largely unchanged. In this case, however, there is one major
difference in the level of homeownership: the model predicts that far fewer
households will own large houses in their retirement, although the number
does increase as longevity increases.
6.63 The model suggests that the amount of money that can be made from trading
down compared to the benefit of living in a larger house is simply so tempting
that most older decision-makers will do it. This prediction is clearly
counterfactual. In the real world a large fraction of households never trade
down in retirement. It suggests that the parameterization of the model could
be improved to better reflect the desire of many (but by no means all)
households to age in place even when the financial incentive to trade down is
very large. Nonetheless, even though in this case the level effect may be

61
wrong, the model still suggests that as the population ages there will be a
large increase in the fraction of older households choosing to live in high
quality houses, and a significant increase in the fraction of young households
living in low quality houses.
6.64 The results when the prices of both types of houses are increased, keeping
quality unchanged, are again similar to before, with one exception. In this
case, homeownership levels among cohort 0 are significantly reduced,
because more households share and because more households rent rather
than take out a much bigger mortgage47. The simulations suggest that
homeownership rates among cohort 0 are so low at all values of longevity that
they scarcely decline as longevity increases, in contrast to the earlier result
that increases in longevity reduce home ownership rates. Otherwise the
fraction of older households who live in large houses, and the fraction of
cohorts 0 and 1 who live in small houses, increase as the population ages at
a very similar rate as suggested in Supply Curve 2.
Reverse mortgages and inheritance
6.65 In all of the analysis to this point, it is assumed that when an old decision-
maker dies its house is left to a younger decision-maker. Under those
conditions, the only way that a household can extract equity from housing is
to sell a large house and buy a small house. However, retired households
may be able to use reverse mortgages to extract some of the equity of their
house and use the proceeds to increase consumption in the last period. If
they were to do this, they could also reduce their saving in earlier periods in
anticipation of taking out a reverse mortgage later on. Table 6.6 sets out the
results of the model when reverse mortgage settings are used.
6.66 The main effect of a reverse mortgage is that a greater fraction of older
households own large houses, for a reverse mortgage lets them have their
house and eat it too. When life-expectancy is 10 years, the fraction of retired
households owning a large house increases by 23 percentage points; when
life expectancy is 20 years, so more households want to own a large house in
any case, the increase is 11 percentage points. The increase in the number of
older households living in large houses means that the fraction of large
houses in the economy increases.
6.67 The effect on working age households is mixed. This is because for some
households (those that do not receive an inheritance) the availability of
reverse mortgages will reduce the amount they need to save for retirement,
while for other households (those who do receive an inheritance) the
availability of reverse mortgages will increase the amount they need to save
for retirement. The latter effect occurs because the reduction in the
inheritances they receive because their parents take out a reverse mortgage
is greater than the reduction in their need to save because they will take out a
reverse mortgage. Table 6.6 shows there is a small increase in the fraction of
cohort 0 households owning a house and a small decrease in the fraction of
middle aged households living in large houses, suggesting that the latter
effect dominates. Nonetheless, the effects on working age people are
outweighed by the increase in the fraction of older households who live in
large houses.
47 The higher house prices mean both rents and mortgages will be higher. Nonetheless, a mortgage
costs more than rent, and the increase in mortgage payments reduces consumption so low that many
households choose to rent rather than accept a deep cut in consumption.

62
Table 6.6: Reverse Mortgages and Inheritances; Supply Curve 2, Inflation = 2.48
Length of last period 10 12 15 17 20
Total decision-makers 1000 1040 1100 1140 1200
Supply curve 2: standard inheritance, no reverse mortgage
Number small houses 409 416 423 422 428
Number large houses 556 582 624 658 700
Total number houses 965 998 1047 1080 1128
% new houses large 77% 82% 88% 88%
Price small house 200,000 209,000 223,000 233,000 246,000
Price large house 311,000 321,000 336,000 347,000 362,000
% cohort 0 owning 52% 47% 40% 37% 31%
% cohorts 0-1 large 35% 32% 27% 25% 23%
% cohort 2 large 95% 94% 93% 92% 91%
% cohort 3 large 18% 33% 48% 56% 61%
% total large 58% 58% 60% 61% 62%
Supply curve 2: standard inheritance, reverse mortgage
Number small houses 368 377 400 407 406
Number large houses 596 622 649 674 724
Total number houses 964 998 1049 1081 1130
% new houses large 75% 62% 67% 77%
Price small house 199,000 209,000 224,000 233,000 247,000
Price large house 312,000 322,000 338,000 348,000 363,000
% cohort 0 owning 54% 48% 44% 42% 40%
% cohorts 0-1 large 35% 32% 27% 25% 24%
% cohort 2 large 94% 93% 90% 88% 85%
% cohort 3 large 41% 52% 60% 65% 72%
% total large 62% 62% 62% 62% 64%
Supply curve 2: different inheritance, no reverse mortgage
Number small houses 386 382 395 405 414
Number large houses 577 614 650 673 713
Total number houses 963 995 1044 1077 1127
% new houses large 114% 90% 84% 83%
Price small house 200,000 209,000 223,000 232,000 247,000
Price large house 312,000 322,000 337,000 348,000 363,000
% cohort 0 owning 56% 53% 46% 42% 35%
% cohorts 0-1 large 35% 32% 27% 26% 24%
% cohort 2 large 97% 97% 95% 93% 90%
% cohort 3 large 25% 42% 54% 58% 65%
% total large 60% 62% 62% 62% 63%
A Comment on Implications
6.68 The focus of the research has been to identify the main economic factors that
will change housing demand for households at different stages of the housing
lifecycle as longevity increases and the population ages.
6.69 Many of the factors considered in the model have large effects on housing
patterns. Factors such as interest rates, inflation, tax rules, and building costs
can dramatically change the level of homeownership at young ages, the
speed with which households climb the housing ladder, and the overall
fraction of high quality houses in the economy. Almost all of these factors are
48 In each section, taxes are increased as the population ages to pay for higher aggregate pension
expenditure. When the elderly population doubles, pension expenditure increases by approximately 5%
of GDP

63
important because of the way they affect the credit constraints on young
households, or the incentives to invest in housing rather than other assets.
6.70 A somewhat different picture emerges when focusing on factors whose effect
on housing patterns changes as longevity increases and the population ages.
Two of those were seen as most likely to be important. The first factor is the
extent to which the government will increase taxes and its aggregate
expenditure as the population ages, because it provides pensions and
medical care to an increasingly large share of the population.
6.71 If the government maintains the annual per capita value of pension
expenditure, by 2050 population ageing will result in a large increase in
government expenditure, by approximately 5 percent of GDP. Increases in
medical expenditure will raise this amount further. In most versions of the
model it is assumed that taxes will be increased on all households to raise
these funds.
6.72 As the increase in taxes reduces the disposable income of working age (and
other) households, some young households will find it preferable to rent for
longer and to delay their purchase of a large home. Consequently, population
ageing is likely to lead to a reduction in aggregate housing demand by young
households, and a substitution away from larger or better quality houses.
6.73 The aggregate effect of this tendency to delay the purchase of a better quality
house is relatively modest, however, unless house prices increase quite
steeply as the total population increases.
6.74 If house prices do not change, the model suggests that the tax increase
needed to pay for expenses associated with a doubling of the older
population will reduce homeownership rates and the fraction of younger
households living in large houses by approximately 10 percentage points.
6.75 If the government did not raise pension or medical expenditure, or taxes, as
ageing occurs, again holding house prices constant, the aggregate demand
for housing by young people scarcely changes as the older population
doubles in size, in contrast to the situation when taxes are increased and
homeownership rates decline by approximately 10 percentage points. The
difference occurs because households have greater incentives to save for
retirement and because housing is a tax advantaged asset class. It is
possible that homeownership rates among the young could increase in these
circumstances, although in the scenarios analysed most additional saving
takes place during middle age due to the joint impact of credit constraints and
a steeply rising life-cycle wage profile.
6.76 The model suggests that changing the tax rate has little effect on the quality
level of most households’ peak quality houses – the houses in which people
typically live when they are middle-aged. This is because New Zealand’s tax
laws generate large incentives to buy residential housing rather than interest
earnings assets and mean most middle-aged households are better off if they
hold their wealth as property. Since there are incentives for households to
save for retirement in the model, because the pension level is much lower
that average income, the tax system means that most households choose to
live in a large house in their middle age. This seems unlikely to change as the
population ages.

64
6.77 The second factor that appears likely to have a major effect on the demand
for housing as the population ages is the supply elasticity of the construction
sector. Population ageing will lead to an increase in the total number of
people in the country, and unless the housing supply is extremely elastic this
will mean house prices will rise.
6.78 The model indicates that these house price increases will choke off demand
among young people, lowering home ownership and the fraction of young
households living in large houses. These price effects reinforce the effects of
higher taxes, and are quite large.
6.79 When the elasticity of supply is approximately 1 percent - which seems likely
to be the value in New Zealand – population ageing causes price feedback
effects on young people that are similar in size to the effect of the tax
increases49. Consequently, the total effect is about twice as large compared
to the case that supply is perfectly elastic. Again, there is very little effect on
the peak housing quality attained by most people.
6.80 When the supply elasticity for high and low quality houses is similar, the
reduction in the demand for high quality houses by young people is much
smaller than the increase in the demand for large houses by older people.
Consequently, as the population ages the vast majority of new houses will be
high quality.
6.81 If the supply of high quality houses is less elastic than the supply of low
quality houses, there is an additional feedback effect. In this case the price
feedback effects have a much larger effect on the demand for high quality
houses than the demand for low quality houses, as the higher rate of price
increase for high quality houses acts to curtail demand for this type of house.
The effect is much greater on young households (who are credit constrained)
than older households (who are wealthier); indeed, the supply elasticity for
high quality houses only needs to be half as big as the supply elasticity for
low quality houses for the decline in the demand for high quality houses by
young people to almost completely offset the increase in the demand for high
quality houses by older people. In these circumstances, population ageing will
mean most new houses in the economy will be low quality houses, and
population ageing will cause a substantial change in ownership patterns. In
particular, high quality houses will be increasingly inhabited by older people.
6.82 If the dominant feature of a high quality house is location, and the convenient
access it provides to high quality facilities, it is quite likely that the supply
elasticity for houses in nice suburbs is much lower than the supply elasticity
for houses in far-away or less desirable suburbs. In this case the housing
ladder will be characterised by a shift from worse to better suburbs rather
than from smaller to larger houses. As the population ages, the high quality
suburbs will get “grayer”, while younger households will increasingly live in
newer, less desirable suburbs as they cannot afford the better locations. In
turn, this may generate a mismatch between the current location of public
facilities such as schools and sport-fields and the location of the young
households who will primarily use them, and an increase in the use of
transport services.
49 In New Zealand, for instance, the population increased by 54 percent between 1962 and 2002, while
real house prices increased by 80 percent, implying an elasticity of 1.2.

65
6.83 These two scenarios are quite different. If the main feature that distinguishes
high and low quality houses is the size of the house, the model predicts that
while there will be a decline in the fraction of young households owning
houses, and a decline in the fraction owning large houses, overall population
ageing will lead to a large increase in high quality large houses. In contrast, if
the main feature that distinguishes quality is location, the model predicts that
population ageing will squeeze young households out of the more desirable
housing markets, that most new houses will be built in less desirable
locations. In both cases, however, the tendency of middle-aged households to
live in better quality houses is unchanged.
6.84 It remains to discuss some of the weaknesses of the model. First, for
technical reasons it has proved difficult to incorporate the effect of income
growth into the model. Nonetheless, earlier work shows that the effect of
successive cohorts earning larger and larger incomes is similar to the effect of
a decline in real interest rates.50 This intensifies the effect of credit constraints
on young households, and is likely to reduce their home-ownership rates.
Nonetheless, in this model a 1 percent decline in real interest rates has
relatively little effect on the way population ageing affects the housing
demand, and only a modest effect on the mixture of large and small houses
owned by young households, changing the ratio by 2-3 percentage points.
6.85 Second the model explicitly assumes households are forward looking and that
they smooth consumption over their lifecycles. While to some extent this
assumption is likely to be realistic, the amount of information that agents are
assumed to have is unrealistically large. Nonetheless, it is not clear that this is
a problem. In the model, the housing patterns chosen by households are
determined by their budget constraints as well as their preferences. The
model is very careful to capture the way that credit constraints limit the
housing choices of young agents, and the way that pension programmes
affect disposable income through taxation. Since most of the model’s results
are driven by the way households respond to taxes and house prices when
they are credit constrained, it is likely that the results would change little if
different households took a different approach.
50 Coleman, 2007.

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7. NZ CONSUMER & SECTOR REFLECTIONS
7.1 This section presents the findings generated through the workshops with
various consumer and sector groups respectively.
Consumer Aspirations and Expectations
7.2 The way we envisage our housing futures is shaped by our personal
experiences, information, anxieties and desires today. It is also shaped by
current policy settings, funding and planning decisions. Housing is lived and
perceived, not just as a commodity, as a space to be used, or an asset, but
as a component of identity, a lifestyle and a connection to family and
community.
7.3 The consumer workshops considered that if today’s housing issues for all
ages are not addressed, desirable housing futures for older people will not be
realised. The best possible housing outcomes in future for older people will be
compromised. There was a view that today’s housing situation, with growing
housing unaffordability and questions about the continued viability of the
housing stock is neither sustainable nor desirable in the long term. Across
the workshops there was a growing sense of unease about housing and an
appetite for action to improve housing for all age groups. If current housing
problems are not resolved, the undesirable outcomes were seen to be urban
environments that fail older people, increasing isolation of older people,
compromised health and increasing inequalities between ‘haves’ and ‘have
nots’.
7.4 A wide range of current housing issues were identified in the workshops.
These are summarised as:
• The suitability of dwelling size and design;
• The need for affordable housing;
• The need for more residential options for older people;
• Problems with dwelling condition, performance and safety;
• The need for supports to enable older people to remain in their homes;
• A greater focus on good neighbourhood design and connectivity;
• The need for improved housing information and advice.
7.5 The strong desire to remain in their own homes, and other current housing
issues identified by the workshops were very similar to consumer
perspectives reported in the United Kingdom and Australia.51
Dwelling size and design
7.6 Increased dwelling size was highlighted as a key trend. However, this was not
necessarily seen as always a bad thing. The assumption that older people will
want to or need to downsize was questioned in several workshops where
participants commented that older people’s dwellings need to be at least two-
bedroom so that they can have family or whanau to stay, as well as live-in
carers if needed.
51 Croucher, 2008; Olsberg and Winter, 2005.

67
7.7 However, some in the 65+ age group also commented that it was difficult to
find suitable smaller homes in their areas, especially ones located close to
services. They reiterated that many older people want to remain in the area in
which they currently live, but may not be able to because there are no smaller
homes, or the cost differences between larger and smaller homes is not
great, so that it is uneconomic for them to downsize.
7.8 Workshops identified that housing design is a critical matter for some aged in
their 50s and 60s who are caregivers to older relatives. Those in that
situation, some of whom also have young dependents (including caring for
grandchildren), commented that housing needs to cater for the whole family in
its many shapes and forms, including people of all ages with disabilities.
7.9 Multi-generational households noted by Pacific, Chinese, Indian and Filipino
in particular as the usual and preferred way of living, are often difficult in New
Zealand houses that are not well set up for three-generation families. They
are not big enough to allow all individuals to have their own space. Having
only one kitchen and only one bathroom/toilet makes it difficult. Often
dwellings are not well set up for older people who have difficulty moving
around.
Dwelling size and design
I’m living in a 5 bedroom house, it’s too big, I can not find anything … I went to the council
and HNZC … I don’t want to move out of this area (65-70s).
[when retired] a small section, three bedroom home – you’ve got to when you’ve got kids like
we have! A brick home, low maintenance (50-55s).
Most houses are good for young people but not for old people. Need an ensuite bathroom …
ideal to have a granny flat, still independent but we still want to be useful to our family and
close together … houses are not set up for three generation. The biggest squabble is one
kitchen, one toilet. Very hard (Filipino workshop).
A lot of Pacific families still want their elderly. But houses are not set up for that. It doesn’t suit
their physical ailments. We need bigger houses (Pacific workshop).
Yes they need 2 bedrooms, maybe 3. They need autonomy … some places are too small for
kaumatua who want the mokopuna staying (Maori workshop).
Affordable housing
7.10 Home ownership is set to continue as highly desirable in future. All
workshops supported older people owning their own homes, and considered
that young people should be encouraged into home ownership. However,
home ownership is seen as a largely unachievable goal for some groups in
the population, increasingly difficult for young people and the rise in older
people who are not home owners is an acknowledged trend.
7.11 The Maori workshop noted that for Maori, home ownership is not just about
the physical dwelling, it is about whanau, a way of life and cultural values,
which are all interrelated. The Pacific workshop observed that a desire for and
sense of home ownership, and pride in their homes is part of ‘island’ culture.
The home is regarded as an asset to pass on to their children. Older Indian
people also considered their home as an asset for their younger generation.

68
7.12 Most of those in the 23-25 age group workshop saw home ownership as
achievable, regardless of current or future debt levels, and even though they
expected house prices to rise over time. They did not see debt as limiting
their choices.
7.13 Debt is something many young people are familiar with, given student loans
and the ease of gaining credit through credit cards. Although most of the
participants assumed they would own their own homes in the long-term,
house buying was not something everyone thought about in the present.
Education, career and lifestyle choices that preclude home ownership are
more prominent concerns. Another young person in the Pacific workshop
commented that young educated people expect to go overseas for a while.
7.14 Buying a home is envisaged in their late 30s or early 40s when they return to
New Zealand. At this stage, many young people see renting as enabling
freedom and flexibility in lifestyle. While the young people’s workshop
participants, in general, expected to own a home before retirement they
varied in their intended strategies to achieve that end point. Their strategies
ranged from saving, to investment (including in Kiwisaver), to moving
overseas to earn more, to marrying well.
Home ownership
Own a piece of turf (Pacific workshop)
Renting is like putting money down the drain (23-25s)
What really helped us to get into our home was being able to capitalise on the family benefit.
That’s what we need for our young ones I reckon. That was a really big help … it’s up to
them, but if they can not have that start like we had, it’s impossible (50-55s).
7.15 All consumer workshops identified unaffordable housing as a pressing issue
for both older home owners and renters. Several workshops noted the on-
going costs of running a home, such as power, rates, insurance and
maintenance. The Maori workshop reported that many older Maori are
struggling to meet their housing costs, whether it be the rent, or outgoings on
the home they own. Affordable rents for older tenants were identified as
needed by the Pacific, Filipino and Chinese workshops.
7.16 Most workshops also voiced uncertainty and anxiety about the current
economic situation, noting that people were experiencing their retirement
funds dwindling and loss of equity in housing. Employment prospects were
less certain. However, some in their 50s and 60s thought they would need to
keep working for longer than they had envisaged a few years ago, to save
enough for their retirement. These circumstances make planning for
retirement difficult. Participants in several workshops said they would like to
see more income and housing assistance given to wage earners and retired
people. There was a feeling that there is not much help for working families
struggling to get ahead.

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7.17 While reverse equity has been mooted as a solution to assist older people
with housing and other expenses, such as repairs, a great deal of caution was
expressed about such schemes. Many were unclear about how they
operated. Others were familiar with such schemes, but saw them as risky.
7.18 A lot of anxiety was expressed about current requirements and eligibility for
the Residential Care Subsidy. Participants knew little about asset limits, and
feared that their assets would be taken if they needed to enter rest home
care. For some ethnic groups (particularly Pacific, Chinese, Indian and
Filipino), this anxiety was linked to cultural practices of giving money and
assets to their children. To be in a situation where they were unable to pass
on their home and other assets to the next generation, was to them contrary
to their way of living.
7.19 A point also made was that units in most retirement villages are unaffordable
for older people with modest assets. Most of the consumer workshops noted
that more reasonably priced own-your-own and license to occupy units are
needed.
7.20 Workshops acknowledged an increasing number of older people needing
rental housing, which is likely to continue as younger cohorts of renters age.
Older new settlers are often in a position where they do not get any income
support from the New Zealand government because they have not lived in the
country long enough. Sometimes they have very modest pensions from their
home country. Consequently, their financial situation limits their housing
opportunities to renting.
7.21 The continued involvement of the public sector in providing affordable rentals
for older people was widely supported, although questioned by a few who do
not see housing as the business of councils. Support for public sector housing
is not only because people consider that such housing must be affordable,
but also because public providers are seen to have responsibilities to be
accessible and open to public accountability. For example, the Maori
workshop observed that councils divesting property management to council
owned companies or private property management companies, has meant
that older Maori tenants feel disempowered and believe they can no longer
talk to the council about their housing. The Chinese workshop considered that
both HNZC and council housing were preferred over private rentals because
they are seen to be more open to renting to older migrants as well as being
more affordable.
7.22 Given the likelihood in future that there will be more older renters, some
workshops suggested alternatives to home ownership that would
nevertheless provide older people with secure tenure. These options included
long-term rentals, co-housing, affordable license to occupy units and shared
ownership models.
7.23 Workshops identified strategies that families use to help their members with
housing expenses. The Pacific workshop commented that some Pacific
families share resources as a strategy for going into home ownership.
Examples include young couples living with parents to help the parents pay
off their mortgage. In other instances several family members pool incomes to
buy a home. Other workshop participants talked about assisting their adult
children into home ownership. It was noted that working age people face
commitments to both older and younger relatives that include support for

70
housing needs, which may impact on their ability to invest in their own
housing. The Pacific and Filipino workshops in particular observed that it is
common for New Zealand residents in their communities to send money
“home” to support older relatives. This may include purchasing a home for
those relatives.52
Housing affordability
Subsidies for rates are all very well except for the rigmarole to qualify. Subsidies ought to be
automatic and extend to all essential including gas, electricity, telephone, water and transport
(65-70s).
It’s pretty difficult preparing for retirement, with expenses for the kids now …I’m not expecting
the children to be at home in future, but who knows. A lot of people don’t have a lot of faith in
retirement funds these days, it’s quite a shock for my parents to see their retirement fund
dwindling …can we talk young people into putting their money away? Young people live for
today (50-55s).
It’s [reverse equity] like giving your freedom away, tying yourself up again. Family members
have been burned with it (50-55s).
What government can do to help increase home ownership, looking at young and middle
aged, assisting them so they won’t be reliant on government for housing when they are old
(Pacific workshop)
Residential options
7.24 In future there needs to be more options for older people’s housing. This was
a dominant theme identified in most consumer workshops. The ideal as many
workshop participants envisage, is that older people should be able to stay in
a safe, familiar environment for the duration of their lives and be able to
progress through independent living, supported living (e.g. retirement village
or rest home, co-housing, living with family), to hospital level care if needed.
More options for tenure were also considered desirable.
7.25 Residential options for older people are regarded as limited at present.
Whether this is because individuals are unaware of alternatives, or there are
regulatory, fiscal or policy constraints, is unclear.
7.26 One of the key uncertainties identified in all consumer workshops was the
willingness and ability of today’s young people to care for their elders in
future. For some older people and their families, living with family is the
preferred option, however this may not eventuate. While some groups
identified care for their elders, often within the same dwelling, as an important
cultural practice, this is not necessarily expected to continue in New Zealand.
Those from all ethnic backgrounds commented on the strong desire for older
people to exert their independence, which includes living in their own dwelling
if they wish.
52 See also James and Southwick, (forthcoming 2009), which cites research on the widespread Pacific
practice of remittances and gifting. There is some evidence that such redistribution of resources
increases with income. This suggests that younger Pacific people, as they enter higher earning levels
may experience greater demands on their incomes.

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7.27 Some workshops identified the importance of multi-generational households
for housing and support of older people. The Chinese workshop noted that
living in multi-generational households is common for new settlers and a
cultural norm. One factor influencing the decisions of older Chinese from the
People’s Republic of China, is the one-child policy53; the parents of only
children who have moved to New Zealand are highly likely to want to move to
New Zealand also, to live with those children. Older Chinese also prefer to
live with or close to family due to their lack of familiarity with English
language, with New Zealand systems, with New Zealand style housing, and
for social and financial support. Residing with family is likely to continue as a
preferred living arrangement for older Chinese settlers, at least in the medium
term.
7.28 It is also usual for older Filipino to live with their adult children’s families.
Many older Filipinos have come to New Zealand to be with their families and
to look after grandchildren. Many Pacific families also prefer to continue the
cultural tradition of having older relatives living with them.
Living with children
Ideally, when I am old I will live with my children. This is my hope, but my children may want
different (Chinese person).
Couples nowadays are busy with their work and career, who's got time to look after old
people? (Older Indian person).
We want to grow old with our children, in a self-contained unit with the family … when you’re
old, you want to be involved … I can not go back to the islands because my children are here.
I will go where they are (Pacific workshop).
7.29 Not all workshop participants would like to live with their children or be able to
do so. Instead there was a view that if they could no longer look after
themselves, they would want to go into some kind of supported living.
However, there was a general consensus across the consumer workshops
that there is currently a dearth of affordable and appropriate supported
housing for older people.
7.30 Several workshop participants consider that retirement villages and rest home
living can work well. They are ideal for people who want to move into a
smaller dwelling, and these places provide support, including medical
services, security and companionship. In some ways they are like a
neighbourhood.
7.31 The 65-70 age group workshop considered that more retirement villages and
rest homes with hospital facilities attached will be needed in future to meet a
growing demand. This is especially important for couples, because if one
partner needs hospital care, both can stay in the same complex. More co-
housing options like Abbeyfield will also be needed. Another idea raised in
the workshop is to develop smaller community facilities offering 24 hour care.
Instead of large rest homes, these places would cater for around seven
people in a house with live-in carers.
53 The one child policy was introduced in 1979, and most parents affected by the policy are under 60
years of age. Increasingly, this policy may affect the decisions of older Chinese considering New
Zealand as a settlement destination.

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7.32 Workshop participants pointed to the trend for people to enter rest homes at
an older age, when they are frail and needing more care. This raises demand
for rest homes to provide high level 24 hour care, and the associated need for
the future workforce to be appropriately qualified and experienced in higher
level care.
7.33 There was a common view among the new settler workshops that retirement
villages and rest homes need to get better at catering for people of different
cultural, ethnic and religious backgrounds. When older people can no longer
cope and need constant care, they need to be able to go to rest homes that
welcome people of different ethnic backgrounds, with staff who can speak
their language, and with suitable food. Those in the Chinese workshop talked
of older Chinese currently in rest homes who experience loneliness and
isolation. As a consequence, their cognitive abilities and health may
deteriorate more rapidly. The Indian workshop also talked of the need for a
rest home to include a wing for older Indian residents.
7.34 The rest home model is not preferred by Filipino. Currently the belief is that if
an older person goes to a rest home, they will die. Rest homes are seen as
separating older people from their families and communities. Although rest
homes provide for basic needs like food and shelter, it is not easy for them to
provide a sense of belonging and self-esteem. Typically if an older Filipino
person has to be in a rest home, they know no-one there and feel isolated.
7.35 The 65-70 and 50-55 age group workshops stressed the inappropriateness of
some retirement village design and locations. It was noted that these villages
are often isolated, and dominated by a narrow age range. They can end up
being a “waiting to die” community of old people. Others commented that rest
homes did not work well for those under 65 who, because of illness or
disability, found themselves in such accommodation because nothing else
was available.
Residential options
Many people may not be in a position to own their own, but still want security of tenure.
Ideally they should be able to stay in a family like environment … independent living, assisted
living, hospital care. More options interlinked with progressive needs … also community care,
intergenerational living and home-based support (65-70s)
House condition and performance
7.36 A number of workshop participants considered that the houses they currently
live in will not suit them as they get older, either because of the dwelling’s
location, or they would need modifications. Currently they live in homes with
stairs, and their bathrooms/toilet areas are not easy to access for people with
impaired mobility. Examples were also given of older people waiting months
for needs assessment. This is frustrating and upsetting for the elderly and
their families. It means that older people are living in their homes that they
cannot get around easily and which are potentially unsafe.

73
7.37 Participants were adamant that accessible, ‘barrier free’ dwellings are needed
now and in the future. Accessibility relates to moving around inside and
outside of the dwelling, safe bathroom use, moving between the inside and
outside and accessing cupboards and bookcases. Accessibility is important
both for the householders and for visitors. It was suggested that regulations
for accessible private dwellings (similar to those in the United Kingdom)
should be adopted in New Zealand. Standards should ensure that different
types of dwellings are suitable for older people who may have limited mobility.
Houses built for an ageing population can benefit everyone.
7.38 All consumer workshops commented on the importance of older people living
in warm, well insulated homes. The 50-55 age group workshop identified
good thermal performance and energy efficiency as essential for a warm
house that has free or low running costs. Critical requirements are orientation
to the sun and building materials that reduce energy and maintenance costs.
That workshop also suggested that public awareness of the importance of
home performance needs to be raised. Only if they are aware of its
importance, will consumers ask for products and design that can enhance
their home’s performance. Accordingly, the workshop advocated for better
documenting of home performance, such as the requirement in some
countries overseas for new houses to have an energy rating/performance
rating.
7.39 The Maori workshop commented that a major issue for Maori housing is to
increase repairs, maintenance and retrofitting of Maori homes. A clear
distinction was made between the housing experiences of older Maori living in
homes owned in general title, compared to a home that is in multiple-
ownership. An older Maori person who owns a house in general title faces
much the same repair and upkeep issues as any older person, such as being
able to afford repairs and being able to get a quality job done.
7.40 But in contrast, an older Maori person living in a house that is multiply-owned
faces issues that arise solely out of the unique system of administering and
managing that type of ownership structure. To make any decision about a
dwelling owned by many family members, including whether to do repairs or
install modifications needed for mobility, requires the agreement of owners.
Workshop participants said that there are many examples of essential home
repairs and maintenance not being done and of homes dilapidating, because
of the difficulties of negotiating agreements among multiple owners. The
workshop considered this issue to be widespread in Maori communities and
affects many whanau.
7.41 Comments were also made in the Chinese workshop about the need for
home repairs and maintenance services to help older people. Currently, the
problem of meeting the needs for repairs/maintenance was described as “a
nightmare”. One suggestion was for a home repairs and maintenance service
especially for older people.

74
House condition and performance
The legislation isn’t bad, but the building industry still does not value the thermal performance
of a home …my home to be dry and efficient so I can easily and cheaply stay warm when I'm
older (23-25s)
No one in charge, too many owners. No one wants to take responsibility …It takes a whole
day meeting … lots of whanau have this issue [needing home repairs] (Maori workshop)
No more leaky homes! Those systems have to work (Indian workshop)
There’s some terrible dumps around the place. People can not afford to do them up. Then
that’s all that’s available for the younger generation (50-55s)
Design and the energy side of things are important …The sort of house we would want in our
80s would require minimal heating and minimal running costs. Things that don’t need hard
work to run. Easy to maintain and affordable. (50-55s)
Home supports
7.42 Currently many older people access and appreciate home-based support
such as help with housework, personal care, gardening and lawns, and
meals. While the workshops considered that such supports are essential both
now and in the future to older people enjoying their homes and feeling safe in
them, participants also identified several issues that need addressing.
7.43 Those are:
• The Maori and Pacific workshops commented that many of their older
people are not accessing in-home support services. Older Maori do not
feel comfortable with workers coming into their homes whom they do not
know, and who do not understand Maori cultural practices. It was also
reported that older people and their whanau find it difficult to get through
the ‘red tape’ to access the service. Maori care workers have to work very
hard to connect up kaumatua and kuia to in-home support services. The
Pacific workshop also observed that older Pacific people and their families
do not know how to access in-home support.
• Older people with mental health problems have significant housing and
support needs that are not being met.
• There was a view in several of the consumer workshops that current
policies and procedures prevent family members from taking on the care
of their elders.
7.44 Workshop participants think that quality home-based care will continue to be
needed into the future. There is interest in maintaining community care
through facilitating intergenerational living and home-based support services.
However, there is already a shortage of caregivers. The care giving workforce
needs training and skill development and numbers increased.

75
Home supports
There seems to be an imbalance, government will spend on the rest home subsidy but what
about giving the family a carers payment? The family wants to look after the older person in
their home (Indian workshop).
Staying in your own home as you age keeps a sound mind especially with community and
family around to help (23-25s).
I’ll manage here as long as I can. I’m not that keen, but if I can not manage at home, a rest
home is the best option. I’d rather have all the home help stuff first and stay where I am. It’s
flat and not a lot of garden. Someone to help with the garden and mow the lawns (50-55s).
It’s important to get good flow between the community and kaumatua. Services need to
engage in that flow. We should be being serviced … there are huge waits for needs
assessment … he had to fend for himself (Maori workshop)
Neighbourhood design and connectivity
7.45 All workshops commented that it is important for older people’s homes to be
closely connected into their communities. In particular, the workshops
considered it highly desirable that all ages are able to live close together.
Most of the workshops expressed similar visions around intergenerational
living in small-scale environments, such as villages, neighbourhoods and
communities, where residents feel safe. Dwellings would be warm and
designed with features to assist personal mobility and safety. They would be
accessible to local amenities and services including health care services,
social services, shops, recreation and entertainment, public transport,
community gardens, informal meeting areas and venues and churches.
7.46 The 50-55 years age group workshop gave a high value to living where they
could easily access facilities and services now, in a built environment that has
a human scale. This human scale, with low buildings and streets that are not
too wide encourages interaction. These preferences would not change as
they aged, and for some would determine where they would live, e.g.
remaining in an urban area where they could get medical care easily. The
new settler workshops also commented that they were used to living in
settlements where interaction with family and neighbours was easy.
7.47 In the 65-70 age group workshop Germany was cited as an example of a
society with many intergenerational housing developments where older
people and families live in neighbourhoods together, although residents are
not necessarily related. That workshop thought that intergenerational living
may appeal to those young people with children who live at a distance from
their own parents, so that they have older people around for their children.
That workshop suggested that older people risked loneliness, isolation and
poor mental health if they could not access services and easily connect with
others.
7.48 The Chinese workshop also advocated intergenerational neighbourhoods,
with housing for older people close to younger families. They saw this as
enabling older people to live independently, but with help nearby. This type of
living environment provides companionship for older people and enables
them to actively contribute to the community, for example by helping young

76
families with childcare. The Filipino workshop envisaged a village type
neighbourhood of low-rise, medium density housing for all ages as a
desirable living environment. Older people would live in a small self contained
unit with help available from their surrounding family or others.
7.49 The Maori workshop agreed that homes for kaumatua and kuia need to be
located close to amenities, accessible to medical services and other essential
services and transport, and situated near whanau. Mixed ages in the
neighbourhood are important for older Maori to feel part of the community and
to get support but also to be independent. This workshop gave examples of
instances where no attention to planning for viable neighbourhoods has
resulted in poor housing for older people. It was the considered view of the
workshop that over the years government Maori housing schemes such as
papakainga housing have not worked because they were not designed for,
and consequently have not met the real needs and circumstances of older
people and their whanau. Dwellings have been poorly located at a distance
from facilities and they are too small for whanau to stay. There are instances
where the siting of such developments has resulted in difficulties attracting
tenants, where there have been tenancy management problems and where
dwellings have been demolished.
Neighbourhood design and connectivity
I envisage staying in my place after I retire because it's within walking distance to town and
on a bus route. It gives me exercise (50-55s)
Want good access to local and neighbourhood facilities … more community activities for older
people like community gardens … availability of free transport … you’ve got to live
somewhere where you feel safe (65-70s).
We don’t want younger people being scared of growing old, we want them to know they can
still be useful in their golden years … it’s planning for a whole village … what’s important is
how those places are planned – accessible to services and a mix of ages (Filipino workshop)
When you’re old you want to be involved, be close to your family (Pacific workshop).
Well connected apartment buildings of mixed ages … mini-communities with organised
neighbourhood events such as coffee mornings, progress dinners, BBQs, (50-55s)
Old people want to live close to services … Kaumatua don’t like to be divorced from their
whanau and vice versa (Maori workshop)
Housing information and advice
7.50 Access to information is important so people know their options. The
workshops said that older people and their families need more information
and advice about:
• Housing opportunities provided by HNZC and councils for older people.
• Sources of financial assistance and advice for housing, including
Accommodation Supplement, rates rebate schemes, home heating
subsidies, Residential Care Subsidy, reverse equity and family trusts.
• Products and designs to improve home performance and energy
efficiency.
• The range of services provided by retirement villages and rest homes,
including the different levels of care available.

77
• Assistance and advocacy to deal with on-going housing problems. For
example, one participant talked about tenants not knowing who to contact
about regular dumping of rubbish around HNZC flats. Also, tenants are
not sure who to ask about fixing repairs that are needed.
• Where and how to get modifications to improve accessibility of the home.
• Where and how to get home help and other services to enable an older
person to remain in their home. There was confusion about whether
caregivers could be paid to look after their own relatives.
• Older new settlers in the Pacific, Chinese, Indian and Filipino communities
need help in communicating with agencies. New settlers need information
about the types of housing and income assistance they are eligible for.
7.51 Several workshops suggested that many older people are too proud, shy, or
ashamed to ask for help. Agencies need to tailor their approach to be more
responsive to older people.
7.52 The 65-70 age group and the 50-55 age group workshops both commented
that architects and urban designers need education about older people’s
housing needs, including increasing their knowledge about dwelling
performance and urban design that promotes accessibility and connectivity.
7.53 The new settler workshops commented that the Asian communities are very
diverse and it is difficult to access detailed data and projections on ethnic
communities for planning purposes. Currently the available population
projections for the Asian population are not disaggregated for the different
Asian ethnic groups, such as Indian or Chinese.54
Information needs
It’s hard for [our parents] to communicate and they don’t feel confident (Chinese workshop).
His caregivers don’t know where to go for information about modifications. It’s hard, takes
time to access information. Language is a barrier. It needs to be easier for people to access
information … Pacific people don’t easily go and ask for things. They are shy, ashamed to do
that, especially if they haven’t been in New Zealand for long (Pacific workshop).
Aspirations and visions
7.54 All the consumer workshops shared common aspirations and visions. They
believed the future housing needs and wants of older people will be similar to
those of older people now. In future, as now, older people need and want
housing that is affordable, accessible, warm, safe and secure, and in the right
location (near amenities, their families, and friends).
7.55 Several key themes emerged in the consumer workshops. These formed the
basis for depicting a desired housing future for older people. The key themes
were:
54 After the workshop, enquiries were made to Statistics New Zealand about whether it is possible to get
population projections for specific Asian ethnic groups. Their reply was that these population projections
are not available, even in a specially customised form. While Statistics New Zealand acknowledge the
heterogeneity of the Asian populations, they advise that for smaller ethnic populations it is difficult to
derive robust measures of fertility and mortality and the other components of ethnic population change
to enable robust and reliable projections to be readily produced. There is a risk of misinforming people if
data is insufficiently robust. Statistics New Zealand says that it will continue to monitor this issue and
review whether it will develop population projections for smaller ethnic populations in future.

78
• Older people will be meaningfully involved in making decisions about their
housing. Older people and their families will have better information about
housing.
• Older people will have flexibility and choices about their housing. These
are choices around where they live, who they live with and how they live.
Flexibility and choice will enable older people to move from one type of
housing to another as their needs change, as well as to grow old and
remain in their communities if they wish. Different cultural preferences will
be accommodated.
• The public sector will continue to have a strong role in housing, but there
will be a much more strategic approach, with public, private, community
sectors and individuals all giving priority to and taking responsibilities for
older people’s housing.
• Housing will be affordable for all older people, regardless of their income
and assets. Older people on low incomes will be able to access
appropriate, affordable housing. This may be provided through assistance
to home owners for home running costs, income-related rents and social
housing specifically targeted to older people’s needs.
• Housing quality will be a key priority. New dwellings will be built to lifetime
design and environmental sustainability standards. Existing dwellings will
be upgraded to perform better for residents and to meet energy
standards. In some instances demolition of poorly performing and
dilapidated dwellings may be the most efficient solution.
• Housing services and other services for older people will be integrated
and focused on meeting individual needs.
• Older people will be connected to their neighbourhoods, communities and
services by infrastructure, planning and management that are focused on
developing vital and viable living environments.
7.56 Although strong similarities in future housing needs and wants were identified,
the consumer workshops emphasised that New Zealand’s older population is
diverse and will be increasingly so in future. Participants from new settler
communities and Pacific communities emphasised the cultural and ethnic
diversities of those communities, as well as the differences between members
of those communities whose families have lived in New Zealand for
generations, compared to recent migrants and their children. Those different
housing futures are outlined below.
New Settlers
7.57 Most participants in the new settlers workshop, regardless of their ages, saw
themselves as staying in New Zealand long term. There was a strong view in
the new settlers’ and Pacific workshops that they would retire in New
Zealand. New Zealand is where their children are. It is now home for them.
7.58 New settlers are more likely to be in rental accommodation, at least in the
short term. However, while new migrants in those communities may rely on
renting, home ownership rates among migrants do increase over time.55
While there is a strong cultural tradition and preference for older relatives to
live with their adult children, there is also an increasing demand for separate
accommodation for grandparents. This includes a demand for rental
accommodation for those older family members, and for rest home
55 Strategic Social Policy Group, 2008: 93-95.

79
accommodation tailored to their cultural preferences. Furthermore, older new
settlers need help with communication and accessing services.
7.59 New settlers of all ages acknowledge some older people wish to live in
separate dwellings to their children, and that succeeding generations may
prefer lifestyles that do not involve living in the same dwelling with relatives.
However, there is a strong preference for intergenerational neighbourhoods
well linked to facilities and services.
Pacific
7.60 The Pacific workshop articulated a vision to increase home ownership among
Pacific people. However, it was acknowledged that big changes would be
needed to increase Pacific homeownership. Given the present low level of
home ownership among the Pacific population, the expected view is that in
future, many older Pacific people will continue to live with family and/or rent –
they will not be home owners nor are their extended families likely to be in
owner occupied dwellings. .
7.61 The Pacific workshop thought that attitudes and expectations among young
Pacific people are changing; they may not expect nor want their children to
look after them in old age. It was acknowledged that the future housing
scenario for educated young Pacific people, who expect good jobs and high
salaries and will be able to enter home ownership, is very different to the
likely housing futures of Pacific young people without educational
qualifications. There is a concern that many Pacific young people today are
struggling, and will not have the resources to look after their old people.
Maori
7.62 As an overarching principle, the workshop acknowledged the important role of
kaumatua and kuia, and the responsibility of younger generations to their
older people.
7.63 The workshop emphasised that Maori society is changing, which will affect
the demand for housing in future:
 More Maori are reaching old age, and the mokopuna of today will have a
greater life expectancy. In future there will be a larger group of retired
Maori.
 Maori are having fewer children. It is not a given that young people will
look after their kaumatua and kuia in future, but they have the potential to.
7.64 The Maori workshop specifically reaffirmed that there is an issue with Maori
housing, and it needs to be addressed. Fundamental to addressing the
housing issues facing Maori, is to consider the implications of multiple land
ownership structures in current and future policy and planning for Maori
housing. The workshop also believed that a shift in mindset is needed among
whanau, so that repairs and maintenance become important actions for
preserving housing assets for the future.
7.65 Already a number of iwi have invested in housing, including investment in
retirement villages. Treaty settlements could be used for future housing
development, however, iwi capital and land needs to be protected. Any
proposals for housing developments would be judged on their financial
viability and their ability to meet demonstrated need in the community.

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65-70 Age Group
7.66 This age group wants housing for older people to:
• Encompass a wide range of options including supportive living,
intergenerational housing and facilities with hospital care.
• Be accessible. More ‘barrier free’ dwellings are needed now and in the
future.
• Have good access to local and neighbourhood facilities.
• Be affordable, with more modestly priced own-your-own smaller dwellings.
• Have security of tenure.
• Include quality home-based care.
• Provide a safe home and neighbourhood environment.
50-55 Age Group
7.67 This age group considered that the housing aspirations of their
contemporaries are hugely diverse, although there are some common
themes. In summary those are:
• Those in their 50s have different values and life experiences to current
retirees. They are rights focused, willing to be assertive and will take this
approach into retirement.
• Housing needs in their younger retirement years are much the same as
currently, including the ability to accommodate children, grandchildren and
visitors, space for hobbies, a garden and outdoor living. Downsizing is
more likely to involve reducing the size of the section, rather than the size
of the home. Most expect to remain in their current home as long as
possible.
• There is general agreement that people’s housing needs are likely to
change as they move into their 80s and beyond. That transition, however,
is not age defined. It may be because of a major health event (e.g., a
stroke) or a change in circumstances (e.g., widowhood) or in abilities
(e.g., managing the home and garden, or maintaining a driver’s licence).
While some may downsize at this stage, some might move into retirement
villages or rest-homes.
• People need to plan ahead for housing transitions that may be needed
otherwise decisions may be made on their behalf.
• Dwelling design and performance elements that result in a low
maintenance, easily accessible, warm house that has free or low running
costs are critical considerations in housing decisions.
• Preferred neighbourhoods are those that that encourage walking, are
close to amenities and services, and enhance personal relationships with
family and friends.
• There are anxieties about having enough income in retirement, and the
affordability of health care. It is expected that fewer people will be
reaching retirement age debt free.
7.68 This workshop thought that those currently in middle age would in future be
interested in shared living options to reduce their costs such as flatting
households, taking in boarders, and shared home ownership. The creation of
a community of family and friends living in close proximity was also seen as
important.

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Housing futures for young people
7.69 Many workshop participants felt that it is hard to know what types of housing
young people will need or want in the future, and doubted that many young
people have given their own future housing needs much thought.
7.70 Participants of all ethnic groups thought that young people in their 20s and
30s today have different life experiences and expectations than their elders,
and consequently are likely to want and expect different housing. Some key
aspects that may be different for today’s young people when they are 65 and
older were identified:
• Today’s young people have higher consumption and space requirements
than their elders, which will affect the type of housing they want as they
age.
• Some young people are more interested in renting rather than buying. By
choice they may reach 65 without owning a home.
• There are fewer supports for young people to get into home ownership,
compared to the home ownership schemes available when today’s 50s-
60s were young.
• Family dynamics will be different. Young people might have children later
or no children. In retirement, those with children may not want to live with
their children.
• The global dispersal of families may result in older people in future relying
more on others (non-family) and the state.
• Today’s young people may look overseas for their retirement housing
needs. Even now retirement villages are being built in India for South
Africans, Canadians etc. New Zealand is regarded as relatively safe so
others might migrate here to retire in future.
7.71 The young people who participated in workshops mainly expected to own
their own homes. What they wanted in a home when they are in their 60s and
70s varied, however in many respects their preferences were similar to those
identified by people in their 50s, and those 65+. Some young people
emphasised the importance of the living environment, such as quietness,
away from the city or at the beach. Others mentioned suitable size and
design, including an expectation they would be looking for a smaller house
and section. Often associated with design was a desire for a dwelling that is
secure, easily managed and maintained. There was also a desire for living
close to recreational amenities, shops, public transport and family.
7.72 Not surprisingly, it was difficult for the young workshop participants to think
about their housing needs when they reached 75 years or more. Some used
the experience of their grandparents to imagine their possible future needs.
Some assumed, given good health, that they would be in their own homes
(not necessarily a different home from that they lived in when they were
younger) while others imagined they would need to make a move to
something smaller and possibly supported. Personal factors such as whether
they would have partners or owned their own home would also shape their
likely housing choices.

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Enabling Optimal Response: consumer workshop views
7.73 There was a general view in the consumer workshops that older people’s
housing is the responsibility of the whole community. It should be led by the
community and widely involve people from all ethnic groups in discussion of
what is needed. None of the consumer workshops considered it to be solely
the responsibility of the public sector (government or councils) to provide
housing for older people. However, it was widely considered that there is
some need for government assistance and there are important leadership
roles and resources that both central and local government can provide to
assist in developing desirable housing futures for older people. These include:
• Role of central government:
• Successive governments agree on and implement a common,
collaborative approach to the provision of affordable housing. This
would give people more certainty and security about their housing.
• Continued income support for older people, particularly to ensure that
those who need financial assistance can get it. Income assistance for
home maintenance and home running costs, including subsidies for
essentials such as rates, power, telephone, water and transport.
• Continued requirements and schemes for the working age population
to save.
• Continued state assistance for healthcare.
• Affordable housing initiatives for older people.
• Assistance and incentives to increase home ownership, particularly
among young people and groups with low rates of home ownership.
• Assistance and support for community groups to establish housing for
older people.
• Continued assistance and supports for older people to remain in their
own homes.
• Ensure that the housing stock meets acceptable quality and
performance standards.
• Education of architects and urban designers to ensure better home
performance and urban design that promotes accessibility and
connectivity.
• Provision of information to consumers about how to look after their
homes and get them to perform well.
• Role of councils:
• Ensure that there is appropriate infrastructure to help people stay in
their homes and communities. This includes planning for facilities and
services that older people can easily access, including neighbourhood
centres.
• Plan for and encourage the development of supported living.
• Allow through district plans smaller dwellings, smaller sections and
medium density housing.
• Assisting householders, through streamlined consents processes and
provision of information, to get needed modifications to their homes to
help mobility.
• Public-private partnerships:
• Central and local government, non-profit and community involvement
in the establishment and running of retirement villages. Affordable
supported living in retirement village type environments was seen as a
particular gap in the market.
• Individuals and families can:

83
• Increase their opportunities for earning a good income through
achieving educational qualifications.
• Save for home ownership and retirement.
• Pool resources to enter home ownership.
Sector Workshop Responses to an Ageing Population
7.74 Across the sector workshops, the following changes were identified as
needing to happen to ensure good housing for the ageing population in future:
• Making older people’s housing a strategic priority
• Improved housing affordability for older people
• Improved house performance, design and accessibility
• A greater range of housing options
• Improving the responsiveness of the rental market
• Improved information
• Improved agency working together
• Improved knowledge base for policy and practice.
Making older people’s housing a strategic priority
7.75 The housing provider, residential building and older people’s services
workshops noted that currently there is a lack of a coherent and coordinated
approach to housing. A strategic approach to planning for and implementing
housing for older people is needed.
7.76 The housing provider workshop advocated for a collective vision to shape
housing policy and provision. That workshop considered there is little or no
integration between housing strategies at regional and local levels. There
needs to be more alignment between strategies, which requires people
talking to each other within and between agencies and between them and the
private and community sectors.
7.77 The residential building workshop also considered that currently housing
lacks priority. There is no clear responsibility or ‘whole of government’
approach to thinking strategically about housing. The idea of a ‘housing
champion’ was mooted to ensure housing is a key priority, the critical issues
are identified and strategies developed to address issues at a local level.
7.78 The older people’s services workshop would like to see one government
agency taking responsibility for older people’s housing and giving it a key
priority. That workshop would like the profile and importance of older people’s
housing raised in the New Zealand Housing Strategy.
Improved housing affordability for older people
7.79 All the sector workshops considered that housing affordability is a critical
issue facing New Zealanders as they age.
7.80 The older people’s services workshop commented that, in working with their
clients, they find that current housing and income support policies do not
match up with the diverse financial circumstances among the older
population. Increasingly older people have mortgages, which reduces their
disposable income. The number of older people renting is increasing. The
number of older single people (whether they have never been married, or are
divorced, or widowed) is also increasing, and their financial situations are

84
likely to be restricted. Many older people cannot afford to go into supported
living arrangements such as retirement village housing. In some areas, older
people cannot afford to downsize because of insufficient equity in their current
home.
7.81 The housing provider workshop identified affordability as a challenging issue
for the housing sector. Some of those retiring now have lost income as a
consequence of the economic downturn. Although there are home equity
release schemes available, up-take is low. The cost of maintaining housing,
paying rates and other on-going costs places an onus on people in
retirement. Many retired are asset rich but cash poor. Housing affordability
will continue to be a critical issue for younger generations as they age.
Today’s young people may never save the deposit necessary to enter home
ownership. Kiwisaver is potentially important for enabling young people to
move into home ownership.
7.82 The housing provider workshop was adamant that quality should not be
reduced to keep housing costs down. Housing quality needs to be maintained
as poor housing creates costs elsewhere, such as in higher demands on
health services.
7.83 Policy and funding issues that need to be addressed are:
• Currently there are few ‘not for profit’ providers that can provide units for
those of modest means.
• The rental market needs to be affordable, and to offer secure tenure for
older tenants.
• Reverse equity is not widely understood among older people. Although it
is one option that should be available, older people need to be better
informed about the costs, risks and implications.
Improved house performance, design and accessibility
7.84 All sector workshops focused on the need to improve house performance,
design and accessibility.
7.85 Many of the homes of the future already exist. However, the workshops
observed that the condition of some housing stock is declining. Overall, New
Zealand’s housing stock is old or poorly built and needs retrofitting. Heating
and insulation is poor. The residential building workshop considered that often
housing is perceived solely as an investment and other functions such as
basic shelter requirements are ignored. Consequently, the need to ensure
housing performs well throughout the lifespan is accorded little importance.
This needs to change; there needs to be a switch in priorities as people age
as home performance is essential to their health.
7.86 The residential building workshop commented that the capacity of people to
be able maintain their homes over time is unknown. Many modern homes are
not built to a high quality standard and are not designed for ‘do-it-yourself’
home maintenance. As maintenance has to be done professionally there are
implications for the ability of home owners of all ages to maintain their homes
themselves. The housing provider workshop considered that there could be
more integration between social, community and private housing providers
and consumers to achieve better home maintenance services for older
people. Larger organisations could co-ordinate a pool of pre-approved,

85
qualified trades people that a range of organisations and individuals could
access (e.g., property managers, HNZC, older people).
7.87 All the sector workshops suggested that those commissioning new homes will
need to incorporate lifetime design so that residents can remain for as long as
possible in a dwelling that can be easily reconfigured to adapt to their
changing needs. Design elements that make a house suitable for older
people can still be appealing to younger people (e.g. wet area showers are
both fashionable and accessible). Those building new homes or undertaking
renovations should prioritise home performance modifications such as
heating and insulation. The older people’s services workshop would like to
see universal design standards adopted for all new housing and those making
renovations encouraged to include universal design.
7.88 The residential building workshop considered that climate change, with a
hotter, drier, wetter, windier climate predicted, and increasing energy costs
are expected to drive the development of better performing homes that
decrease running costs including energy costs.
7.89 Policy and funding issues that need to be addressed are:
• Problems with current funding regimes for modifications.
• Currently many older people are unaware of assistance they may be able
to access to fund repairs and maintenance.
• Accessibility and environmental sustainability standards need to be
developed for private dwellings.
A greater range of housing options
7.90 The sector workshops pointed out that older people want a range of housing
choices as they age, including continuing to live in their own homes as long
as possible, living in multi-generational households, supported living and
neighbourhoods with mixed ages. Housing needs will vary across the older
population, being affected by health and disability needs, cultural background,
family circumstances and individual preferences.
7.91 The older people’s services and policy workshops considered that currently
choices are limited and the accommodation people move into when they get
older isn’t necessarily what they would like but what is available.
7.92 The housing provider workshop pointed out that there are some general
principles to guide housing development. For instance, as people age, there
will be a demand for compact single level and low maintenance dwellings,
located near their families and near amenities like shops, health services and
public transport.
7.93 The sector workshops agreed that:
• There are mixed expectations regarding the size of dwellings. Those
involved in the retirement village industry commented that older people
don’t necessarily want to shift to a smaller house. The size of residential
units has increased in response to changing demand, with larger units (2-
3 bedroom units with a garage) more sought after. Often it is difficult to
sell the smaller units. However, it was also expected that there will also
be a greater demand for more small dwellings suitable for older residents.
• Some homes need to be designed for multi-generational living.

86
• Neighbourhood design needs to be improved to ensure older people are
connected to services. Increasingly, retirement villages will need to
connect to neighbourhoods as residents do not want to be isolated from
their communities.
• Medium density housing may suit some older people. However, one
workshop warned that medium density housing is not well understood by
the public and there is concern about design of these dwellings and
settlements. Such developments need to be well designed.
• Opportunities for brown fields development need to be taken up.
• The need for in-home supports is likely to increase as the older population
increases.
• There is a growing demand for retirement villages to provide for a wider
range of needs, including provision of intensive care facilities.
Improving the responsiveness of the rental market
7.94 All the sector workshops considered that more rental options will be needed
as in future renting becomes a lifetime necessity or choice for an increasing
number of people.
7.95 The residential building and housing provider workshops both raised the need
for the respective roles of government, landlords, and councils in rental
housing provision for older people to be clearly articulated and implemented.
The housing provider workshop commented that councils may be expected to
have a role in helping people into appropriate housing, although a general
desire for councils to ‘get back to basics’ was noted.
7.96 Key issues identified were:
• Landlords with older tenants will have to provide for their particular
requirements, such as accessibility features, a warm dwelling, a home
that is affordable and cheap to run, and the need for long-term tenancy.
Older people are also likely to be limited in their ability to carry out home
maintenance tasks.
• There is likely to be an increase in demand for particular rental properties
that the private sector is reluctant to provide, such as to older people with
physical disabilities, or with mental health problems. Social housing
agencies and community housing providers need to be able to continue to
rent from private landlords who may not be willing to let their places
directly to those tenants. These sorts of arrangements provide security of
tenure for the tenants and appeals to landlords who want to limit their
interaction with tenants.
• The demand for longer leases will increase. Currently, most landlords are
reluctant to sign up for over 1-2 years as they are typically in the property
business for the capital gains available and want to be able to sell when
prices increase. Other countries such as Australia provide some useful
models for incentives to landlords. Incentives for landlords to provide long-
term tenancies could include:
• Packaging up groups of houses as investment parcels that enable
smaller investors to be part of a collective investment.
• Tax incentives because investors in the rental property market are
motivated by tax reductions.

87
Improved Information
7.97 All sector workshops commented that there are information gaps that need to
be filled to enable the ageing population to better meet their own housing
needs. Currently there is confusion about the range of organisations with a
role in housing and their respective roles. This makes it difficult for those
seeking information about older people’s housing. More comprehensive,
easily understood and accessible information on housing services, income
support and other services related to older people ageing in place is needed.
The housing provider workshop suggested a ‘one-stop-shop’ where older
people can get information about where to access help. The workshops
considered that older people need information about financial options such as
trusts and equity releasing and Government assistance to improve the
performance of their homes. The older people’s services workshop suggested
that education of architects, designers and planners is needed so that they
better understand older people’s housing preferences and needs.
Improved agency working together
7.98 The older people’s services and policy workshops observed that currently
services for older people, including housing services, are fragmented and
need to be delivered more holistically. The sector workshops identified ways
that sectors can work together more effectively:
• Share information through networking better.
• Agencies need to be aware of how their staff turnover impacts on their
ability to communicate with others and take steps to manage this better.
• Within agencies, policy and operations should talk to one another more.
Similarly, national offices should talk to regions.
• Improve information and understanding about the range of organisations
that work with older people, and their roles.
• Look for opportunities to work with the private sector, such as private
developers.
Improved knowledge base for policy and practice
7.99 The sector workshops suggested ways that New Zealand’s knowledge base
could be extended and improved by finding out about best practice and what
works well in other countries. Successful models can be examined to see how
they can be made to work here. For example, Enable NZ is considering how
to use a checklist widely used in England. The point was made that New
Zealand can learn from how countries with older age profiles are already
responding to their changing population. However, it was also noted that New
Zealand’s central and local government structures and housing markets differ
from those in other countries. Overseas models cannot be unthinkingly
adopted here.
7.100 Some research and information needs were identified including:
• More information on ethnic population projections, including to 2051 is
needed as this is a growing section of the population that little is currently
known about.
• How can the current housing stock be improved to meet the needs of an
ageing population?
• What are the housing affordability issues affecting older people?
• How can the market address quality issues?

88
8. AGEING SOCIETIES & HOUSING: INTERNATIONAL
RESPONSE
8.1 New Zealand is not alone in experiencing an ageing population structure.
Most European nations, Great Britain, Australia, Canada, Japan and the
United States of America have population structures that are ageing. Indeed,
many of those countries have population structures that are considerably
older in profile than New Zealand. In this section, we:
• Briefly comment on how ‘old age’ and ‘ageing populations’ are defined.
• Place New Zealand’s ageing population structure within the global
context.
• Describe the international housing response to ageing populations.
8.2 The last of those discussions focuses on major trends and approaches to
improving older people’s housing. Particular attention is paid to the United
Kingdom, the United States, Australia, Canada, Finland and Japan as
countries providing some examples in which older people’s housing delivery
and its co-ordination with other key sectors can be improved.
Defining Ageing
8.3 Before commenting on the dynamics between ageing populations and
housing, it needs to be noted that the concept of ageing itself is culturally
bound. Definitions of ageing, and the categorisation of 'old age', vary from
country to country. Some countries measure old age in terms of years while
others use cognitive and/or function measures to assign people to the
category of 'old age' or 'elderly' or 'older person'. Indeed, there have been
some suggestions that chronology (age measured in years) is largely
irrelevant and will become more so as people live longer, and continue to be
active for more years.56
8.4 The United Nations has developed a two-tier taxonomy to define ‘old age’.
The United Nations taxonomy defines those aged 60-79 years as ‘seniors’.
Those people aged 80 years or more are described, rather clumsily as the
'oldest old'. By way of contrast, the European Commission considers only
those people aged 65 years or more as falling within the category of older
people. This is in alignment with New Zealand definitions of ‘old age’ which
tend to be tied to eligibility for New Zealand Superannuation.
8.5 The definition of ‘old age’ is only one aspect of the contingent nature of
population ageing. There is also considerable diversity around the definition of
what is an ageing population or population structure. In Europe, for instance,
some countries define an ageing population as one in which 14 percent or
more of the total population is 65 years or more. Others have begun to define
an ageing population as one in which at least 20 percent of the population is
65 years or more. The latter has more or less become the benchmark in the
European Community.57
56 National Advisory Council on Ageing, 1999.
57 Commission of the European Countries, 2005.

89
Ageing Populations Internationally
8.6 Table 8.1 compares New Zealand’s population with European countries,
Australia, North America, and Japan. That data makes clear how
comparatively older the European and Japanese populations are relative to
the New Zealand populations. This Table also highlights the profound impact
an ageing population structure can have on a society.
8.7 It is notable, for instance, that the projections for Europe suggest that the total
population in Europe will increase gradually until 2040 but the population will
decrease after 2050, albeit still with around 10 million people more than in
2008. That net increase in population is, however, projected to be
concentrated in a few countries. Eleven of the twenty-nine European
countries set out in Table 8.1 are projected to have lower populations in 2050
than they do in 2008. Table 8.2 indicates that many of those will experience
significant increases in the old age dependency ratio.
Table 8.1: Ageing Population Indicators for Selected Countries58
Total Population
(000s) Dependency ratio 2050
Country
2008 2050 Total Old Age
Young
Age
Median
Age 2050
% 2050
Population
65 yrs &
over
Australasia
New Zealand 4143.3^ 5349 66.9 38.5 28.5 43.1 23.0
Australia 19855.3^ 28724 67.0 37.5 29.5 42.9 22.4
North America
Canada 31612.89^ 44414 68.4 40.9 27.5 45.2 24.3
USA 304059.7** 403932 65.6 34.9 30.7 41.7 21.1
Europe
Belgium 10656.2 12193.9 70.69 43.87 26.82 44.7 25.70
Bulgaria 7642.2 5923.4 77.32 55.44 21.88 49.5 31.26
Czech
Republic 10345.9 9891.9 77.14 54.81 22.33 46.2 30.94
Denmark 5475.8 5895.1 68.79 41.31 27.48 43.6 24.47
Germany 82179.1 74491.4 77.97 56.43 21.54 51.7 31.71
Estonia 1338.6 1181.4 72.11 47.19 24.91 43.0 27.42
Ireland 4414.8 6530.6 70.16 40.40 29.77 43.3 23.74
Greece 11216.7 11445.3 80.68 56.99 23.69 49.5 31.54
Spain 45283.3 53229.0 82.79 58.69 24.10 48.2 32.11
Metropolitan
France 61875.8 71044.5 74.40 44.68 29.72 44.8* 25.62
58 Giannakouris, 2008.

90
Italy 59529.0 61239.9 81.58 59.24 22.34 50.5 32.62
Cyprus 794.6 1251.5 62.07 37.65 24.42 44.4 23.23
Latvia 2269.1 1803.5 73.02 51.18 21.84 46.1 29.58
Lithuania 3365.4 2736.9 72.22 51.13 21.09 47.5 29.69
Luxemburg 482.2 697.2 64.46 37.82 26.64 42.1 22.99
Hungary 10045.4 9061.1 73.19 50.83 22.36 46.6 29.35
Malta 410.5 414.8 71.28 49.77 21.52 50.5 29.05
Netherlands 16404.3 16909.5 71.17 45.61 25.56 44.6 26.65
Austria 8334.3 9127.5 71.52 48.31 23.21 48.5 28.17
Poland 38115.6 33274.7 76.05 55.69 20.36 51.0 31.63
Portugal 10617.4 11448.6 75.82 52.96 22.86 50.4 30.12
Romania 21423.4 18149.2 74.61 54.00 20.61 49.5 30.93
Slovenia 2022.6 1878.0 82.74 59.40 23.34 48.7 32.50
Slovakia 5398.8 4859.1 75.33 55.46 19.87 49.5 31.63
Finland 5299.8 5448.4 73.89 46.61 27.28 44.8 26.81
Sweden 9182.9 10671.5 69.54 41.91 27.63 43.2 24.72
United
Kingdom 61270.3 74505.8 65.40 37.96 27.44 42.5 22.95
Norway 4737.2 5897.5 69.84 41.43 28.41 43.7 24.39
Switzerland 7591.4 9096.3 69.44 45.74 23.70 44.9 27.00
Asia
Japan 127768+ 101659 95.8 71.3 24.5 55.1 36.4
* this figure is for all of France ^ based on 2006 census figure +based on 2005 census figure
** 2008 population estimate
Table 8.2: Old Age Dependency ratios in European Countries by Population Change59
Country Population Change Old Age Dependency ratio
2008
Old Age Dependency ratio
2050
Lower Populations in 2050
Bulgaria 24.99 55.44
Czech Republic 20.59 54.81
Germany 30.29 56.43
Estonia 25.23 47.19
Latvia 25.02 51.18
Lithuania 23.02 51.13
Hungary 23.50 50.83
Poland 18.95 55.69
Romania 21.34 54.00
Slovenia 22.97 59.40
Slovakia 16.58 55.46
59 Giannakouris, 2008.

91
Country Population Change Old Age Dependency ratio
2008
Old Age Dependency ratio
2050
Higher Populations in 2050
Belgium 25.80 43.87
Denmark 23.61 41.31
Ireland 16.31 40.40
Spain 24.15 58.69
Metropolitan France 25.33 44.68
Cyprus 17.69 37.65
Luxemburg 20.92 37.82
Malta 19.79 49.77
Netherlands 21.84 45.61
Austria 25.43 48.31
Portugal 25.91 52.96
Finland 24.80 46.61
Sweden 26.66 41.91
United Kingdom 24.27 37.96
Norway 22.10 41.43
Switzerland 24.10 45.74
International Housing Responses to Ageing Populations
8.8 In the international context, New Zealand is effectively following the
demographic pathway of many societies. It is, therefore, in the enviable
position of being able to learn from other countries’ responses to the
challenges of an ageing population structure. Many countries with ageing
population structures are actively examining their labour market policies,
health provision, and income policies. Responses in those sectors have and
will continue to have flow on effects on the housing sector. The focus of the
remainder of this discussion, however, is on the emerging international trends
within the housing sector to ageing population structures.
8.9 While there is considerable diversity internationally, four major trends can be
distinguished. They are:
• A focus on improved cross-sectoral co-ordination and interface;
• Initiatives to improve the performance and amenity of older people’s
existing dwellings;
• Initiatives directed to improving the performance and adaptability of new
dwellings across the full life-cycle;
• Initiatives to improve the security and affordability of housing for older
people.
8.10 In addition, there is also an emerging trend for the housing needs of older
people to be addressed within the context of neighbourhood and city
planning, connectivity and service provision.
Cross-sectoral co-ordination
8.11 The agenda for cross-sectoral co-ordination is manifest in the policy of ageing
in place evident in many international jurisdictions. At the heart of that policy
are two drivers:
• Firstly, it recognises that service provision for older people needs to be
multi-pronged, carefully layered and comprehensive if older people are to
optimise their independence.

92
• Second, it also recognises that older people’s dwellings and
neighbourhoods need to provide an environment that is amenable to
supporting older people’s changing needs. That is, that there is a
profound interface between older people’s social, health and welfare
provision and the amenities provided by their dwellings, neighbourhoods
and cities. Moreover, that that interface must be actively managed and co-
ordinated.
8.12 The recognition of the interface between health, care, support and housing is
relatively recent. But it is an inevitable outcome of the international trend
towards providing health and disability services for older people in their
homes rather than in institutional hospital or rest-home settings.
8.13 The health and disability sectors have seen a radical transformation in care
priorities, paradigms and care regimes over the last three decades. Those
changes have been prompted by new views about human capability,
independence and care.60 They have also been prompted by desire to reduce
the fiscal liabilities, particularly for the state, of providing care for people
needing support for everyday living in institutional environments.
8.14 Essentially, those changes have seen a decoupling of older people’s care
from the provision of accommodation in the form of non-private residential
care. The outcome of that decoupling, however, has been the private home
becoming the setting for health, disability and everyday living care.
8.15 Under those conditions, a number of countries have now recognised that if
care is to be provided within the home, then the quality and performance of
the home becomes critical to the health outcomes of older people. If care can
not be adequately provided in the home, then, older people are likely to move
in higher dependency environments. If dwellings perform poorly then older
people’s care and health needs increase.61
8.16 The provision of home-based care has highlighted the importance of better
co-ordination and integration between the health, welfare and housing
sectors. The challenge of better inter-sectoral co-ordination and the problems
arising from poor inter-sectoral co-ordination have been longstanding themes
in practice and research around ageing in place and older people’s futures
internationally.62 A number of countries have, consequently, sought to
establish services dedicated to better co-ordination between housing, health,
care and welfare services.
8.17 The most recent strategic response to this problem of inter-sectoral
integration and co-ordination is found in the United Kingdom’s national
strategy for housing in an ageing society released in February 2008.63 That
strategy explicitly conceives of health, social support and housing in a
‘triangle of independence’ represented in Figure 8.1.64
60 Saville-Smith, et.al., 2007.
61 Gaugler et.al., 2007; Bebbington, Darton, and Netton, 2001; Netton, Darton, and Curtis, 2001.
62 Communities and Local Government, 2008.
63 Ibid.
64 Ibid.

93
Figure 8.1: Triangle for Independence – 2008 UK National Strategy for Housing in an
Ageing Society
Housing services Social services
Social
Support
Enabling
Environm ent
Active
Living
Good
Health
Health services
8.18 The UK National Strategy for Housing in an Ageing Society highlights two
critical problems:
• The complexity of the inter-sectoral interface makes arranging and
providing adequate support across sectors complex for older people
themselves, their families, and practitioners working with older people in
each of those sectors.
• That housing has not been given adequate priority and has suffered from
“separate decision-making, reactive approaches, and failure to prioritise
the housing role in community care.”65
8.19 In addressing the problem of integration and co-ordination, the strategy
identifies three developments to be implemented in the United Kingdom which
are intended to promote the importance of housing in the housing, health and
care mix. They are:
• Joint commissioning;
• Implementation of health impact assessments; and
• Joint assessment.
8.20 Infobox 8.1 sets out the key focus and characteristics of each of those three
developments.
65 ibid: 124.

94
Infobox 8.1: Integrative and Co-ordination Instruments for Older People’s Housing,
Health and Social Support in the United Kingdom 200866
Instrument Statutory Partners Activities Outcomes
Joint Commissioning
 NHS
 Local
authorities67
 Joint strategic needs
assessment
 Joint funding
 Joint delivery
purchase
Older people have
more effective
integrated access to
and choice in housing,
health and care
services.
Impact Assessment
 Local authorities
 Housing
providers
 Public Health
services
 Care services
 Application of
evaluative
techniques to assess
net benefits of new
and existing services
and service
configurations
Impact of housing,
health and care
service changes on
older people’s health
outcomes evaluated
and improved
decision-making.
Joint Assessment
Local & national
agencies in:
 Housing
 Health
 Care
 Activate local area
agreements
 Integration of
housing into a
common assessment
framework
 Implementation of a
single assessment
process
Improved housing
assessment and
response.
Improved Existing Dwelling Performance and Amenities
8.21 It has been recognised internationally that housing stock that is dilapidated
and/or has low levels of performance has considerable externalised costs.
Such dwellings are likely to be cold, uncomfortable and unsafe. They are
associated with fuel poverty, ill-health, neighbourhood decline, dependency
and negative environmental impacts.
8.22 Overseas there is considerable research to show that poor housing stock:
• places at risk the value of previous private and public investment in the
national infrastructure
• is a major impediment to sustainability
• reduces the energy efficiency of the stock with associated excessive
demand for energy and/or fuel poverty problems
• risks the long-run degradation of stock functionality
• generates poor health, safety, educational and human capital outcomes,
the costs of which are not confined to the individuals who live in poor
housing
• is likely to expose governments to the costs of the poor social,
environmental and health outcomes associated with poor housing
condition
• increases the pressure to fund or provide social housing or, in the case of
older people, residential care
66 Adapted from Leather, 2000:18.
67 In the United Kingdom local authorities have responsibility for housing related services and housing
strategy development and implementation.

95
• de-stabilises households and communities
• encourages localised social and economic decline, and
• increases residential movement and instability.68
8.23 Problems of dwelling repair, maintenance and renovation are found among
many age groups (Infobox 8.2). However, English research shows that older
people are the least likely to recognise poor house performance and are most
likely to avoid repairs and renovation.69
Infobox 8.2: Life Stages and Maintenance, Repairs and Renovation70
Household Life Stage Occupancy Repair & Renovation
Behaviour Pressure Points
Young Household Recent mover
Most active period. At
minimum, dwelling is
personalised but may
refurbish.
Low equity and high
exposure to mortgage
repayments. Poor in-
vestment choices &
undeveloped networks
Longer occupancy
Diminishing work with a
reactive approach to
repairs.
Competing spending
priorities. Desire to
reduce exposure of
children to repairs and
maintenance.
Household with
Children
Potential mover Work to improve sale-
ability.
Potential renovation
costs of subsequent
property.
Empty Nest –
Pre-retirement
Reviewing for the
long-term
‘Finishes’ personalisation.
Seeks to reduce future
maintenance. Works to
meet outstanding aspira-
tions.
Decision on whether
to move.
Older Household Long-term
occupant
Diminution of work, little
aspiration to do work and
repairs neglected.
Cash poor, reduced
contacts, diminishing
DIY capacity and
unwilling to face
disruption associated
with repairs, main-
tenance & renovation.
Household Dissolution Dwelling recycled
8.24 Older people are disproportionately exposed to dilapidated dwellings and
dwellings that perform poorly. Overseas research shows that older home
owners under-invest in repairs and maintenance and older tenants have
difficulty in getting their rental dwellings properly maintained. Older people on
low incomes, older people who are new settlers or of an ethnic minority, or
older people living in rural areas, are most at risk of living in dilapidated
dwellings and under-investing in repairs.71
68 Parkes and Kearns, 2003; Forrest, 2004; Bridge et al, 2004; Scottish Executive, 2003; ODPM, 2002;
Cole and Nevin, 2004; Terry and Joseph, 1998; Green et al, 2005; ODPM, 2003; Boelhouwer and
Elsinga, no date; Scottish Executive, 2002; Leather, 2000; Mullins et al, 2004.
69 Saville-Smith, 2005b.
70 Adapted from Leather, 2000:18.
71 Saville-Smith 2005b.

96
8.25 The problem is not one simply of affordability. Overseas research suggests
that older owner-occupiers underestimate the impact of dwelling related
problems and miscalculate how long repair work can be delayed. They tend to
be reactive to presenting problems rather than systematic in preventative
maintenance and they often find it difficult to distinguish between cosmetic
and necessary maintenance, repair and performance improvement.
8.26 At the same time, while older people appear to be least likely to recognise the
need for improved house performance, older people are, like very young
children and people with disability, least resilient and least able to cope with
living in houses that are poorly repaired, cold, and expensive to run. Older
people become unhealthy, stressed and at risk of injury. Dilapidated housing
and the burden of maintenance and repair have been identified as major
factors in prompting older people to disengage from their communities and
shift into higher dependency residential environments.72
8.27 It is in that context that many countries in Europe, North America and
Australia have sought to improve the amenities, performance and
maintenance of their stock including owner-occupied housing stock.
8.28 Of 27 European countries reviewed in 2005, 23 had programmes supporting
owner occupiers to invest in repairs, maintenance and retrofit programmes.
Canada, the USA and Australia also have such programmes. Table 8.3 sets
out the nature and focus of those programmes as of 2005.73
Table 8.3: Maintenance, Repairs & Renovation Assistance for Owner Occupiers in
Europe, North America and Australia 2005
Focus of Assistance Europe 27 (Incl.
Great Britain)
USA, Canada &
Australia
Renovation/Refurbishment 23 countries 3 countries
Repairs 14 countries 3 countries
Maintenance 12 countries 3 countries
Renovation/Retrofit Climate Change and/or Environment 5 countries 1 country
Neighbourhood Renewal 5 countries 2 countries
Specified Home Adaptation 3 countries 3 countries
8.29 Many of those programmes can be accessed by households at any life stage,
but some countries have specifically targeted older people. Finland, for
instance, specifically targets its assistance for repair, maintenance,
renovation, adaptation and retrofitting to older owner occupiers. Older people
are also targeted by initiatives and programmes.
8.30 The following discussion provides a summary of the range of provision in a
small selection of countries – Finland, Canada, Australia, the United States of
America, and the United Kingdom.
72 Ibid.
73 Ibid.

97
Finland74
8.31 The Housing Fund of Finland provides a wide range of grants and subsidies
for older people through the Housing Finance and Development Centre of
Finland. Four grants programmes are most important:
• Housing repairs for the elderly and the disabled;
• Lift construction and repair;
• Eliminating health hazards;
• Energy grants.
8.32 The housing repairs grants for older people generally cover up to 40 percent
of repair costs. However, if an elderly person would otherwise need to move
permanently from their home if those repairs were not done or more cost-
effectively substituted by in-house care, then grants can be provided to up to
70 percent of repairs. Those grants are provided through the local
municipality.
8.33 In contrast, grants for lift construction and repair as well as grants to eliminate
health hazards are provided through the Housing Finance and Development
Centre of Finland directly. The grants for lifts are directed primarily at
apartments and multi-units and can be up to 50 percent of approved costs.
8.34 The grants for eliminating health hazards are up to 40 percent of approved
costs and may be used for any residential building. However, unlike other
grants, the applicants must show an acute need for financial assistance. In
the Finnish context that means that they would have to seek welfare support if
they were to undertake the repairs. The repairs themselves must be extensive
and have direct health or safety impacts. The latter includes rectifying
exposure to damp.
8.35 Energy grants are provided to householders to improve the energy efficiency
of their dwellings. Householders may apply for grants to undertake any of the
following activities:
• Independent energy audits;
• External repairs necessary to improved dwelling performance;
• Improvements to ventilation and heating systems;
• Installation of renewable energy sources.
8.36 Energy grants provide for 40 percent of the actual costs of an energy audit.
However, the proportion of subsidy for other measures is considerably lower
at 10-15 percent.
United Kingdom
8.37 Even before the release of the 2008 strategy on ageing society and housing,
the United Kingdom had been increasingly investing in housing stock
modernisations, adaptations and retrofit improvements for older people. This
has focused on both the social housing stock and the owner occupiers. Those
investments have been directed to:
74 http://www.ara.fi

98
• Renovation and stock modernisation in the social housing stock – Decent
Homes Programme;
• Addressing cold homes and fuel poverty – Warm Front Scheme;
• Reducing resource efficiency for both domestic energy and water use –
Green Homes Service;
• Home modifications – Disabled Facilities Grants;
• Housing related support services – Supporting People Programme and
Home Improvement Agencies.
Infobox 8.3 summarises those five programmes in relation to the activities,
investment and targeting in the United Kingdom.
Infobox 8.3: Core Housing Related Programmes in the United Kingdom 200875
Programme Activities
Funding, Coverage & Targeting
– 2008
Decent Homes Repairs, maintenance and
renovation
2001-2008 public housing stock
upgrades
Warm Front Scheme Heating, insulation and
benefit support
1.6 million households since 2000,
over half with older people
Green Homes Service
One-stop shop for green
homes and accessing
assistance
Disability Facilities Grant Modifications 37,000 people
Supporting People
Adaptations, community
alarms, sheltered housing,
repairs, information
840,000 older people
10,000 handy person jobs 2003-04
Home Improvement Agencies
Local organisation
advising on home
improvements, repairs,
maintenance, accessing
assistance, grants and
loans and services
90% of local authorities have HIAs
8.38 The United Kingdom’s 2008 National Strategy for Housing in an Ageing
Society heralds further investment in the existing programmes set out in
Infobox 8.3. There is also to be a review of housing in the private rental sector
accommodating older people, its fitness for purpose, and ways in which the
private rental sector can improve the performance of the housing it provides.
8.39 The Government has already informed the private housing sector that it also
intends to raise housing standards in that sector to provide increased safety
and health protection through the implementation of a Housing Health and
Safety Rating System (HHSRS).
8.40 Infobox 8.4 sets out the 2009 and out years funding and service expansions
presented in the UK National Strategy for Housing in an Ageing Society.
75 Communities and Local Government, 2008.

99
Infobox 8.4: Future Housing Related Programmes in the United Kingdom from 200976
Programme Status in 2009 Activities Investment
Decent Homes Expanded
As existing. Target 95% of all social
housing stock. Improve 3.6 million stock
including owner occupied and stock in
private rental market by 2010.
Warm Front Scheme Expanded As existing. Target remaining 1.5 million
households in fuel poverty.
Green Homes Service Expanded As existing.
2008/2011
funding £2.3
billion
Disability Facilities
Grant Expanded
As existing with greater co-ordination
with HIAs and rapid repairs and:
• Extend coverage to garden access
• Raise maximum grant limit
• Increase flexibility
• Promote accessible housing register
Increase budget:
• 20% in 2008
• 7% in 2009
• 6% in 2010
Supporting People Expanded As existing with greater co-ordination
with HIAs and rapid repairs.
Rapid Repairs &
Adaptations Service New
Target 125,000 older people per annum
to receive assistance with minor
adaptations and repairs.
New funding
each year from
2009 to 2011 –
not specified
Housing Health and
Safety Rating System Implementation Local authority implementation to
underpin formal interventions.
Home Improvement
Agencies
New &
expanded
In addition to existing services:
• planning for local area delivery
• Establishment of a National Body for
Home Improvement Agencies
New funding from
2009/10 – not
specified
Canada
8.41 Canada has a well established national home repairs and adaptations
programme. This is the Home Adaptations for Seniors' Independence (HASI)
Programme run by the Canadian Mortgage and Housing Corporation. It
provides a non-repayable loan of up to $C3,500 to help homeowners and
landlords pay for minor home adaptations to extend the time low-income
seniors can live independently in their own homes.
8.42 Homeowners and landlords may qualify for assistance as long as the
occupant of the dwelling:
• is 65 and over;
• has difficulty with daily living activities brought on by ageing;
• total household income is at or below a specified limit for the area;
• the dwelling unit is a permanent residence.
8.43 The homeowner has to agree to occupy the unit for the loan forgiveness
period of six months. If the adaptation work is being done on a rental unit, the
landlord must agree that rents will not increase as a result. All adaptations
have to be permanent and fixed. The programme is focused on minor
modifications that meet the needs of seniors with an age-related disability, for
example, fitting of:
76 Communities and Local Government, 2008.

100
• handrails;
• easy-to-reach work and storage areas in the kitchen;
• lever handles on doors;
• walk-in showers with grab bars;
• bathtub grab bars and seats.
8.44 In addition, older people can also access, along with other age groups, the
Homeowner Residential Rehabilitation Assistance Program (RRAP). This
programme provides financial assistance for mandatory repairs necessary to
maintaining affordable housing in good quality. This is a programme for the
rehabilitation of sub-standard housing; it is not a preventative repair and
maintenance programme. Access to the programme is based on two separate
eligibility criteria. The first relates to the property and the second relates to the
circumstances of the householder.
8.45 For a property to be eligible its capital value must be below the prevailing
value cap. The dwelling must be older than five years and require significant
structural repairs and/or repairs to one or more of the following systems:
heating, electrical, plumbing, fire safety. The repairs must ensure at least
fifteen additional years of building life and bring the dwelling to minimum
health and safety standards. Financial assistance is provided by way of a
suspensory or forgivable loan over a period of five years.
Australia
8.46 Australia has two streams of funding related to improving house performance
and amenities. Those are, firstly, schemes to assistance householders to
improve the energy efficiency and comfort of their dwellings. Secondly there
are a number of programmes that are collectively referred to as Housing
Maintenance and Modification programmes (HMMs). While there is broad
similarity between schemes nationally, there are variations across states in
both streams.
8.47 The HMMs are the predominant way in which older people access home
assistance to improve the performance and maintenance of their homes. A
recent review of those services has concluded that “HMM services can be
described as programs [sic] without policies: there are numerous initiatives
but these have not yet developed into a clearly articulated national HMM
service.” It is noted that while all states deliver HMM, the particular
configuration of those services and how community care, health, housing and
veteran services interface in configuring HMMs is unique to each state.77
8.48 What is particularly important in the conception of the HMM in Australia is the
scope of the HMM which ranges over three distinct activities:
• Structural modifications to homes;
• Non-structural modifications in homes; and
• Maintenance and repairs.
77 Jones, de Jonge, and Phillips, 2008.

101
8.49 In addition, the funding of HMMs takes a variety of forms. Those range from
bulk-funding to public housing providers and health and community service
providers. In some states, home loans are specifically provided to finance
home modifications. The Department of Veterans Affairs also provides
subsidised home loans to assist veterans. Those loans can be directed to
home maintenance, repairs or modifications that encourage independent
living. Infobox 8.5 provides a summary of those schemes.
Infobox 8.5: A Summary of Australian Home Maintenance and Modification Initiatives 78
Service/Programme Description
Home and Community
Care (HACC) program
and other national
community care
programs
 Generic, national community care program, funded by
Commonwealth and states, with home maintenance and
modification (HMM) as a modest component
 People who are eligible are ‘at risk of premature or inappropriate
long term residential care’
 Include structural and non-structural modifications, repairs and
maintenance
 Considerable inter-state variation in the level and mix of services
 1–2 per cent of Australians receive HACC-funded HMM services
 Type of organisation involved in delivery varies from state to state
including specialist HMM services, generic HACC providers and
state and local government agencies
 Information, referral and advice services funded through
Independent Living Centres (ILCs) in some states
State and Territorial
Housing Authorities
(SHAs): provision of
HMM for social housing
tenants
 All SHAs include adaptable and accessible housing in their
portfolios through acquisition and upgrading programs
 All undertake housing modifications or arrange transfers to meet the
specific needs of older social housing tenants
 All undertake the normal maintenance required of landlords, and
maintain gardens and common areas of multi-unit sites
 All employ or contract specialist occupational therapists, architects
or building professionals to assess client needs and supervise
modifications
 Levels of activity are significant, with annual expenditure on home
modification in some states equivalent to the total national
expenditure through HACC
State and Territorial
Housing Authorities
(SHAs) loan products
 Four states provide subsidised loan products for home modification
 The take-up of these loans by older people has been limited
Queensland’s Home
Assist Secure (HAS)
program
 State-funded network of home maintenance, repair and minor
modification services for older people in owner-occupied or privately
rented accommodation
 Provides information, assessment, referral to private contractors,
project management and financial subsidies
 Focus on falls prevention, home security, physical mobility and
safety
 State-wide network of forty-one services that assists over 50,000
older people annually
 Delivers a high proportion of HACC-funded HMM services in
Queensland
Victorian Archicentre
Home Renovation
Service
 Service provided by the building advisory service of the Royal
Australian Institute of Architects and funded by Victorian Department
of Housing (DOH)
 Free home inspection for older people and people with a disability
 Report provided on building conditions and recommendations on
maintenance, repairs, and modifications
 Fee-for-service architectural and project management services
available
78 Summary based on Jones, de Jonge, and Phillips, 2008.

102
NSW State Council and
Research and Resource
Centre
 State Council provides coordination and advocacy on behalf of
HMM providers in NSW
 University of Sydney Research and Resource Centre provides
information and technical resources for HMM services
State community health
centres
 A key source of referrals to HMM services in their roles as care
coordinators and case managers
 Occupational therapists in community health assess need and
eligibility for a range of HMM services, e.g. aids and equipment
programs, HACC-funded HMM services, public housing home
modifications
Hospital discharge
programs
 Hospital-based occupational therapists provide assessment,
advice and referral
 There may be funding programs relating to health-specific
conditions that include HMM provision, e.g. Queensland’s program
for people with spinal cord injuries
 Responsibility for the funding of HMM services can be a source of
tension between health and community care services
Falls prevention
programs
 The National Falls Prevention for Older People Initiative provides a
coordinated approach to falls
 Generally falls prevention programs rely on existing services
systems such as HACC for the actual provision of HMM services
Equipment and Aids
programs
 All states and territories have equipment and aids schemes that
vary in name, scope and eligibility guidelines
 They are generally small programs which in some (but not all)
states include non-structural modifications
 Older people are eligible recipients in some states, but not in
others.
 An example of a scheme that includes HMM for older people is
Victoria, which provides modifications up to a lifetime limit of
$4400
Department of Veterans’
Affairs (DVA) programs
 DVA funds and administers a number of national HMM services
that mirror mainstream programs
 These include home and garden maintenance services provided
under the Veterans’ Home Care (VHC) Program, non-structural
modifications to prevent falls under the Home Front program,
home modifications provided as part of the Rehabilitation
Appliance Program (RAP), information, advice and referrals
relating to HMM provided through the Veterans’ Home
Maintenance Line (VHML), and loans for home modification
through the Home Support Loan scheme.
Other Home
Maintenance and
Modification (HMM)
provision
 Commonwealth Carelink Centres provide information about a
range of services, including HMM, for older people
 Local government in Victoria supplements HACC funds for home
maintenance
 Independent Living Centres (ILCs) in western Australia (WA) have
funds for home modifications
 NSW HMM specialist providers offer HMM services on a fee-for-
service basis to individuals who are not eligible for HACC
 In Tasmania some home modification services provided through
state government community and health services centres
 Technology Assisted Disability Western Australia provides
information and advice about home modifications
 Queensland Smart Housing and Home Access initiatives provide
information to home building professionals, developers, real estate
agents and consumers
 Some SHAs involve volunteers in HMM provision, e.g. the NSW
DOH Neighbourhood Aid Program

103
8.50 In addition, Australia provides assistance to both tenants and owner occupiers
to improve the health of their homes through insulation retrofitting with
subsidies for ceiling insulation at $AU1,000 and $AU1,600 respectively. There
are also an array of other loans and subsidies to reduce energy expenditure
including income tested rebates for installers of solar water heating and low
interest ‘green loans’ of up to $AU10,000. Those programmes are not
specifically targeted at older people but do include older people among the
eligible households.79
United States of America
8.51 In 2007 a survey of building companies specialising in renovations and what
is referred to in the United States as remodelling, found that 72 percent
reported being involved in ageing-in-place modifications. That was up from 60
percent the previous year. Three-quarters of those companies also reported
that over the past five years the number of requests for accessibility features
had increased significantly.80
8.52 There is considerable diversity in the United States around the provision of
assistance to older people for modifications and home repairs. The state of
Georgia has had a long history of providing both a legislative framework and a
regime of incentives to promote accessible housing and ‘visitability’. This
includes tax credit of up to $500 for retrofitting existing single-family homes,
based on the actual cost of up to $125 per feature. The features falling into
the programme are:
• one no-step entrance into the home;
• 32-inch wide interior passage doors;
• reinforced bathroom walls;
• light switches and outlets placed in accessible locations.
8.53 The Department of Housing and Urban Development also provides funds to
older people to undertake home repairs or retrofitting. The United States
Rural Department of Agriculture provides grants for home repairs among
older rural residents. Those programmes are supplemented by numerous and
diverse state government, local authorities and community sector initiatives.
New Housing Designed for Long Lives
8.54 Most countries overseas have, implicitly or explicitly, two approaches to
addressing the housing stock needs in the context of ageing societies. We
have already noted that that there is a strong trend to addressing those needs
through the adaptation, renovation and retrofitting of exiting housing stock.
Running parallel to those initiatives, however, is an increasing momentum
around ensuring that new housing stock is built to deal with a wider range of
needs and to be more easily adapted to changing needs over different life
stages. There are various articulations of lifetime or universal design in
relation to housing. Figure 8.2 presents a United Kingdom Department of
Health version of the lifetime home.
79 http://www.icanz.org.au/Consumers/
80 Maisel, Smith, & Steinfield, 2008.

104
Figure 8.2: Lifetime Homes in the UK - 200881
8.55 The emergence of what is variously referred to as lifetime homes, universal
design, or smart houses, is a mixture of building and housing industry and
governmental promotion. Overseas experience shows that a small set of
private sector organisations see lifetime design as providing them with
competitive advantage in the owner occupier market. The majority of new
home builders, however, do not adopt those principles without active
promotion and incentivisation by local, state or national governments. In
addition, new dwellings destined for the rental sector are rarely designed for
lifetime adaptability.
8.56 The promotion of lifetime design overseas, consequently, tends to involve a
loose or sometimes quite a tight, formalised, collaboration between
progressive and entrepreneurial market leaders, government and community
groups concerned with issues of mobility and independence for people
affected by disability, including disability associated with ageing. That
collaboration typically involves:
81 Department of Health, 2009.

105
• Development of lifetime or universal design standards which can be
promoted through either industry bodies or implemented by regulation.
• Promotion of lifetime design standards through industry awards usually
funded through public funds.
• Adoption of lifetime design standards by public agencies providing
housing.
• Provision of industry and consumer advice on designing and building to
lifetime design.
8.57 In general, there is only limited implementation of lifetime design standards or
even basic accessibility standards by way of regulation. Where regulation is
used it is typically applied to social housing stock or multi-unit dwellings that
have shared public space. Dwellings in private ownership are least likely to
be subject to regulatory requirements. Infobox 8.6 sets out a country by
country summary of regulation of disability access to new homes as of 2005.
Infobox 8.6: Summary of Countries with Regulatory Requirements for Disability Access
to New Dwellings as of 2005
Country Framework/legislation Year
New
Homes
State level Building Standards for accessible
showers, doorways, ramps. 2005 √
Australia
AS/NZS 1428.4:2002. Design for access and
mobility. Tactile Indicators. √
NHS and Community Care Act
1990 √
United Kingdom Building Code. Lifetime Home
Standard Part M.
Similar codes in Scotland & Wales
1999 √
BS 5588. Part 8.
Safe means of escape for disabled people (fire
related.)
1999 √
United Kingdom
Disability Discrimination Act 1995 √
Canada Accessibility for Ontarians with Disabilities Act 2005 √
Federal Fair Housing Amendments Act 1968 √
Americans with Disabilities Act 1990 √
Visitability laws - some states √
HB 1441. (Visitability Access) √
United States
Pending: Inclusive Home Design Act. √
General Principles Concerning Measures For
The Aged 2001 √
Housing Quality System (1999) 1999 √
Japan
Accessible and Useable Building Law (revised) 2003 √
European Union Standard EN 81-70. Independent access and use
of lifts 2003 √
Norway Life Span Dwellings Standard 1995 √
Israel Accessibility Chapter of the Equal Rights for
People with Disabilities Law. 2005 √

106
8.58 The Victorian Government in Australia has recently launched an industry and
consumer awareness programme entitled Build for Life which focuses on
lifetime design. It has also announced that it will be investigating the merits of
adding minimum mandatory requirements for accessibility in new dwellings
with a focus on street to house access, internal access by way of wider
doorways and hallways, entry level toilets and wall reinforcing to allow
subsequent fitting of grab rails in bathrooms.
8.59 Of all countries, Japan has shown the longest history of active regulation. In
the mid-1990s, the design Guidelines for Dwellings for an Ageing Society
sought to have 20 percent of all new dwellings built to universal design and a
further 20 percent built to barrier free standard. In 1994, the “Gold Plan” set a
target of 100,000 care housing units. Low take-up saw the “Gold Plan” being
developed to a point that all new housing had to accommodate an occupant’s
life changes over a period of 30 years through the application of a universal
design standard. This probably reflects Japan’s very high dependency ratios
and its recognition that the building industry was, despite those ratios, not
meeting the needs of older people through demand-supply mechanisms.
8.60 Industry response is increasingly an issue as population structures age. The
United Kingdom with its 65.4 dependency ratio is currently seeking to tie
lifetime design standards to the codes around sustainable housing. Lifetime
Homes Standards are being progressively made mandatory. In 2008, homes
at level 6 of the Code for Sustainable Homes will be required to meet the
Lifetime Homes Standards. In 2010, those requirements will be extended to
level 4 homes and to level 3 homes in 2013. The National Strategy for
Housing in an Ageing Society aspires to have all new homes built to Lifetime
Homes Standards by 2013.82
8.61 The determination to regulate Lifetime Homes Standards is based on cost
analysis that suggests that the additional costs of those standards is around
£547 per home, although those costs may be less where designs are
generated from scratch. Those costs are expected to be higher if existing
designs are amended and pre-existing supply chains and building
technologies are used.83
8.62 In Australia although there are limited mandatory requirements for lifetime
design, it has long been recognised that flexible house design assists cost-
effective modifications and renovations. In 1999, a cost analysis was
undertaken comparing adaptation features into new build, post-build upgrade
in buildings design to allow upgrade, and post-build upgrades in buildings that
were not designed to allow adaptive features. As Table 8.4 shows additional
costs varied according to building typology but in all cases where adaptive
features were in-built at initial building, additional costs were either lower or
no greater than post-build adaptation.
82 Communities and Local Government, 2008.
83 Communities and Local Government, 2008.

107
Table 8.4: Costs of Adaptable Housing as % of Total Cost in Australia84
Dwelling Type
Initial Build
Incorporation of
Adaptation
Post-Build with
Prior Provision
Post-Build No
Prior Provision
Detached dwelling 0.5-1.0% 0.7-1.2% 8.7-12%
Town-house 0.5-1.0% 5.7-6.7% 19-23.8%
Low-middle rise 0.3-5.8%^ 0.3-7% 10.3-21.9%
High rise 0.3-0.7% 0.3-0.7% 9.2-12.9%
^ includes lift
8.63 In the United States, lifetime design has been largely conceptualised around
the notion of visitability. The basic requirements of a visitable dwelling are: a
zero-step entrance, wide interior doors, and an accessible lower floor toilet.
Despite the limited nature of those requirements, their adoption is by no
means universal in the new housing stock. There is also considerable
variability across the United States in terms of targeting and instruments used
to promote visitability.
8.64 Both voluntary and mandatory systems are evident in the United States. In
some cases, visitability requirements apply only to dwellings in which some
form of public monies has been invested. In other jurisdictions, all new built
housing is included. Some states have legislative frameworks that impede
local authorities adopting visitability ordinances. Those include, for instance,
New York and California, in which visitability ordinances can not be
implemented because they would require that dwellings exceed the standards
set out in the State Building Construction Codes. Local authorities in those
states have pursued a combination of voluntary standards, incentive-based
and consumer awareness programmes to promote visitability. Infobox 8.7
sets out the range and location of visitability initiatives in the United States.
Infobox 8.7: United States Visitability Initiatives for New Homes Current In 2008 85
Mandate Homes
- Public Funds
Mandate for All
New Homes
Builder
Incentives
Consumer
Incentives
Certification
Programmes
Atlanta
(1992)
Naperville, IL
(2002)
Permit
waivers/Reduced
fees in
Southampton, NY
(2002)
Freehold
Borough, NJ
(1997)
Irvine, CA (1999)
Austin, TX (1998) Pima County, AZ
(2002)
Houston, TX
(2004)
Southampton, NY
(2002)
San Mateo
County (2001)
Urbana, IL
(2000)
Bolingbrook, IL
(2003)
Rebate in
Escanaba, MI
(2003)
Visalia, CA
(2001)
Fort Worth, TX
(2000)
Pittsburgh, PA
(2006)
Albuquerque, NM
(2001-2002)
Long Beach, CA
(2002)
Howard County,
MD (2001)
84 Quin et.al,. 2009.
85 Maisel, Smith, and Steinfield, 2008.

108
San Antonio, TX
(2002)
Onondaga
County (2002)
Iowa City, IA
(2002)
Syracuse, NY
(2003)
Chicago, IL
(2003)
Sacramento, CA
(2003)
St. Louis County
(2003)
Prescott Valley,
AZ (2005)
St. Petersburg,
FL (2004)
Montgomery
County, MD
(2007)
Toledo, OH
(2005)
Auburn, NY
(2005)
Scranton, PA
(2005)
Arvada, CO
(2005) 15% of
new homes
Milwaukee, WI
(2006)
Davis, CA (2007)
Lafayette, CO
(2007) 25% of
new homes
Rockford, IL
(2007)
Dublin City, CA
(2007)
Tucson, AZ
(2007)
Pine Lake, GA
(2007)
Texas (1999) Florida (1989)
Accessible
Housing
Demonstration
Grant Program
Illinois (2002)
Tax credit
incentives in
Georgia (1999)
New Mexico
(2001)
Georgia (2000) Vermont (2000)
PHFA Research
Project
Pennsylvania
(2004)
Tax credit
incentives in
Virginia (1999)
Easy Living
Home Project in
Georgia (2002)
Minnesota (2001)
Kansas (2002)
Kentucky (2003)

109
Oregon (2003)
New Jersey
(2005)
Michigan (2006)
Tax credit
incentives in
Pennsylvania
(2006)
Ohio (2007)
8.65 Overall, the international response to ageing societies in relation to new
dwellings is characterised by active promotion of dwellings that are more
flexible and more easily adapted to changing individual and household needs.
The response, however is marked by both diversity in relation to
nomenclature and in substance. A continuum of accessibility can be
discerned that moves from negotiability to universal design as follows:
• Negotiable where a building allows only for assisted access and provides
some movement around the lower levels, but does not necessarily provide
access to a toilet.
• Visitability where a building allows independent wheelchair property
entry, access to lower levels, ability to move between rooms and access
to the toilet.
• Liveable where there is unassisted wheelchair access to the lowest level
of a building and the ability to move between rooms, access to a usable
bathroom, toilet and a bedroom.
• Adaptable where the whole house or flat is retrofitted or purpose built to
give the desired level of accessibility that will be required through the
occupant’s social and life cycle changes over at least a 30 year period.
• Universal where a whole house or flat is fully accessible to an unassisted
wheelchair user or person with other functional impairments.
These have a range of design responses (Infobox 8.8).
Infobox 8.8: Key Approaches to Accessible Mainstream Housing Design
Universal design
An approach to the design, construction and adaptation of standard
housing to meet the needs of all home owners regardless of their
age, ability, or social situation. Universal design benefits all age
groups. Also known as Universal Housing and Adaptable Housing.
Achieving uptake in the social housing market; but its adoption in
private dwellings has been limited.
Life Span Housing
Housing that can accommodate changes in human ability over a
person’s lifespan, enabling the occupants to live and remain in their
homes as long as possible. Also known as Lifetime Homes in the
United Kingdom, Lifecycle Housing in Norway and Adaptable
Housing in Australia.
Inclusive Design
A way of designing products and environments so they are usable by
everyone regardless of age, ability or circumstance. Remove barriers
in the social, technical, political and economic processes
underpinning building and design.
Barrier-free Design
To be active, a disabled person should be able to commute between
home, work and other destinations. Barrier-free design ensures that
the whole built and transport environment meets the needs of people
with physical, sensory or cognitive disabilities.

110
Secure and Affordable Housing
8.66 Ensuring that older people have access to secure and affordable housing is
beginning to emerge as a critical issue in the context of ageing population
structures in Europe, North America and Australia. It is an issue that confronts
both older owner occupiers and older tenants as older people’s incomes
decline and societies begin to confront the implications of high dependency
ratios.
8.67 In addition, many countries are beginning to recognise and respond to the
impacts of ageing on populations already vulnerable to homelessness and
marginal to the housing market including those who have suffered mental
illness, people marginalised through addiction problems, people in rural
areas, and people who are dependent on rental markets under-supplied with
affordable, adequately performing housing.
8.68 Broadly three approaches are being taken in relation to the diversity of
pathways that compromise the security and affordability of older people’s
housing. Those are:
• Income supplementation programmes;
• Provision of affordable housing alternatives; and
• Specialised housing responses.
8.69 In many jurisdictions, those housing responses are being supported by
programmes to assist older people to make decisions regarding staying in
their current housing setting or relocating. An example is the eight “Should I
Stay or should I Go?” pilots run by Care and Repair England. Those pilots
were designed to provide face-to-face information and advice on housing
alternatives, develop options for older people and liaise with service
providers. Sheffield Hallam University’s evaluation found that most people
needed only limited assistance but that assistance was often critical to good
outcomes. A significant minority of older people needed considerable
assistance to make decisions. The provision of that assistance increased the
effectiveness of older people’s decision-making and improved the ability of
providers to meet older people’s needs within the constraints and limitations
of available housing options and services. 86
8.70 Supplementing older people’s incomes so that they can maintain their current
housing or change their housing situation is widespread. It takes a number of
forms including: housing or accommodation supplements and benefits; tied
assistance with housing related costs such as the provision of municipal rate
holidays; heating or energy benefits; or among owner occupiers promotion or
provision of equity release schemes. The latter can involve reverse
mortgages or ‘trading down’ into homes of lower value or even movement
from owner occupation to rental tenure.
86 Hambly and Adams, 2003.

111
8.71 The United Kingdom and the United States have both had long histories of
equity release schemes both through the private and the public sector. In the
United States, the Department of Housing and Urban Development assists
older people to access the Federal Housing Administration’s (FHA) Home
Equity Conversion Mortgage (HCEM). Infobox 8.9 provides a summary of the
conditions surrounding HCEMs. At the same time, the Department for
Housing and Urban Development has been so concerned about difficulties
associated with reverse mortgage scams and misunderstandings around the
extent to which mortgage assistance is guaranteed, it supports a network of
housing counsellors.87
Infobox 8.9: United States FHA Housing Equity Conversion Mortgage 2008 88
Purpose Enables older owner occupiers to withdraw some of the equity in your home
with payments as a fixed monthly amount or a line of credit or both.
Decision-making
Support
HECM counsellors discuss program eligibility requirements, financial
implications and alternatives and provisions for the mortgage becoming due
and payable.
Borrower Eligibility
Be 62 years of age or older; own the property outright or have a small
mortgage balance; Occupy the property as principal residence; not be
delinquent on any federal debt; participate in a consumer information session
given by an approved HECM counsellor.
Mortgage Amount
& Financial
Requirements
Mortgage amount is based on the age of the youngest borrower, prevailing
interest rate and property value or mortgage limit (whichever is the lesser). The
financial requirements are that closing costs may be financed by the mortgage.
Otherwise no credit or income qualifications are required. No repayment is
required as long as residence remains the principal living place.
Property
Requirements
Property must meet all FHA property standards and flood requirements and be
a single family home or 1-4 unit home with one unit occupied by the borrower
or a HUD-approved condominium or a manufactured home that meets FHA
requirements.
Tenure - equal monthly payments as long as at least one borrower lives and
continues to occupy the property as a principal residence
Term - equal monthly payments for a fixed period of months selected
Line of Credit - unscheduled payments or in instalments, at times and in an
amount of choosing until the line of credit is exhausted
Modified Tenure - combination of line of credit plus scheduled monthly
payments
Payment Plans
Modified Term - combination of line of credit plus monthly payments for a
fixed period of months selected by the borrower
Repayment Must be repaid in full at death or sale of home or if conditions such as
residency, insurance and home maintenance are not met.
Lifetime Neighbourhoods and Cities
8.72 A number of jurisdictions overseas are recognising the importance of:
• Ensuring neighbourhood built environments suit the needs of older
people, and
• Connecting where older people live with city and regional services and
amenities.
87 See Herbert, Turnham, & Rodger, 2008.
88 http://www.hud.gov/offices/hsg/sfh/hecm/hecmabou.cfm

112
8.73 Initiatives around neighbourhoods include improved streetscapes for people
with disability, including Alzheimer conditions,89 and provision of immediate
services, food access and social and recreational opportunities. They also
include development of housing options for older people to move from
existing but possibly unsuitable dwellings to more suitable dwellings within
their community. There is a particular emphasis on managing inter-
generational relationships within communities and housing developments.90
8.74 At the city scale, the World Health Organisation (WHO) has promoted the
development of Age-Friendly Cities. The WHO guide to Age-Friendly Cities
identifies four major ways to improve cities in the context of ageing societies.
Those are:
• ensuring affordable transport;
• promoting older people’s participation in civic society by holding public
events at times convenient to older people;
• supporting older people’s employment; and
• providing accessible service and amenity information.
8.75 WHO has provided a checklist that cities can use to self-assess their
progress. Cities involved in developing those guidelines include: Melbourne,
London, Istanbul, Mexico City, Moscow, Nairobi, New Delhi, New York,
Shanghai and Tokyo.
Learnings for New Zealand’s Future
8.76 The review of international responses to ageing show that some countries,
particularly the United Kingdom, have made a considerable investment into
research to illuminate appropriate pathways into the future. Many of the
issues around older people’s housing futures in the context of an ageing
society are similar to those identified in New Zealand. Moreover, while there is
considerable international variation in response, there are some clear themes
emerging.
8.77 That commitment to ‘ageing in place’ is partly because there is a strong desire
among older people themselves to stay in their communities and, indeed,
within their existing homes. It is partly because there is a gathering body of
evidence that service provision within institutional settings for older people is
at least as costly as enabling service provision within communities. It is partly,
also, because with increasing old age dependency ratios, there is an
imperative to keep older people socially and/or economically productive for
longer.
8.78 It is also being recognised that ‘success’ and cost-effectiveness of ageing in
place is closely associated with housing. Independence and activity are
influenced by the extent to which the housing in which older people live:
89 Burton, et.al., 2004; Burton and Mitchell, 2006, Burton and Torrington, 2007; Saville-Smith, 2008b.
90 Hatton-Yeo and Oshako, no date; Wel_Hops, 2005.

113
• is enabling or disabling;
• promotes or compromises health and safety;
• connects or isolates; and,
• optimises living standards or is a burden on constrained incomes.
8.79 In short, housing futures for older people matter because they have so many
other impacts on the individual outcomes for older people and their families,
and those outcomes, in turn, impact on the whole of our society. In 2050,
when almost a quarter of our population is likely to be aged 65 years or older,
the impacts on wider society of the conditions in which older people live will
not be able to be ignored.
8.80 Finally, the international response shows that while the demographics of
ageing may be inexorable and challenging, the response to ageing can be
purposeful. There are choices about housing futures.
8.81 Ensuring a decent future for older people’s housing and one in which the
costs of ageing are mitigated will involve actively and consistently recognising
housing as a fundamental determinant to wellbeing and:
• Focus on robust cross-sectoral co-ordination and interface around
housing;
• Actively improve the performance and amenity of older people’s existing
dwellings;
• Actively ensure that new dwellings perform well and are adaptable across
the full life-cycle; and
• Creatively find ways of improving the security and affordability of housing
for older people.

114
PART 3: RESEARCH FOR ACTION

115
9. FINDING A BRIGHTER FUTURE
9.1 The scenarios presented in Part 1 of this report and the pre-conditions and
baselines are not predictions. They are, however, informed by a wide range of
data, information and experiential reflection by consumers and sector
stakeholders. The process of generating those scenarios has highlighted a
number of important issues around New Zealand’s ability to address the
housing futures of older people in the context of an ageing society.
9.2 Firstly it is clear that there is a substantial evidential base of both New
Zealand and overseas data and experience that allows us to:
• identify realistic future scenarios for older people’s housing in the context
of an ageing society;
• consider how to optimise our response to those futures; and,
• provide a number of instruments, models, programmes and approaches
that could be implemented to improve the housing futures for older people
and, by extension, of New Zealand as a whole.
9.3 Second, it is also clear that whether the housing futures of older people are
optimised to their own and others’ benefit will depend on leadership, cross-
sectoral collaboration and a shared sense of purpose that involves the
private, public, community and household sectors. A crucial part of that
collaboration involves:
• reprioritising housing in the health and social services; and
• integrating, not merely co-ordinating, housing assistance, funding and
services in the broader spectrum of older people’s services; and
• recognising the role of the sectors concerned with the built environment –
the building industry, the housing sector, the energy sector, and those
concerned with settlement planning and infrastructure – into planning for
older people’s housing needs; and
• developing the range of products, practices, processes, instruments and
policy settings that will ensure optimal alignment between older people’s
housing needs, housing demand and housing supply.
9.4 Third, the process of scenario building has shown that New Zealand’s
situation is not so very different from many countries overseas. Because of
that we can learn from overseas experiences and draw on the array of
policies, programs and products generated overseas.
9.5 Australia, the United Kingdom, Canada and the United States are all ageing.
They will all have larger older populations who make up a larger proportion of
their populations. But they also have young ethnic populations that make the
population ageing process more complex and the needs of older people more
diverse.
9.6 A comparison of the international research around older people’s aspirations,
their likely needs and how those needs are transformed (or not) into housing
demand and housing supply, show some fundamental similarities:
• Older people want to:
• live in their communities; and
• want to be active with homes of their own (rental or owned), whether
they live with others or by themselves.

116
• Older people’s dwellings, rather than institutional settings, are increasingly
the setting for the provision of care and health services.
• The existing housing stock will dominate the housing stock in 2050 and
requires investment in repairs, maintenance, modification and thermal
performance if it is provide for the needs of older people.
• Building industries tend to be conservative with new stock, largely
replicating the design limitations of the past unless there are purposeful
incentives to change.
• Housing demand is strongly supply driven with housing functionality
problems exacerbated by a trend towards producing larger dwellings.
• Older people in rental markets are more exposed to poor dwelling
performance and/or tenure insecurity.
• Older people’s extended longevity raises issues of living standards,
housing affordability and a desire for extended employment participation.
• Older people become less mobile and more dependent on walking and
public transport to connect to daily activities such as shopping, accessing
health and other services, recreation and social interaction.
9.7 At the same time New Zealand is unique in relation to our cultural
expressions and the organisation of our sectoral responsibilities and statutory
requirements. We also have some unique features around our housing stock,
our neighbourhoods and our settlements. New Zealand has a relatively high
prevalence of timber-framed dwellings and detached dwellings. New
Zealand’s housing stock is very homogenous both in terms of type and
design. Our neighbourhoods are more likely to be low density and our
settlements are spread and strongly reliant on private car use.
9.8 New Zealand has the opportunity to pick up, assess, further develop and
implement the bright ideas that are emerging internationally. Similarly, New
Zealand has the opportunity to generate and export to the world bright ideas
enabling older people to be active and productive through better services,
housing and neighbourhoods.
9.9 This raises the issue of what research platform is necessary to enable New
Zealand to better plan and address the housing futures for older people.
There are a number of ways in which this could be scoped. In the past, older
people’s housing research in New Zealand has been dominated by two
research topics. Firstly, older people’s housing aspirations1 and, secondly,
housing assets, affordability and income release.2
9.10 More recently, research has been undertaken around repairs and
maintenance;3 older people’s future housing planning;4 older people’s position
within the rental market;5 and, marginal older people living alone.6 Analyses
around the house condition, thermal performance of older people’s dwellings,
and housing demand are also emerging.7
1 Davey, et.al., 2004.
2 Davey and Wilton, 2006.
3 www.goodhomes.co.nz
4 Davey, 2006b.
5 Nana et.al., 2009.
6 Smith, et.al., 2006.
7 Saville-Smith, et.al., 2007.

117
9.11 There is also housing research in which older people constitute a sub-
population in the research. Those studies may or may not highlight the
housing conditions of older people but have the potential to do so, including
research around fuel poverty,8 disability,9 energy use,10 the private rental
market,11 community housing provision,12 local authority housing13 and
neighbourhoods.14
9.12 It might be argued that the limitations of the research platform on older
people’s housing is rather similar to the problems in the way in which older
people’s housing is dealt with in policy, health and social services, the
building industry and the housing sectors. It is neither comprehensive nor
integrated.
9.13 Research around the housing stock and the built environment tends to be
detached from research into health and social services needs. Research
around housing need among older people tends to be disassociated from
housing demand research and, indeed, research into the nature of housing
supply. Typically, too, the research tends to be problem identification oriented
rather than solution oriented.
9.14 There is little research directed to considering the relative merits of different
options, products, services, initiatives or processes. Similarly there is little
evaluative research in New Zealand around different service configurations,
options for retrofitting existing dwellings or neighbourhoods, or the marginal
costs and net benefits of, for instance, lifetime design dwellings and
neighbourhoods. Nor is there research into the costs of New Zealand’s
current array of housing responses to older people.
9.15 Research tends to focus on the roles of the public and community sectors and
there is little consideration of the role of the private sector, particularly in the
building industry, and the opportunities to transform the industry response to
older people’s housing futures. Finally, some groups of older people tend to
be largely silent in the array of older people’s housing research to date. Maori,
Pacific peoples and new settlers are beginning to emerge in the research
effort, but because of the age structures of those communities, the housing
needs of those older people have been frequently seen as having only
marginal relevance.
9.16 Essentially, then, New Zealand has a choice about its research effort around
older people’s housing. It can take a business as usual approach which will
be marked by a patchwork of research that all adds to our knowledge and
understanding but which frequently does not address the key knowledge
needs across stakeholders. Or we can seek a more integrated knowledge
platform.
8 Isaacs, et.al., 2006.
9 Saville-Smith, et.al., 2007.
10 Isaacs, et.al., 2006
11 Nana, et.al., 2009;
12 Capital Strategy and SGS Economics and Planning, 2007.
13 CRESA and Public Policy & Research, 2007.
14 See Beacon Neighbourhoods http://www.beaconpathway.co.nz/neighbourhoods; Saville-Smith,
2008b.

118
Integrated Knowledge – What Do We Need to Know About?
9.17 If the type of scenario set out as the Integrated Response in this report is to
be achieved, we need a better understanding of the dynamics in a set of key
inter-related areas. They are:
• The housing, health and welfare interface. In particular:
• The housing conditions needed to facilitate improved health and well-
being outcomes for older people.
• The value of delivering of care in home-base settings relative to other
settings.
• The relationship between dwelling accessibility, independence,
productivity, and care costs.
• The relationship between older people’s housing needs, housing demand
and housing supply. In particular:
• Quantifying the gap between need, demand and supply in relation to:
• tenure
• affordable housing costs
• dwelling typology
• dwelling connectivity to neighbourhoods and city systems
• dwelling condition and functionality.
• Affordable solutions to meeting older people’s housing needs
including:
• Establishing the size of marginal costs of lifetime design and cost-
effective options for lifetime design builds.
• Identifying intermediate housing instruments suitable for older
people.
• Establishing affordable repairs, maintenance and retrofit options
and services.
• Future-proofing the new-build stock in New Zealand. In particular:
• Establishing the value case for lifetime design for key stakeholders:
• Government
• Industry
• Households
• Identifying and testing systems, products and processes that would
encourage industry supply of life time design dwellings.
• Evaluating the efficacy of various incentive, regulatory and investment
models to promote lifetime design.
• Making good the existing New Zealand housing stock: In particular:
• Establishing the condition, performance and functionality of New
Zealand dwellings.
• Establishing the value case for retrofit specified to both thermal and
amenity performance of dwellings.
• Identifying and testing systems, products and processes that would
encourage industry supply of life time design retrofit in existing
dwellings.
• Evaluating the efficacy of various incentive, regulatory and investment
models to promote retrofit.
• Increasing old people’s connectivity and activity with a particular focus on
age-friendly neighbourhoods and settlement systems.

119
Getting the Knowledge
9.18 Knowledge can be captured from a number of sources but essentially
involves either using existing research and data from overseas and/or from
New Zealand or generating new research programmes. Both of these are
important. Research funds are limited. Cross-sector funding, particularly
leveraging across the private, public and community sectors, provides
opportunities for increasing funding targeted to housing futures. There are
already some innovative programmes in this area such as CHRANZ, the
Beacon Pathway, BRANZ’s Building Levy Funding and FRST’s funding of the
cross-organisation programme targeted to repairs and maintenance in the
context of ageing in place. But funds are limited and research data needs to
be used smart. Any research plan needs to recognise that using overseas
research, using data from various New Zealand research programmes, and
new research programmes are all legitimate forms of research and research
investment.
Capturing Overseas Research and Practice
9.19 New Zealand has limited research resources by international standards.
Some countries, the United Kingdom in particular, have made a concentrated
investment in issues around older people, housing and neighbourhoods.15 It
has previously been noted that New Zealand has unique market, institutional
and cultural conditions, but also some very real similarities with overseas
dynamics. Consequently, New Zealand can leverage some of its own
knowledge off countries overseas.
9.20 Research in those countries was considered issues that are equally
applicable to our ageing population, such as the health impacts of poor
housing, implications of renting for older people, provision of home-based
care, ageing and disability, and what neighbourhoods need to provide for
older people’s wellbeing. There are significant bodies of research showing the
costs and benefits of particular policies and programmes.
9.21 Three examples are:
• Lifetime design. The inclusion of lifetime design features result in only
modest additional costs to a new home, and costs can be avoided if
incorporated into design early enough.
• Home-based care services. The use of private dwellings for home-based
care for older people is cost effective, however, dwelling type and tenure
are cost critical variables.
• Programmes to improve home performance and safety. The external
costs of dwellings that are dilapidated and have low levels of performance
are well documented. Poor housing, including cold and unsafe dwellings,
is a major reason why older people move into supported accommodation
prematurely.
15 See the 2008 National Strategy on Housing in an Ageing Society for the research underpinning that
strategy released by Communities and Local Government, 2008.

120
9.22 Another way of using overseas knowledge is in considering how tools
developed elsewhere might be adapted to improve New Zealand practice.
Examples include:
• Needs assessment tools.
• Lifetime/universal design standards for private dwellings.
• Guidelines for designing lifetime neighbourhoods.
9.23 Capturing data and experience from overseas, assessing their applicability to
New Zealand and identifying the opportunities for calibrating or testing
overseas research in New Zealand conditions, are in themselves legitimate,
albeit often under-valued, research activities. New Zealand primary research
as well as policy and practice is likely to be more robust if it is placed within
an international body of expert knowledge and experience.
Using Existing Research, Evaluation and Data in New Zealand
9.24 We also need to use New Zealand specific data to know what is applicable
and useful in New Zealand conditions, given the particular characteristics of
our ageing population, ethnic diversity, regional/local distinctions, our
government structures, current and historical policy settings, and
characteristics of the housing market.
9.25 There are considerable opportunities among the range of existing operational
research, evaluations and past research programmes to interrogate data
specifically in relation to the knowledge it might generate around older people.
Examples in this report include the analysis of travel patterns16 and house
conditions of older people emerging from an analysis of the New Zealand
House Condition Survey.17
New Research, Evaluation and Data in New Zealand
9.26 New research will need to be undertaken in New Zealand. Even where
overseas or existing data suggest certain findings, testing those within the
New Zealand context or in well-specified research or evaluation programme
focusing on a clear research problem is still an important platform for
knowledge. There is much to be done in relation to:
• Analysis of specific aspects of older people’s housing needs and the
match with housing demand and supply.
• Analysis of the performance and functioning of the housing stock.
• Ways to bring together housing, social services, health services and
income support.
• The housing demand, supply and needs of older Maori and Pacific
peoples in rural and urban contexts.
• The housing demand, supply and needs of older new settlers.
• Neighbourhood design and connectivity.
16 O’Fallon and Sullivan, 2009.
17 Saville-Smith, James and Fraser, 2008.

121
Four Research Themes for a Brighter, Integrated Future
9.27 Given that research around the following issues may be undertaken through
any variety of approaches, four research themes emerge:
• Older people’s housing needs and demand: Key research areas
relating to older people’s housing needs and demand:
• Housing needs and preferences of older people, including those of
different ethnic and cultural groups, ageing people with disabilities,
and ageing carers of older relatives.
• Potential for the development of supported housing options
(intermediate between ordinary homes and residential care), including
the nature and extent of need and demand, and appropriate models
for New Zealand.
• Housing affordability issues affecting older people and options for
addressing unaffordability.
• Potential for the development of tenure options, including nature and
extent of need and demand, and appropriate models for New Zealand.
• Options for improving the responsiveness of the rental sector to older
people’s housing needs.
• The drivers and processes affecting housing and movement decisions
of older people.
• Supply, performance and functioning of the housing stock: Key
research areas relating to housing performance and impacts of
functionality for older people:
• How can the current housing stock be improved to meet the needs of
an ageing population?
• Barriers to older people’s access to adequately performing homes.
• The value derived from:
• Retrofitting
• Designing new housing to function well for older people
• The marginal costs of retrofitting and new design.
• Coordination of housing, support and health services: Key research
areas related to coordination of services:
• What changes are required for better coordination and integration of
housing, support and health services.
• Home based care:
• Examination of the demand for home based care and the
implications of demand
• The costs and benefits of home based care, particularly the effects
of housing type, quality and tenure on those costs and benefits.
• Ways in which older people’s and their families’ access to information
and advice about housing and related services can be improved.
• Neighbourhood design and connectivity: Key research areas relating
to neighbourhood design and connectivity:
• What are the key aspects of neighbourhood design that can improve
quality of life for older people.
• How can planning be improved to deliver better neighbourhood
environments for older people.

122
GLOSSARY
Baby boom The period of high births between 1946 and 1965 in New
Zealand.
Baby boomers People born during the baby boom.
Demand The desire for a particular good or service supported by
the possession of the necessary means of exchange to
effect ownership.
Dependency Ratio Dependency ratios relate the number of people in the
'dependent' age groups (defined here as 0–14 years and 65
years and over) to the 'working-age' population (15–64
years).
Aged or elderly ratio - The number of people aged 65+
years per 100 people aged 15–64 years.
Child dependency ratio - The number of people aged 0–14
years per 100 people aged 15–64 years.
The total dependency ratio (sum of the 0–14 and 65+
dependency ratios).
Median Age Half the population is younger, and half older, than this age.
Non-private Dwellings All other dwellings (not included under private dwellings),
used for human habitation (or intended to be used), are
non–private and are available to the public. They may be
available for use generally, or by virtue of occupation or
study, special needs, or legal requirements, ie prisons.
Such dwellings may have facilities (such as a dining room)
that are for shared use. They include:
• Hotel, motel or guest house
• Boarding house
• Home for the elderly
• Other (such as hostel, motor camp, hospital).
Private dwellings A private dwelling accommodates a person or a group of
persons, but is not available to the public. Including houses,
flats, and apartments; residences attached to a business or
institutions; baches, cribs, and holiday homes; and
dwellings of the above types that are under construction.
Garages; caravans, cabins and tents; vehicles; vessels; are
also included.
Projection Indication of the future demographic characteristics of a
population, families, households or labour force based on
an assessment of past trends and assumptions about the
future course of demographic behaviour (eg fertility,
mortality, migration, living arrangement type, labour force
participation).

123
Scenario An approach to futures thinking that constructs an internally
consistent description of future conditions, situations,
events, and characteristics, based on stated assumptions.
Scenarios are used to assess and plan for uncertain,
alternative futures that are deemed possible, probable or
plausible.

124
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Wilkinson, A. (2009) Scenarios Practices: In Search of Theory. Journal of Future
Studies 13(3):107-114.
Wilson, P and P. Rodway, (2006). “Ageing and the long-term fiscal position.” pp 99 –
126 in Boston, Jonathon and Judith Davey (ed) Implications of Population
Ageing: Opportunities and Risk. Wellington: Institute of Policy studies.
Worthington, J., (2004) Housing Futures 2024: A provocative look at future trends in
housing, London: Building Futures www.buildingfutures.org.uk
www.oecd.org/els/social/inequality

131
Appendix A: Some Scenarios Used to Explore Housing Futures
A number of countries have used scenarios to explore housing futures. Many of
those scenarios share common themes. Likely futures raised in scenarios
constructed overseas include:
• Spatial polarisation scenarios where housing and service provision is divided
on the basis of income. Those on low to moderate incomes are exposed to
unaffordable, unsafe and insecure housing. Older people are particularly at risk of
inadequate housing and ill health due to poor housing conditions. At one end,
those older people with assets are catered for by specialised communities and
high quality homes run by smart technologies that are located in desirable areas
with readily available services. At the other end, the ghettoisation of social
housing and new forms of mobile homes and hostels that house extremely
disadvantaged people are common.1
• Flexible housing scenarios in which communities provide flexible housing
choices that respond to individual needs and preferences. Both residential and
commercial buildings are constructed so that they may be easily retrofitted for
changing purposes, life styles, life phases and needs of residents. Flexible
housing requires different types of tenure, including intermediate forms between
renting and home ownership.2
• Sustainable housing scenarios in which housing is driven towards greater
energy and resource efficiency in response to diminishing natural resources and
climate change and associated drivers that raise building and/or house operating
costs. Medium-high density housing and the use of brownfields sites is promoted,
and mixed use settlements with integrated residences, businesses, facilities and
services are common. Transport policy affords priority to walking, cycling and
public transport. Large suburban shopping malls dwindle, housing development
with no facilities and serviced only by private car becomes untenable and older,
inner-city urban housing is regenerated to meet environmental and climate
challenges.3
• Innovative dwelling technologies scenarios in which the housing future is
seen in terms of building technologies. These include prefabrication and modular
building components, increasing use of information and communications
technologies and ‘smart’ technologies.4
• House attachment scenarios in which communities strive to retain their elderly
residents as long as possible, in part to manage the flow of houses coming on to
the market as ageing baby boomers downsize. The need to retain older
residents makes it imperative to develop elder-friendly settlements that link older
people to shops, recreational facilities, public transport, home support services,
health facilities and other essential services. It also means establishing
innovative financial instruments to assist older people to upgrade their homes so
that they live in them longer. This is preferred to establishing older people in
retirement villages and investing in expensive long-term care facilities.5
• Housing specialisation scenarios which contrast with the house attachment
scenario. Housing specialisation scenarios envisage homes and residential areas
specialised according to life phase, life style and culture. Housing for the elderly,
for the young and for families are situated in different places and designed
1 Burke and Zakharov, 2006; The Copenhagen Institute for Futures Studies, 2001; Haus der Zukunft,
2009; Worthington, 2004.
2 Burke and Zakharov, 2006; The Copenhagen Institute for Futures Studies, 2001; Worthington, 2004.
3 Worthington, 2004; Burke and Zakharov, 2006; Haus der Zukunft, 2009; Myers and Ryu, 2007.
4 Haus der Zukunft, 2009; The Copenhagen Institute for Futures Studies, 2001; Worthington, 2004.
5 Myers and Ryu, 2007; Blake and Simic, 2005; The Myer Foundation, 2003.

132
differently. Services are targeted to the different areas. Where this works well, a
local community based on shared lifestyle and interests develops. Where this
doesn’t work, resources are inequitably spread and social problems develop.6
In New Zealand, Scion and BRANZ generated five scenarios depicting housing in
2030. Those scenarios echo some of the themes emerging in overseas scenarios.
Those scenarios are:7
• ‘Sunrise, sunset’ explored the implications of regional decline for the housing
market.
• ‘Change of heart’ explored the increasing difficulties of entering home ownership,
housing affordability, attitudes to debt and the durability and economic lifetime of
buildings.
• ‘Vertical village’ explored how the impacts of reduced resource availability and
rising prices may affect housing construction, transport and infrastructure. This
scenario envisages high rise living as one response.
• ‘Gates of heaven’ considered the rise of conservative values and increase in
gated communities.
• A reference scenario, based on extrapolation of current trends. This scenario
assumed a high number of beneficiaries and looked at the respective roles of
central government, local government, private landlords and community agencies
in the provision of housing.
6 The Copenhagen Institute for Futures Studies, 2001.
7 Scion and BRANZ, 2006.

133
Appendix B: An intergenerational model of housing demand
The basic framework
The model is an extension of the model used by Coleman (2008) to analyse the effect of
inflation, taxes and credit constraints on the housing market. In turn, it is based on the housing
model of Ortalo-Magné and Rady (1998, 2006). In the model, there are four cohorts, each of
which lives four periods and then dies. Agents have exogenously determined labour income and
consume a single non-storable good. They also gain utility from renting or purchasing a single
unit of housing. These housing units come in two sizes, small flats or large houses. Agents
choose among different patterns of housing and consumption to maximise their utility. Agents
can borrow or lend at exogenously determined interest rates, although young agents face credit
constraints. Agents can also become landlords. They pay income tax on any interest earnings or
on rental income. In the last period of life agents consume all wealth except their house, which is
inherited by a younger generation.
There is a construction sector that builds and modifies houses as demand changes. Separate
upward sloping supply curves for the quantity of flats and houses are specified, so that the
equilibrium number and mix of properties is determined endogenously. The model is solved for
three basic parameterisations. In the first, the supply of housing is assumed to be very elastic, so
that a 10 percent increase in the number of houses leads to a 1 percent increase in house prices.
In the second, the model is parameterised so that a ten percent increase in the quantity of houses
leads to a ten percent increase in house prices. Both high and low quality houses increase by a
similar amount, so that the price difference is little affected by housing volumes. The latter
assumption is in line with the long term evidence about house supply elasticity in New Zealand
and the United States (Coleman and Landon-Lane, 2008). In the third parameterisation, the price
of low quality houses increases by 1 percent for each 1 percent increase in the number of houses,
but the price of high quality houses goes up three times as fast.
Agents and period lengths
An agent lives for four periods labelled i = {0,1,2,3}. A period is Ti years long.
The periods can be any length, but in this model the periods 0 and 1 are chosen to be 10 years
long, period 2 (middle age) is 20 years, and the last period is varied from 10 to 20 years to reflect
the process of population ageing. It is useful to think of the model as consisting of a forty year
working life (ages 25 – 65) followed by a retirement period. Relatively short periods are needed at
the beginning of life to capture life-cycle income changes and the effects of bank imposed
borrowing constraints. Agents differ by income and while any pattern of income is possible,
agents are assumed to have a constant place in the within-cohort income distribution. Agent 1
has the lowest lifetime income. In period t, agent j born in period t-i has real labour income
,0
(1 )
ij
tjitiI
YgY
ω
τ
−
=− (1)
where j
ω
= idiosyncratic factor affecting agent j relative to average cohort earnings;
i
g = factor reflecting the life-cycle earnings of the cohort in its ith period; 0
ti
Y− = average
income of cohort at time of birth; and I
τ
reflects taxes on income.
Nominal income is ,ij
tt
PY , where t
P is the pre-tax price of the good. An indirect goods and
services tax is applied to goods other than housing at rate
g
τ
, so the post tax price of the good is
(1 )
g
t
P
τ
+. Incomes and the prices of goods are both assumed to increase at a constant inflation
rate π, where 1
π
+ 1tt
PP
+
=
.

134
Agents obtain utility from the consumption of goods and housing. An agent chooses an annual
flow of real consumption ji
t
c,, and has housing choices described by a vector of three indicator
variables ,,ijh
t
I=
{
}
,, ,, ,,
,,
ijR ijF ijH
ttt
III that equal one if the agent has housing tenure h in period i
of his or her life at time t, and zero otherwise. There are three possible housing tenures: an agent
can rent a flat (R), purchase a flat (F), or purchase a house (H). Age zero agents can live with
their parents at zero cost, although they gain zero utility from doing so. The ability to live at
home means that the total demand for housing declines as property prices increase. The model
could be specified so that young agents live together to economise on housing as an alternative
method of ensuring that the elasticity of total housing demand with respect to price is non-zero,
but this variation has not been modelled. In period t agents obtain utility
,,, , ,,
(, )ln()
ij ijh ij h ijh
tt t t
h
uc c vI=+
∑
I (2)
It is assumed
H
F
vv>as houses are bigger than flats, and FR
vv>, as agents can shape an
owned flat in their own image, whereas they cannot modify a rented flat. Agents can only live in
one housing unit in any period. Agents born at time t choose consumption and housing paths to
maximise discounted lifetime utility, weighting consumption each period by the number of years
in the period:
(
)
0
0
3
,,,
,
0
()
i
j
jTT
iijijh
ititi
i
UT uc
β
=−
++
=
∑
=∑I (3)
Inheritance
In the last period, agents are assumed to sell or realise all assets except their last owned housing
unit, repay any debts, and consume all of their wealth. They die at the end of period 3, at which
point their housing unit is distributed to younger cohorts. At time t a fraction i
κ
is left to the
cohort born at t-i for i=0,1,2; in this paper the weights are i
κ
= (0,0,1) so that agents do not
receive an inheritance until late in life. Two different inheritance assumptions have been analysed.
In the first case, the house that the jth old agent lived in is left to the jth middle aged agent, thus
preserving the intergenerational income ranking. In the second case, the houses of two adjoining
old agents j and j+1 are left to middle aged agent j+1, while middle aged agent j gets nothing.
The latter scheme, which is the preferred scheme, means that half the agents in an economy do
not inherit any wealth, so all of their assets are accumulated from their own saving. In the utility
maximisation equation below, Inheritt is the value of the inheritance left by the agents dying at the
end of time t-1 and inherited at time t.
A version of the model is also solved where old agents can take out a reverse mortgage equal to
20 percent of the value of the house. They are assumed to spend this on consumption goods.
When they die, this sum plus accumulated interest is deducted from the value of the house
before it is passed on to the beneficiaries of the estate.
Taxes
In Coleman (2008) five features of the tax system were modelled; in this paper these features are
retained and there is a further modification to capture the way income taxes may need to be
raised to pay for additional government expenditure on pensions and medical care. First, interest
and rent income is taxed at an agent’s marginal tax rate. There are two marginal tax rates: τ1 for
agents with real income in period t less than τ*; and τ2 ≥ τ1 for agents with real income greater
than or equal to τ*. It is assumed that the tax threshold is automatically adjusted for inflation and
thus constant in real terms. Secondly, the capital gains tax rate is zero. No property appreciation,
either for an owner-occupied house or for a leased flat, is taxed. Thirdly, imputed rent is tax

135
exempt. Fourthly, a landlord can deduct interest payments associated with a mortgage when
calculating taxable income. Thus a landlord pays tax on rent net of interest payments, but no tax
on any capital appreciation. Fifthly, there is a goods and services tax that is applied to
consumption but not to rent or property. In the model, the goods and service tax rate is set
endogenously at a rate that makes the total tax take (tax on capital income plus tax on goods and
services) equal to a set fraction of labour income, in this case *10
g
τ
=
percent. This ensures that
any changes in the structure of capital incomes taxes do not have revenue implications for the
Government.
The new tax is an additional tax on labour income. As the population ages, represented by an
increase in the length of the last period, government expenditure on the elderly is allowed to
increase. In the main parameterisations modelled, expenditure on pensions increases one for one
with the increase in the length of the last period. In the main alternative variation, there is no
increase in total government expenditure on pensions; in essence, the age of eligibility is increases
one for one with the increase in longevity, as happened in New Zealand in the 1990s. In addition,
medical expenditure on the elderly can be increased, by approximately 3 percent of GDP 1. If
Government expenditure is increased, it is assumed there is a corresponding increase in the taxes
on labour income2. While agents face different marginal tax rates, in the model it is assumed that
both taxes rates are increased by the same percentage. This reduces after-tax incomes at all ages.
The result is a direct intergenerational transfer from working age members of the population to
the elderly generation. The tax-pension scheme also transfers income from high income
members of the economy to low income members, as the increase in the pension is assumed to
be the same for all agents whereas the taxes are proportional to income.
The housing market
Flats and houses cost F
t
P and
H
t
P to purchase. Flats can also be leased, at price R
t
Pthat is paid
in advance at the beginning of the lease. The rent is paid to a landlord, who, for convenience, is
restricted to be an agent in period 2 of their lives. The number of landlords is endogenous; an
indicator variable ,, *ijR
t
I indicates whether or not the jth agent owns a rental property.3 Because
there is no uncertainty, the after-tax return from purchasing a flat in period t, leasing it, and
selling it in period t+1 is equal to the after-tax return from lending money. As such, the
relationship between rent, tax rates, flat prices, and interest rates is
221 2
(1 )(1(1 )) (1(1 ))
RTFFT
ttttt
PrPPr
ττ τ
+
−+− += +− (4)
or
2
22
(1 (1 )) (1 )
(1 )(1 (1 ) )
TF
RF tt
tt T
t
r
PP r
τπ
ττ

+− −+
=
−+−

(5)
where F
t
π
is the rate of price appreciation for flats. The right hand side of equation 4 is the after-
tax return in period t+1 from investing F
t
Pin interest earning bonds. The left hand side is the
after-tax return at t+1 from using the same sum to purchase a rental flat at time t. It comprises
1 This expenditure is assumed to have no effect on the utility that is derived from goods consumption;
basically it prevents a loss of utility that would otherwise occur due to ill health.
2 To minimise computation complexity, it proved easier to raise taxes on labour income than labour and
capital income. This means there is a small wedge between labour and capital taxes. Until recently in
New Zealand, capital and labour taxes have been the same, unlike the situation in many other countries
where social security taxes are levied on labour income but not capital income. In the last few years,
however, capital taxes have been lower than labour taxes. Thus it is not inconceivable that in the future
taxes could be raised on labour rather than capital income as longevity increases.
3 If there is demand for f flats, the f T0/T2 highest income individuals are assumed to own one flat each for
all T2 years of the second period. This adjustment is needed to ensure that the aggregation in the model is
done correctly.

136
the after-tax rent paid at time t and reinvested at interest, plus the untaxed proceeds from selling
the rental unit at time t+1. Since interest payments by landlords are fully tax deductible, the
return to a landlord is independent of their level of gearing. It is assumed that the landlords are
high income agents in period 2 of their lives, so after-tax returns are calculated using the top
marginal tax rate τ2.4
In each period, agents choose between one of the three housing options, or not having housing.
Consequently, there are potentially 256 different ways to climb the housing ladder. Rather than
calculate the utility of each of these patterns, I only let agents choose from a much smaller set of
patterns, H. To reduce the number of possible patterns, I impose a series of restrictions on the
lifetime housing options available to an agent. The three restrictions are: (i) only 0 period agents
may choose no housing; (ii) only period 0 and period 1 agents may choose to rent; and (iii) except
in the last period, agents’ housing choices must not worsen through time. By this means, the set
His reduced to 23, H={0RFF, 0RHF, 0RHH, 0FFF, 0FHF, 0FHH, 0HHF, 0HHH, RRFF,
RRHF, RRHH, RFFF, RFHF, RFHH, RHHF, RHHH, FFFF, FFHF, FFHH, FHHF, FHHH,
HHHF, HHHH}. An agent’s optimal discounted utility is calculated for each of these patterns,
and the agent is assumed to choose the pattern that provides the greatest discounted utility.
It should be noted that these set of options do not allow agents to rent in their last period. While
in reality some people do rent in retirement, this restriction is probably not particularly important
for three reasons. First, as an empirical matter, in New Zealand (and in Australia and the United
States) a large majority of retired people own their own houses. Those who don’t tend to have
low incomes, or have been subject to shocks such as ill health or divorce that are outside the
confines of this model. Since in the model the long term costs of renting are similar to the long
term costs of owning a house, there is no long term financial advantage to be gained by renting
rather than owning; indeed, the tax advantages to home ownership mean it is usually cheaper
than renting in the long run. Consequently, in this model there is no reason why households are
unable to own in the long term, although they may choose to rent while young in order to
smooth consumption. One would have to incorporate a degree of short-sightedness or
irrationality in the model to explain why people can afford to rent rather than own, or posit the
existence of rent subsidies, perhaps by local government. While it is true that a small subsidised
rental sector does exist in New Zealand, supply is limited and access is rationed, making it very
difficult to model in the absence of a story of how the supply may respond to increasing
longevity (Davey et al 2004).
Secondly, from an aggregate position, the total number of high and low quality houses is largely
unchanged whether people own their own homes or rent them. Consequently, in the long run,
there will be little difference in house prices and thus little difference in the indirect effects on
other cohorts. A modelling change that would make a significant difference would be to allow
older cohorts to move in with their families, which would reduce the total number of houses
demanded in the same way that letting young people live with their parents changes housing
demand. At the moment, this is not a common arrangement in New Zealand. If New Zealand
attitudes are similar to those expressed in Australia, which tend to be downright hostile to the
idea of living with one’s children, it is unlikely to be a common arrangement in the future either
(Olsberg and Winters 2005). It is possible that this will become a more popular arrangement in
the future, particularly among non-Pakeha New Zealanders, but this possibility has not been
modelled.
4 If there is a high demand to rent property, it is possible that the last landlord in the model is on the low
marginal tax rate. Nonetheless, it is assumed that competition between high income landlords determine
rents, so the top marginal rate is used.

137
The third reason to ignore the rental market among older people concerns the type of financial
services that are available in New Zealand. In the model, the costs of renting and owning are
similar, meaning that over a lifetime if one can afford to rent then one can afford to buy.
Nonetheless, in the model if people chose to rent rather than own in the last period they could
choose to leave a smaller inheritance and consume more. In principle, this could induce people to
rent instead of living in a large house, so that they could spend the difference on consumption. I
have chosen to ignore this option for two reasons. First, there is little evidence that many elderly
wish to people do this. Australian evidence strongly suggest that older people prefer to retain
ownership of their homes as it provides them with options to realise their wealth in the event
that bad shocks occur. Secondly, in most countries including New Zealand, the absence of a well
defined annuities market means it is not possible to sell up and obtain an actuarially fair annuity
that would enable a household to guarantee they could cover their rent given uncertainty over life
expectancy (St John 2006).
It is assumed that there is a construction sector that builds new flats and houses, or converts
house from one quality into another. Consequently the quantity of each type of property is
determined in equilibrium along with rents and prices. Linear supply functions are specified:
(
)
01
01
FFFFH
ttt
HFHHH
tt t
PQQ
PP Q
αα
αα
=+ +
=++ (6)
In this specification the price of flats is an increasing function of the total number of properties
(to reflect the possible scarcity of land), while the price of houses is determined as a variable
premium supply over the price of flats. In the first parameterisation the price of flats is very
elastic, with house prices increasing by 0.1% for a 1 percent increase in the number of houses
01
( 18000; 1;
FF
αα
==
01
10000; 1.5)
HF
αα
==
. In the second parameterisation, a 1 percent
increase in the number of properties leads to a 1 percent increase in prices 0
( 8000;
F
α
=−
115;
F
α
= 01
10000; 1.5)
HF
αα
==. In the third parameterisation, a 1 percent increase in the
number of properties leads to a 1 percent increase in the price of small houses, but prices of large
houses increase three times as fast. 01
( 8000; 15;
FF
αα
=− = 01
22500; 30)
HF
αα
==.
The lending market
There is a non-profit financial intermediary that accepts deposits and issues mortgages at an
interest rate t
r. Agents can lend or borrow as much as the bank allows them at the one period
interest rate t
r, subject only to the restriction that they have a zero debt position at the end of
their life. The economy can either be closed, in which case the interest rate is determined
endogenously and aggregate deposits equal aggregate loans, or open, in which case real interest
rates are determined exogenously and the net foreign asset position can be non-zero. There are
no restrictions on the deposit contract, and interest on a deposit made at time t is paid at time
t+1. Agents pay tax on this interest at their marginal tax rate, but do not get a tax deduction for
interest paid on borrowed funds unless they borrow to fund a rental property.5 An agent’s
positive funds are labelled ,ij
t
B
.
The mortgage contract is subject to three restrictions.6
i) The loan to value restriction.
5 To reduce computational complexity, the marginal tax rate is calculated on the basis of labour income,
not total income. Otherwise the marginal tax rate is determined endogenously.
6 Note that banks impose these restrictions even though there is no uncertainty in the model

138
The mortgage may not exceed a certain fraction of the value of the property. In particular, the
gross amount borrowed ,ij
t
D−cannot exceed the value of property multiplied by the loan to
value ratio θ: that is
,,,
,
ij h ijh
ttt
hFH
DPI
θ
−
∈
≤
∑
(7)
(Note ,0
ij
t
D−> if the agent borrows.) This restriction means that agents who rent cannot
borrow to smooth consumption, although they can save.
ii) The regular cash payment restriction.
Banks only issue η-year table mortgages, and require a “cash payment” in the period the
mortgage is issued. This restriction is imposed to mimic a standard condition of a table mortgage,
namely that a customer is required to make regular cash repayments CP of equal size throughout
the life of the mortgage rather than a large repayment at its terminal date. The payment size CP is
chosen to ensure the mortgage is retired at the end of the term: if D0- is initially borrowed, the
annual payment is
0(1 )
(1 ) 1
r
CP D r r
η
η
−
+
=
+−

(8)
and η is assumed to be 25 years.7
It is not possible to exactly replicate this feature of a standard mortgage contract in the model.
However, a close approximation is achieved by requiring the customer to make a payment that
pays off some of the interest and principal in any period he or she has debt. In particular, a
customer with gross debt of ,ij
t
D− is required to open up a separate account with the bank and
make a deposit of size
()
()
/
,* ,
/
1
111
T
t
ij ij t
tt T
tt
r
r
DD rr
η
η
−


+
=


+
+
−




(9)
into this account. This deposit earns (untaxed) interest at rate rt. This means the net borrowing
position of a borrowing agent, ,, ,*ij ij ij
tt t
DD D
−
=−
, is less than the gross borrowing position.
Without this “cash payment” feature, many agents would prefer to purchase rather than rent
simply because the interest payment occurs a period later than the rental payment. When the
“cash payment” requirement is imposed, purchasing a house requires a larger payment to the
bank in period t than the cost of renting a house.
iii) The mortgage-repayment-to-income restriction.
The maximum amount an agent can borrow is restricted to ensure the mortgage repayment given
by equation 8 is smaller than a fraction δ of income:
()
()
/
,
/
1
111
T
t
ij ij
t
ttt
T
tt
r
r
DPY
rr
η
η
δ
−
+≤

++−


(10)
Note that this constraint is expressed in terms of nominal interest rates.
The mortgage conditions are only imposed on agents in periods 0 and 1 of their lives in order to
simplify the solution algorithm. In period 2 agents can borrow unrestricted amounts. The
absence of a restriction in period 2 has little effect because agents are in their peak earning years,
7 Until recently, this has been the standard term for a table mortgage in Australia and New Zealand.

139
receive their inheritance at this time, and are actively saving or reducing debt to finance their
retirement.
Utility maximisation
An agent born at time t solves the following constrained maximisation problem (the jth
superscript is omitted):
(
)
0
0
,
3
,,,
,
{,}
0
()
i
j
j
ih
ti ti
TT
iijijh
ititi
c
i
Max U T u c
β
=
++
−
++
=
∑
=∑
II (11)
00 0 0,
00 0 0
11 11
3
,1,
1
1,
(1 )
(1) (1(1)) (1)
(1 ) (1 )
tg hh
tt t tt tt
h
iii i i i i
i t ti ti ti ti ti ti ti
ig i hih hih
i i t t ti ti ti ti i ti
ihhFH
t
PT Y B D T Pc P I
TPY B r D r B D
T Pc P I P I Inherit
P
λτ
πτ
λπτ κ
++− +− +− +− + +
−
++ ++− +
==

−−+−+−


+++−−+−+
−−++ − + +
+
∑
∑∑∑
,* 1,*
11 1
(1 ) ( (1 (1 ))
RiiRFF iiR
ititititi ti
IPP r I
ττ
−
++++−+− +−







−+−+−


1
,,
0
ihih
iti titi
ih
DPI
χθ
−
+++
=

−−


∑∑
() ()
/
1
,
/
0
33
00
(1 )
1(1)1
T
ii
ti ti
iti ti
T
iti ti
ii
iti i ti
ii
rr
DY
rr
BD
τ
τ
φδ
ςν
−++
++
=++
++
==


+
−−



++−


−−
∑
∑∑
The first line of equation 11 is the utility maximisation equation, equation 3. Lines 2 and 3 of
equation (11) are the budget constraints facing the agent in the four periods. Note the budget
constraints as well as the utility function have an adjustment for the number of years in each
period. Lending and borrowing are entered separately as there are different after tax interest rates,
and there are terms to reflect inheritance and rental income. Lending and borrowing in period 3
are restricted to equal zero, and i
τ
is the marginal tax rate applying in period i of the agent’s life.
The Kuhn-Tucker conditions in lines 4 and 5 reflect the loan-to-value ratio constraints and the
mortgage-repayment-to-income ratio constraints respectively. The Kuhn-Tucker conditions in
line 6 reflect the requirement that non-negative amounts are lent and borrowed. The agent solves
the problem by calculating the maximum utility for each housing pattern in the set H, and then
selecting the housing pattern with the highest utility. The use of log-linear utility functions means
it is relatively straightforward to calculate an analytical solution for the optimal consumption path
given a particular housing pattern, even though each solution has 48 parts corresponding to the
48 possible combinations of Kuhn-Tucker conditions.8
Equilibrium conditions
In the simulations, the steady state equilibrium is found for an open economy in which agents
borrow or lend at the world interest rate. In the steady state, the following price relationships
hold:
(1 ) / (1 )
tt
rr
π
++= (12a)
8 In the periods 0 and 1, the financial asset position can be positive, zero, negative, or equal to the
borrowing constraint; in period 2, the financial asset position can be positive, zero or negative; and in
period 3 it is zero.

140
11
F
F
t
F
t
P
P
π
+=+ (12b)
H
H
t
F
t
P
P
ρ
= (12c)
2
22
(1 (1 )) (1 )
(1 ) (1 (1 ))
RTF
R
tt t
FT
tt
Pr
Pr
τπ
ρ
ττ

+− −+
==

−+−

(12d)
Equation (12a) states that real interest rates are constant. In the open economy model, the rate r
is the foreign real interest rate. Equation (12b) states that flat prices appreciate at a constant rate.9
Equation (12c) states that the ratio of house prices to flat prices is constant. Equation (12d) is a
restatement of equation 5, linking rents to interest rates and the flat price appreciation rate.
For a set of parameters
{
0
,
,, , ,,,,,, , , ,,,
HF
it j i h i
NTTY g v n n
ω
πβ κ ηθ
H
}
**
12
,,,,
g
δ
ττττ
,
pension expenditure, medical expenditure, and labour taxes L
τ
, and housing parameters
{
}
01 0 1
,,,
FFHH
α
ααα
the steady state equilibrium is described by a set of prices
{
}
,, ,
FHR
r
π
ρρ
,
a GST rate
g
τ
, a set of housing and consumption demands ,,,
, 0,...,3
{}
sj sjh
tis tis s
c−+ −+ =
I for each agent j
in each cohort born in period t-i, and a net foreign asset position Btnet such that all agents have
maximal utility and
33
,*,
01 01
(1 ) 1
NN
ij g ij net
it t i t
ij ij
r
Tc y TB
π
τπ
== ==
−

=− −

+

∑∑ ∑∑ (13a)
3
,, 2,,*
01 1
()
NN
ij ij F jR net
tt tt t
ij j
B
DPI B
== =
−− =
∑∑ ∑ (13b)
3
*,
01
33
, , 2, 2, , * 3, 2, , *
111
01 01 1 1
N
gij
t
ij
NN N N
g
ij ij ij R j jR F j jR
it i t t t t t t t t
ij ij j j
y
Tc TB r P I P r I
τ
ττττ
==
−−−
== == = =
=
++−
∑∑
∑∑ ∑∑ ∑ ∑
(13c)
and
3
,, ,,
01
()
N
ijR ijF F
it t
ij
TI I Q
==
+=
∑∑ (13d)
3
,,
01
N
ijH H
it
ij
TI Q
==
=
∑∑ (13e)
where and
FH
QQare the number of houses produced when the supply of properties is elastic,
00
11
and
HFH FF
H
FH
HF
PP P
QQQ
αα
αα
−− −
==−
.
9 If the number of flats and houses is determined exogenously, an equilibrium can be found in which
incomes in the economy grow at a constant rate, and in this case the steady state equilibrium will have
property prices growing at a faster rate than the rate of inflation. If the number of properties is determined
endogenously and the income growth rate is positive, the only possible steady states occur when all people
live in large houses, or when the quality of flats and houses steadily improves. This paper does not analyse
these cases.

141
Equation (13a) requires that total consumption plus tax plus real earnings on the net bond
position in each period equals total production. Equation (13b) is the net supply of foreign
bonds, given that landlords are assumed to borrow 100 percent of the price of a flat. This will
change through time if there is economic growth or inflation. Equation 13c says that the total tax
take is equal to total GST revenue plus tax on interest and rent minus the tax deduction for
landlords. Note that while it has been assumed landlords borrow 100 percent of the value of the
property, tax revenue would not change if landlords had different gearing as the tax rate on
positive balances is the same as the tax deduction they get when they borrow. Equations (13d)
and (13e) require that the total demand for flats equals the supply of flats, and that the total
demand for houses equals the supply of houses.
Parameterisation
The set of baseline parameters
{
0
,,,,,,,,,, ,,
H
F
tji hi
NTY g v n n
ωπβκ
H
}
**
12
,,, , , ,
g
η
θδτ τ τ τ
are nearly the same as those used by Coleman (2008) and have been
chosen to approximate features of the New Zealand economy.10 These are listed in table 12.
Except for income distribution, the income parameters approximately match the basic lifecycle
and cohort income patterns of New Zealanders reported in census documents, 1966–2001, under
the assumption that the basic agent is a household comprised of a male and female of the same
age. For simplicity, after tax income is assumed to be uniformly distributed over the range
$20,000 to $80,000.
In the baseline model, the discount rate is 3 percent, the real interest rate is 5 percent (assumed
equal to the world rate), and banks impose borrowing restrictions that limit households to
borrow up to 80 percent of the value of a property and to pay no more than 30 percent of their
income in debt servicing.
The tax rates also reflect New Zealand tax settings in 2000. In the baseline model, the marginal
tax is 20 percent for households with incomes less than $50,000, and 33 percent for households
with incomes above that level. The model is also solved for a set of tax rules that exclude the
inflation component of interest income from tax, and which only allow landlords to deduct real
interest payments from their taxable income.11 The GST rate was chosen to ensure that capital
income taxes and consumption taxes total to 10 percent of labour income.
The parameters (, , )
RFH
υυυ
= (0.33,0.35,0.45) mean (approximately) that at the margin a
household would be prepared to spend a third of their income on rent rather than have no
accommodation; the benefit from living in an owner-occupied flat rather than a rented flat is 2
percent, and the additional benefit from living in a large house a further 10 percent. Housing
supply parameters were chosen so that that the quantity of flats would increase by approximately
one percent for a one percent increase in prices, but that the number of houses and flats would
be approximately the same in the elastic and inelastic cases.
Solution technique
The solution is found numerically. The algorithm searches for a set of prices
{
}
3,..0,...3
,,,
gRFH
ttt
t
PPP
τ
=− so that when each agent j born in period t-i, i= 0,…3 is consuming a
sequence of goods and tenure options ,,,
, 0,...,3
{}
sj sjh
tis tis s
c−+ −+ =
Ithat solves their constrained utility
10 Coleman (2007) uses 5 cohorts, not 4, and the parameters have been slightly modified.
11 In this case the constraints in equation 11 and the aggregation condition (13c) are modified accordingly.

142
problem given by equation (11), the aggregation conditions 13a–13e applied at time t are satisfied.
In the steady state, the vector
{
}
3,..0,...3
,,,
gRFH
ttt
t
PPP
τ
=− can be calculated from the vector
*
0
{, , , }
g
FFH
PP
τ
πρ
= and the parameters
{
}
2
,r
τ
.
The basic structure of the algorithm is as follows.
a) Let the vector *,
0
{, , , }
kgFFHk
PP
τπρ
= be the kth estimate of the steady state solution
*
P. Given *,k
P, calculate the optimal consumption and housing tenure paths for each
of the N households who are born at t=0 by searching over the different possible tenure
paths in the set H.
b) Use these results to calculate the demand for consumption goods and housing at time
t=0 for all households in the economy.
c) Use these results to calculate aggregate consumption, the aggregate demand for flats, and
the aggregate demand for houses at time t=0. Then calculate the excess demand
functions given by 13a–13e.
d) If the excess demand functions are not sufficiently close to zero, a new estimate of the
equilibrium prices *
P,*, 1k
P+, is calculated. This is done using a discrete approximation
to the Newton-Rhapson method. A set of quasi-derivatives is calculated by recalculating
the set of excess demand functions at the prices 1
{,,,}
g
FFH
P
τ
πρ
+∆ ,
2
{, , , }
g
FFH
P
τ
πρ
+∆ , 3
{, , , }
gFF H
P
τ
πρ
+∆ and {, , ,
gFFH
P
τπρ
+ 4}∆.
These quasi derivatives are used to calculate the updated price vector using Broyden’s
method. The process is continued until the sequence of estimates *,k
Pconverges.

143
Table 1. Length of time in current house: fraction of each age group, 2006.
65-74 75-84 85+ 65+
% % % % cumulative
0-4 years 30% 27% 37% 30% 30%
5-9 17% 15% 15% 16% 46%
10-14 13% 13% 10% 12% 58%
15-19 9% 10% 7% 9% 67%
20-24 6% 7% 6% 6% 73%
25-29 5% 5% 5% 5% 79%
30+ 21% 23% 20% 21% 100%
Source: Statistics New Zealand, 2006 census.
Table 2. Fraction of people aged 65-69 in 1991 by length of time remaining in the same
house.
<5 years in
house, 1991
5+ years in
home, 1991
<5 yrs in
house, 1996
Fraction in
house x years
later
5 years 62% 79% 62%
10 years 51% 63% 42%
15 years 33% 48%
Source: Statistics New Zealand, 1991 - 2006 census.
Table 3. House size for people over 65, 2006
Number of bedrooms percentages
1 2 3 All 1 2 3
All 65-84 20,289 98,055 274,035 392,379 5.2% 25.0% 69.8%
All 85+ 3,918 15,504 17,760 37,182 10.5% 41.7% 47.8%
All 65+ 24,207 113,559 291,795 429,561 5.6% 26.4% 67.9%
Couples 65-84 4,236 45,639 173,205 223,080 1.9% 20.5% 77.6%
Couples85+ 393 4128 6933 11,454 3.4% 36.0% 60.5%
Single M 65-84 6,543 10,617 14,832 31,992 20.5% 33.2% 46.4%
Single M 85+ 777 2064 1809 4,650 16.7% 44.4% 38.9%
Single F 65-84 8,988 33,075 34,518 76,581 11.7% 43.2% 45.1%
Single F 85+ 2703 8301 5073 16,077 16.8% 51.6% 31.6%
All couples 4,629 49,767 180,138 234,534 2.0% 21.2% 76.8%
All singles 19,011 54,057 56,232 129,300 14.7% 41.8% 43.5%
All M 65-84 9,144 38,244 135,774 183,162 5.0% 20.9% 74.1%
All M 85+ 1,035 4,968 7,152 13,155 7.9% 37.8% 54.4%
All F 65-84 11,148 59,808 138,264 209,220 5.3% 28.6% 66.1%
All F 85+ 2,883 10,536 10,608 24,027 12.0% 43.9% 44.2%
Source: Statistics New Zealand census data, 2006, special tables.

144
Table 4. House size for people over 65, 1996
Number of bedrooms percentages
1 2 3 All 1 2 3
All 65-84 22,842 111,813 206,637 341,292 6.7% 32.8% 60.5%
All 85+ 3,165 10,668 10,686 24,519 12.9% 43.5% 43.6%
All 65+ 26,007 122,481 217,320 365,808 7.1% 33.5% 59.4%
Couples 65-84 4,896 54,231 126,039 185,166 2.6% 29.3% 68.1%
Couples85+ 303 2778 3801 6,882 4.4% 40.4% 55.2%
Single M 65-84 6,312 10,122 10,815 27,249 23.2% 37.1% 39.7%
Single M 85+ 564 1326 1032 2,922 19.3% 45.4% 35.3%
Single F 65-84 11,106 37,776 28,617 77,499 14.3% 48.7% 36.9%
Single F 85+ 2247 5550 2721 10,518 21.4% 52.8% 25.9%
All couples 5,199 57,009 129,840 192,048 2.7% 29.7% 67.6%
All singles 20,229 54,774 43,185 118,188 17.1% 46.3% 36.5%
All M 65-84 9,213 42,720 100,788 152,721 6.0% 28.0% 66.0%
All M 85+ 771 3,378 4,074 8,223 9.4% 41.1% 49.5%
All F 65-84 13,629 69,090 105,849 188,568 7.2% 36.6% 56.1%
All F 85+ 2,394 7,287 6,612 16,293 14.7% 44.7% 40.6%
Source: Statistics New Zealand census data, 1996, special tables.
Table 5. House size by mobility, 1996 and 2006.
Number of bedrooms percentages
1 2 3 All 1 2 3
2006
All 65-84 18,669 91,443 252,111 362,223 5.2% 25.2% 69.6%
All 85+ 3,672 14,454 16,257 34,383 10.7% 42.0% 47.3%
All 65+ 22,341 105,891 268,368 396,600 5.6% 26.7% 67.7%
Same 65-84 9,066 56,859 186,183 252,108 3.6% 22.6% 73.9%
Same house 85+ 1,869 10,491 12,921 25,281 7.4% 41.5% 51.1%
Same house 65+ 10,935 67,347 199,104 277,386 3.9% 24.3% 71.8%
Moved 65-84 9,603 34,584 65,928 110,115 8.7% 31.4% 59.9%
Moved 85+ 1,803 3,963 3,336 9,102 19.8% 43.5% 36.7%
Moved 65+ 11,406 38,544 69,264 119,214 9.6% 32.3% 58.1%
1996
All 65-84 21,699 107,691 195,822 325,212 6.7% 33.1% 60.2%
All 85+ 3,045 10,287 9,864 23,196 13.1% 44.3% 42.5%
All 65+ 24,744 117,978 205,686 348,408 7.1% 33.9% 59.0%
Same 65-84 12,606 75,456 157,314 245,376 5.1% 30.8% 64.1%
Same house 85+ 2,031 8,280 7,929 18,240 11.1% 45.4% 43.5%
Same house 65+ 14,640 83,736 165,243 263,619 5.6% 31.8% 62.7%
Moved 65-84 9,093 32,235 38,508 79,836 11.4% 40.4% 48.2%
Moved 85+ 1,014 2,007 1,935 4,956 20.5% 40.5% 39.0%
Moved 65+ 10,104 34,242 40,443 84,789 11.9% 40.4% 47.7%
Source: Statistics New Zealand census data, 1996 and 2006, special tables.

145
Table 6: Supply curve 1: both curves very elastic
Length of last period 10 12 15 17 20
Total population 1000 1040 1100 1140 1200
Taxes raised to pay additional pension expenses
Number small houses 405 415 422 434 443
Number big houses 565 593 643 668 717
Total number houses 970 1008 1064 1102 1160
% new houses large 74% 83% 78% 80%
Price small house 199,000 200,000 201,000 202,000 203,000
Price large house 317,000 318,000 321,000 323,000 325,000
% cohort 0 owning 56% 54% 52% 49% 48%
% cohorts 0-1 large 36% 34% 32% 30% 27%
% cohort 2 large 95% 95% 94% 93% 90%
% cohort 3 large 19% 32% 48% 53% 62%
% total large 58% 59% 60% 61% 62%
Taxes increased to pay additional medical and pension expenses
Number small houses 405 418 438 446 467
Number big houses 565 588 624 652 686
Total number houses 970 1006 1062 1098 1152
% new houses large 63% 64% 68% 66%
Price small house 199,000 200,000 201,000 202,000 203,000
Price large house 317,000 318,000 320,000 322,000 324,000
% cohort 0 owning 56% 54% 50% 47% 43%
% cohorts 0-1 large 36% 34% 29% 27% 25%
% cohort 2 large 95% 94% 93% 91% 88%
% cohort 3 large 19% 32% 46% 53% 59%
% total large 58% 58% 59% 59% 60%
Taxes constant, no increase in total pension payment
Number small houses 409 412 414 420 430
Number big houses 562 599 656 690 741
Total number houses 970 1011 1070 1110 1171
% new houses large 91% 95% 92% 89%
Price small house 200,000 200,000 202,000 202,000 204,000
Price large house 317,000 319,000 322,000 323,000 326,000
% cohort 0 owning 56% 55% 56% 57% 57%
% cohorts 0-1 large 36% 36% 37% 37% 37%
% cohort 2 large 95% 95% 94% 92% 89%
% cohort 3 large 18% 31% 45% 52% 60%
% total large 58% 59% 61% 62% 63%
In section 1, taxes are increased as the population ages to pay for higher aggregate pension
expenditure. When the elderly population doubles, pension expenditure increases by
approximately 5% of GDP
In section 2, taxes are increased as the population ages to pay for higher aggregate pension and
medical expenditure. When the elderly population doubles, expenditure increases by
approximately 8% of GDP.
In section 3, pension expenditure is maintained at initial levels and taxes are unchanged.

146
Table 7: Supply curve 2: both curves upward sloping
Length of last period 10 12 15 17 20
Total population 1000 1040 1100 1140 1200
Taxes raised to pay additional pension expenses
Number small houses 409 416 423 422 428
Number big houses 556 582 624 658 700
Total number houses 965 998 1047 1080 1128
% new houses large 77% 82% 88% 88%
Price small house 200,000 209,000 223,000 233,000 246,000
Price large house 311,000 321,000 336,000 347,000 362,000
% cohort 0 owning 52% 47% 40% 37% 31%
% cohorts 0-1 large 35% 32% 27% 25% 23%
% cohort 2 large 95% 94% 93% 92% 91%
% cohort 3 large 18% 33% 48% 56% 61%
% total large 58% 58% 60% 61% 62%
Taxes increased to pay additional medical and pension expenses
Number small houses 405 417 425 435 442
Number big houses 559 580 619 639 677
Total number houses 964 997 1044 1074 1119
% new houses large 65% 75% 73% 76%
Price small house 199,000 209,000 222,000 231,000 244,000
Price large house 311,000 321,000 336,000 345,000 359,000
% cohort 0 owning 52% 46% 38% 33% 29%
% cohorts 0-1 large 35% 31% 26% 23% 21%
% cohort 2 large 95% 94% 93% 91% 89%
% cohort 3 large 20% 34% 49% 53% 59%
% total large 58% 58% 59% 59% 60%
Taxes constant, no increase in total pension payment
Number small houses 409 413 404 402 410
Number big houses 556 588 648 685 730
Total number houses 965 1000 1052 1087 1140
% new houses large 89% 105% 105% 99%
Price small house 200,000 210,000 225,000 235,000 250,000
Price large house 311,000 322,000 339,000 350,000 366,000
% cohort 0 owning 52% 48% 43% 43% 42%
% cohorts 0-1 large 35% 33% 32% 31% 29%
% cohort 2 large 95% 95% 93% 93% 90%
% cohort 3 large 18% 32% 49% 57% 64%
% total large 58% 59% 62% 63% 64%
In section 1, taxes are increased as the population ages to pay for higher aggregate pension
expenditure. When the elderly population doubles, pension expenditure increases by
approximately 5% of GDP
In section 2, taxes are increased as the population ages to pay for higher aggregate pension and
medical expenditure. When the elderly population doubles, expenditure increases by
approximately 8% of GDP.
In section 3, pension expenditure is maintained at initial levels and taxes are unchanged.

147
Table 8: Supply curve 3: high quality supply curve steeply upward sloping
Length of last period 10 12 15 17 20
Total population 1000 1040 1100 1140 1200
Taxes raised to pay additional pension expenses
Number small houses 398 424 460 480 517
Number big houses 567 574 588 599 610
Total number houses 965 998 1047 1079 1127
% new houses large 22% 25% 29% 27%
Price small house 199,000 209,000 223,000 232,000 246,000
Price large house 309,000 323,000 345,000 361,000 381,000
% cohort 0 owning 52% 47% 39% 35% 30%
% cohorts 0-1 large 36% 31% 25% 23% 19%
% cohort 2 large 96% 94% 92% 87% 82%
% cohort 3 large 21% 32% 41% 47% 51%
% total large 59% 58% 56% 56% 54%
Taxes increased to pay additional medical and pension expenses
Number small houses 398 424 461 470 517
Number big houses 567 573 584 599 603
Total number houses 964 997 1044 1069 1120
% new houses large 20% 21% 31% 23%
Price small house 199,000 209,000 222,000 229,000 244,000
Price large house 309,000 322,000 342,000 358,000 374,000
% cohort 0 owning 52% 46% 38% 41% 25%
% cohorts 0-1 large 36% 30% 24% 22% 18%
% cohort 2 large 96% 94% 91% 86% 81%
% cohort 3 large 21% 33% 41% 50% 52%
% total large 59% 58% 56% 56% 54%
Taxes constant, no increase in total pension payment
Number small houses 398 424 461 487 524
Number big houses 567 576 592 601 616
Total number houses 965 1000 1052 1088 1140
% new houses large 26% 28% 27% 28%
Price small house 200,000 210,000 225,000 235,000 250,000
Price large house 310,000 325,000 349,000 364,000 388,000
% cohort 0 owning 52% 47% 45% 41% 40%
% cohorts 0-1 large 36% 32% 27% 26% 24%
% cohort 2 large 95% 94% 90% 87% 80%
% cohort 3 large 21% 30% 41% 45% 50%
% total large 59% 58% 56% 55% 54%
In section 1, taxes are increased as the population ages to pay for higher aggregate pension
expenditure. When the elderly population doubles, pension expenditure increases by
approximately 5% of GDP
In section 2, taxes are increased as the population ages to pay for higher aggregate pension and
medical expenditure. When the elderly population doubles, expenditure increases by
approximately 8% of GDP.
In section 3, pension expenditure is maintained at initial levels and taxes are unchanged.

148
Table 9: Variations in interest rates and inflation rates for supply curve 2
Length of last period 10 12 15 17 20
Total population 1000 1040 1100 1140 1200
inflation = 0, real interest rates = 5
Number small houses 389 397 408 416 430
Number big houses 573 598 637 662 695
Total number houses 962 995 1045 1077 1125
% new houses large 74% 77% 77% 75%
Price small house 199,000 208,000 222,000 232,000 246,000
Price large house 311,000 321,000 336,000 346,000 361,000
% cohort 0 owning 75% 72% 67% 64% 59%
% cohorts 0-1 large 43% 40% 36% 33% 28%
% cohort 2 large 94% 93% 92% 91% 94%
% cohort 3 large 12% 27% 43% 50% 52%
% total large 60% 60% 61% 61% 62%
inflation = 0, real interest rates = 4
Number small houses 411 427 447 457 488
Number big houses 564 583 614 639 658
Total number houses 975 1010 1061 1096 1145
% new houses large 55% 58% 62% 55%
Price small house 203,000 212,000 227,000 237,000 251,000
Price large house 314,000 325,000 340,000 351,000 366,000
% cohort 0 owning 51% 46% 35% 27% 22%
% cohorts 0-1 large 45% 42% 38% 35% 30%
% cohort 2 large 95% 95% 94% 93% 93%
% cohort 3 large 3% 15% 30% 38% 42%
% total large 58% 58% 58% 58% 57%
inflation = 2, real interest rates = 4
Number small houses 434 438 438 442 450
Number big houses 545 575 624 654 696
Total number houses 979 1013 1062 1096 1146
% new houses large 87% 95% 93% 90%
Price small house 204,000 213,000 227,000 237,000 251,000
Price large house 315,000 325,000 341,000 351,000 367,000
% cohort 0 owning 9% 6% 2% 0% 0%
% cohorts 0-1 large 37% 34% 31% 28% 26%
% cohort 2 large 96% 96% 95% 94% 93%
% cohort 3 large 6% 24% 41% 48% 55%
% total large 56% 57% 59% 60% 61%
In each section, taxes are increased as the population ages to pay for higher aggregate pension
expenditure. When the elderly population doubles, pension expenditure increases by
approximately 5% of GDP

149
Table 10: Additional variations in supply curves, inflation = 2.
Length of last period 10 12 15 17 20
Total population 1000 1040 1100 1140 1200
Both house prices increased
Number small houses 403 400 397 411 412
Number big houses 528 563 613 633 678
Total number houses 931 963 1010 1044 1090
% new houses large 109% 108% 93% 95%
Price small house 266,000 275,000 289,000 299,000 312,000
Price large house 377,000 387,000 402,000 412,000 427,000
% cohort 0 owning 22% 21% 20% 21% 19%
% cohorts 0-1 large 27% 25% 23% 21% 18%
% cohort 2 large 94% 93% 92% 91% 90%
% cohort 3 large 21% 38% 52% 54% 62%
% total large 57% 58% 61% 61% 62%
High quality house prices increased
Number small houses 550 592 631 644 655
Number big houses 416 407 419 437 474
Total number houses 966 999 1049 1081 1129
% new houses large -25% 4% 19% 36%
Price small house 200,000 209,000 224,000 233,000 247,000
Price large house 355,000 364,000 379,000 389,000 404,000
% cohort 0 owning 45% 42% 38% 35% 27%
% cohorts 0-1 large 23% 21% 19% 17% 15%
% cohort 2 large 81% 79% 76% 74% 70%
% cohort 3 large 0% 3% 13% 22% 33%
% total large 43% 41% 40% 40% 42%
High quality house prices increased and quality improved
Number small houses 375 377 389 391 390
Number big houses 588 620 656 687 736
Total number houses 963 996 1045 1077 1125
% new houses large 96% 83% 86% 91%
Price small house 199,000 208,000 222,000 232,000 246,000
Price large house 359,000 370,000 385,000 395,000 410,000
% cohort 0 owning 63% 60% 55% 52% 44%
% cohorts 0-1 large 36% 33% 28% 26% 24%
% cohort 2 large 96% 95% 94% 93% 92%
% cohort 3 large 30% 45% 56% 62% 68%
% total large 61% 62% 63% 64% 65%
In each section, taxes are increased as the population ages to pay for higher aggregate pension
expenditure. When the elderly population doubles, pension expenditure increases by
approximately 5% of GDP

150
Table 11: Reverse mortgages and inheritances; supply curve 2, inflation = 2.
Length of last period 10 12 15 17 20
Total population 1000 1040 1100 1140 1200
Supply curve 2: standard inheritance, no reverse mortgage
Number small houses 409 416 423 422 428
Number big houses 556 582 624 658 700
Total number houses 965 998 1047 1080 1128
% new houses large 77% 82% 88% 88%
Price small house 200,000 209,000 223,000 233,000 246,000
Price large house 311,000 321,000 336,000 347,000 362,000
% cohort 0 owning 52% 47% 40% 37% 31%
% cohorts 0-1 large 35% 32% 27% 25% 23%
% cohort 2 large 95% 94% 93% 92% 91%
% cohort 3 large 18% 33% 48% 56% 61%
% total large 58% 58% 60% 61% 62%
Supply curve 2: standard inheritance, reverse mortgage
Number small houses 368 377 400 407 406
Number big houses 596 622 649 674 724
Total number houses 964 998 1049 1081 1130
% new houses large 75% 62% 67% 77%
Price small house 199,000 209,000 224,000 233,000 247,000
Price large house 312,000 322,000 338,000 348,000 363,000
% cohort 0 owning 54% 48% 44% 42% 40%
% cohorts 0-1 large 35% 32% 27% 25% 24%
% cohort 2 large 94% 93% 90% 88% 85%
% cohort 3 large 41% 52% 60% 65% 72%
% total large 62% 62% 62% 62% 64%
Supply curve 2: different inheritance, no reverse mortgage
Number small houses 386 382 395 405 414
Number big houses 577 614 650 673 713
Total number houses 963 995 1044 1077 1127
% new houses large 114% 90% 84% 83%
Price small house 200,000 209,000 223,000 232,000 247,000
Price large house 312,000 322,000 337,000 348,000 363,000
% cohort 0 owning 56% 53% 46% 42% 35%
% cohorts 0-1 large 35% 32% 27% 26% 24%
% cohort 2 large 97% 97% 95% 93% 90%
% cohort 3 large 25% 42% 54% 58% 65%
% total large 60% 62% 62% 62% 63%
In each section, taxes are increased as the population ages to pay for higher aggregate pension
expenditure. When the elderly population doubles, pension expenditure increases by
approximately 5% of GDP

151
Table 12. Key model parameters
Parameter Description Value Source/Rationale
Ti
N
Length of period
Population of
cohort
(10, 10, 20, 10-
20) years
400
To approximate work
history from age 25 – 75
Arbitrary; initial
population = 2000
0
t
Y Average income
of 25-35 cohort
50000 NZ Census 2001: average
male and female
earnings, 25-35 year olds,
are $32800 and $23300
respectively
j
ω
Income
distribution
Uniform on
[20000,80000]
i
g Lifecycle income
pattern
{1, 1.5, 1.5,
0.1+25000}
NZ Census, 1966- 2001.
Based on real lifecycle
earnings of cohort
turning 20 in 1946, 1961.
Β Discount factor 0.97 annualised Arbitrary
{
}
,,
RFH
vvv Utility from
housing
{
}
0.33,0.35,0.45
Arbitrary
i
κ
Inheritance
timing
{0,0,1,0} Arbitrary
Η Mortgage term 25 years Standard mortgage term
δ Maximum debt
service-income
ratio
30% Reflects NZ banking
conditions
Θ Maximum loan
to value ratio
80% Reflects NZ banking
conditions
*
g
τ
GST rate 0.10 Tax take equals 10% of
labour income; arbitrary,
but close to NZ rate.
*
12
,,
τ
ττ
Income tax rates
and threshold
20%, 33%
$50000
Reflects NZ rates in
2000.
01
,
FF
α
α
01
,
H
H
α
α
Housing supply
parameters
(10, 180000
15, 100000)
(150, -80000
10, 100000)
(150, -80000
300, -225000)
Supply version 1.
Supply version 2
Supply version 3

152
Appendix C: Workshop Guidelines
Consumer Workshops
The focus of the people’s workshops are around their expectations of housing in their
retirement and their perceptions of the likely housing needs and conditions of today’s
younger people when they retire in 2050.
There are three sets of workshops that involve ‘peoples’ groups. The questions for each
of these are set out below:
• Older people's (65+) workshop:
 what sort of housing you want to see in future for older people
 what housing you expect to see in future for older people
 what are the things that are likely to generate or inhibit housing for older people
in future
 what are the impacts of future housing issues for our social, economic and
environmental well-being.
• Maori Workshop:
 what sort of housing you want to see in future for older Maori
 what housing you expect to see in future for older Maori
 what are the things that are likely to generate or inhibit excellent housing for
today’s young Maori, who will be the older Maori of the future
 what are the impacts of future housing issues for our social, economic and
environmental well-being.
• New settler Workshops – Indian, Filipino, Chinese:
 what is the housing you want to see in future for older _ people
 what are the things that are likely to help or hinder getting the best housing for
older _ people
 what sort of housing for older people is needed to ensure our future social,
economic and environmental well-being?
• Younger people's (25 yrs) workshop:
 what sort of housing you want to see for older people when you are in retirement
 what housing you expect to see in future for older people when you are in
retirement
 what are the things that are likely to generate or inhibit positive housing for older
people in future
 what needs to happen now so when you are in retirement you are living in the
housing that will meet your needs.

153
Sector Workshops
The focus of the sector workshops was on policy, provider and industry groups’
expectations of housing for people in retirement, what the housing needs and issues are
for older people now, and their perceptions of the likely housing needs and conditions of
today’s younger people when they retire around 2050.
There are four sets of workshops that involve sector groups – policy, providers, older
peoples services and industry. The key questions for the sector groups are:
What are the critical issues for older people’s housing provision:
• Associated with the current cohort of older people and people who will retire in the
next few years? and,
• Associated with the ageing of our population and the likely housing needs of today’s
younger people when they are in retirement?
What are the impacts of certain trends on housing for:
• Dwellings of different sizes, configurations and design.
• Different housing tenures.
• In-house services and supported housing.
How can sectors work together more effectively, best use our existing expertise and what
do we need to learn from overseas?

154
Appendix D: Consumer Workshops Inputs

155
The Dynamics of Housing Demand of Over 65 year
Olds (2010-2050)
A SUMMARY OF TRENDS AFFECTING OLDER PEOPLE AND OLDER
PEOPLE’S HOUSING FUTURES
PEOPLE’S WORKSHOPS
March 2009

156
CHRANZ
Centre for Housing Research Aotearoa New
Zealand
CHRANZ was established by HNZC in 2003
to invest in housing research. It receives funding
not only from HNZC but also other government
agencies, and has its own board. CHRANZ
independently commissions research and works
to ensure that it is fed into policy and planning. Its
research is used by a wide range of government
agencies, councils, housing providers and
community organisations.
CHRANZ's priorities for research include: access
to housing, housing demand and need
experienced by vulnerable populations, changing
attitudes to tenure, housing investment,
alternative providers, and the performance of
housing in urban and rural environments.
www.chranz.co.nz
1. Housing Futures for Older People: What’s it about and
what are we going to do?
We are asking you to help us to better understand what housing conditions and needs
that older people will have between 2010 and 2050. To do that we are going to give
you some information, and we are going to ask about your expectations of housing for
your retirement, what the housing needs and issues are for older people now, and your
perceptions of the likely housing needs and conditions of today’s younger people
when they retire around 2050. There are no right or wrong answers. Your experiences
and your knowledge about the aspirations, expectations and real lives or your
families, yourselves and the older and younger people you have contact with are
important if New Zealand is to plan for and respond to the changing needs and
demands of older people over the next forty years.
What we will do today is set out some information for you about:
 how our population is likely to look in the future
 the aspects of housing that
population ageing might affect, and
 factors and trends that might impact
on housing for older people.
Then we will ask you some pretty
broad questions just to help you talk
about older people’s housing and the
future. These questions are to help.
They are not a test and we want you to
just talk and have a conversation with
us and each other about the issues.
We will take notes as you go along.
These will help us write our report to
CHRANZ, the main funder of this
research. In our report we will not
name people in the workshop or name
any individual’s comments in the
workshop.
2. Our Ageing Population
The population in New Zealand is
getting older.
This is not unusual in many western countries throughout the world and some Asian
countries as well. Japan’s population, for instance, has a large proportion of older
people now and that proportion will get larger in the future. The graph below shows
that over a quarter of New Zealand’s population in 2061 is likely to be over 65 years
old.

157
Under 65 yrs
65 yrs +
Under 65 yrs
65 yrs +
Under 65 yrs
65 yrs +
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Fi gure 1: Proportion of New Zealand 's Pop ulation 65 Years or Older
65 y rs + 13.1 22 .6 27
Under 65 yrs 86 .9 77.4 73
2006 2 031 2 061
By 2031, we can expect that the following places will have half of their population 50
years or older:
 Waitaki District
 Thames-Coromandel District
 South Wairarapa District
 Hauraki District
 Buller District
 Horowhenua District
 Marlborough District
 Kaipara District
 Westland District
 Kapiti Coast District
 Kaikoura District
 Timaru District.
But some places will still have young population profiles. Manukau city, for instance,
can be expected to have the youngest median age. Half their population can be
expected to be older than 35 years in 2031 and the rest of the Manukau City
population will be younger than 35 years old. The twelve districts with the lowest
median ages by 2031 are:
 Manukau City
 Papakura District
 Hamilton City
 Palmerston North City
 Waitakere City
 Wellington City
 Porirua City
 Dunedin City

158
 Auckland City
 Otorohanga District
 Rotorua District
 Waitomo District.
What will these older people be like?
Over the next twenty years, most older people will be 65 years to 74 years. But by
2061 we can expect that a quarter of all older people will be aged 85 years or more.
So the whole population is ageing, but the older population is also ageing.
Not surprisingly, New Zealand Pakeha and Europeans will make up the biggest
population of over 65 year olds. In about twenty years in 2026, we can expect:
 784,400 older New Zealand Pakeha , Europeans and a smattering of other groups
such as Canadians and Americans.
 90,900 older people in the Asian ethnic groups – Chinese, Indian, Filipino and so
on.
 70,900 older Maori.
 32,700 older people with Pacific ethnicities – Samoan, Cook Island, Tongan,
Niuean and so forth.
There will be more women in the older population than men. But the gap between
women and men’s mortality is closing. More men are living longer, so older
populations are going to have more men in them.
Households and Older People
Just as more people in the population will be older, more households will have older
people in them. In 2006, 288,900 households had their census form filled in by an
older person. That person is called the reference person. By 2051, we can expect that
820,000 households will have a reference person in them aged 65 years or more. That
means that there will be at least 820,000 houses, flats, or apartments with at least one
older person in them. Increasingly our dwellings will need to meet the needs of older
people.
By 2051, we can expect 2.8 times the number of dwellings currently headed up by an
older person.
This reflects a long process of household change. Statistics New Zealand has done
some forecasts on households in around twenty years time. They suggest:
• The total number of households will grow from around 1.55 million in 2006 to
2.09 million.
• Households will get smaller. In 2006, household occupancy was 2.6 people. By
2031 it is expected to fall to about 2.4 people in each household.
• Between 2006 and 2031 they expect one-person households to increase by 71
percent. A lot of those will be people aged 65 years and older.
The graph below shows you the difference between the households of today and the
households that Statistics New Zealand expects to see in 2031. Because the ageing
process drives these changes, we might see those trends continuing to 2051.

159
3. Aspects of Housing Affected by Ageing Populations
There are six aspects of housing demand that could be affected by the ageing
population. They are the:
• Number of dwellings – This might be different from the forecasts if older people
decide to live with their children or living together even when they are not
partners or family.
• Location of dwellings – This may be affected by older people choosing to live in
certain places. Tauranga, the Kapiti Coast and Nelson currently attract older
people and retirees. Some people move to urban areas to access services.
• Size of dwellings – This may be affected by older people’s choices to buy bigger
houses or smaller houses.
• Dwelling design, performance and comfort – This may be affected by older
people having different expectations of their homes including their ability to get
around them, their safety in their home, the energy efficiency of their home, and
expectations around the affordability, durability, and comfort that people feel in
their homes.
• Support for older people in private homes – This may be affected by older
people’s desire to stay in their homes, or their communities, and the availability of
services.
• Number of dwellings rented or owner occupied – This may be affected by the
ability of people enter home ownership.
4. Ageing Populations and Housing Dynamics
People concerned with policy and planning for services and for housing have
identified four dynamics which affect older people’s housing. They are:
• Older people’s health and mobility.

160
• The way people and the Government respond to the likelihood of people living
longer and the costs of health and long retirements.
• Whether and when young people get into home ownership or stay in the rental
market.
• The services and policy on supporting and caring for older people.
Older People’s Health and Mobility
Older people are more likely to have health problems or disability problems than
young people. Around 45 percent of older people have a disability. These are most
usually a physical disability or a sensory disability such as problems with their sight
or their hearing. Most people with a disability, whether they are young or old, live in
houses, flats or apartments. They do not live in residential care.
Older people with disabilities come from all ethic groups. This is shown in the graph
below. Maori, however, have a higher disability rate for both older people and
younger age groups as well.
The Ethnic Profile of Older People With Disabilities 2006
Europea n
67%
Maori
15%
Other
11%
Asian
3%
Paci fic peo ple s
4%
Research by CRESA and the Disability Resources Centre funded by CHRANZ in
2007 suggests that:
• By 2050 7.5 percent of the population as a whole may have a severe disability.
Among older people the proportion of people with a severe disability can be
expected to be higher.
• The majority of older people will be disabled in some way.
• The proportion of the population with some impairment to mobility is likely to
increase with the ageing population, combined with higher survival rates for those
with congenital impairment or impairment acquired through injury or illness.

161
Older people and disabled people are both vulnerable to their homes not working
well.
• Hazards in the home are major cause of older people’s injuries, particularly falls.
For older people falls account for 75 percent of injury related hospital admissions.
• Older people require warmer homes than younger adults of an average of at least
21° C.
• Our houses are cold:
 Average winter evening temperatures in living rooms are 17.8° C
 Bedroom overnight averages are 13.2° C in pre-1978 houses and 14.5° C in
post 1978 houses.
• Around a fifth of older people’s dwellings are not adequately insulated in the
ceiling.
• Cold houses are bad for health:
 Temperatures lower than 16° C damage respiratory function
 Temperatures lower than 12° C are associated with cardiovascular strain.
• Damp, excessive condensation and mould are associated with:
 toxic reactions
 allergies
 inflammatory diseases
 gastroenteritis
 infections.
The Costs of Living Longer
Longer lives means that more people will be living for longer after they retire. To
meet the costs of living after retirement, people and Governments may respond in
different ways.
People might:
• Save more when they are earning.
• Spend less when they are earning and save more.
• Spend less on housing when they are earning.
• Leave bigger houses and go to smaller houses when they are no longer earning.
• Pay more tax which the Government spends on more healthcare for older people
and more on pensions for longer.
Some have suggested that the costs of longer life will have a major impact on housing
demand, especially on the desire to move from a costly big house to a less costly
small house.
This research has used a complicated model to test that view.
That model suggests that:
• Increasing numbers of older people living longer and needing more health care
and benefit support will affect younger people with:
 1-1.5% increase in demand for smaller houses
 5-10% increase in the number of younger people staying in rental housing.
• If people simply save to fund a longer retirement:
 people will still want to enter home ownership

162
 bigger houses will be in demand if the cost difference between a small house
and a big house is modest
 smaller houses and downsizing will be in demand if the cost difference
between a small house and a big house is a lot.
• If people pay higher taxes the effects are mixed:
 where building costs are low, younger people may attempt to buy bigger
houses and expect to downsize when they retire
 where building costs are high, accessing houses will be more expensive and
there will be more demand for smaller houses.
Changing Housing Consumption
What people do before they are 65 years old is likely to impact on their housing
situations when they retire.
Home Ownership and Rental Housing
One of the most obvious trends in New Zealand’s housing is the growing rate of
rental housing. Most people in New Zealand live in dwellings that are owned by
people in the household or by a family trust. Rates of owner occupation are falling in
New Zealand and now about 67 percent of households live in rented dwellings. In
2006, the highest rates of owner occupation was among people aged between 55 years
and 79 years. Most of these people first bought homes when they started a family.
Because rates of home ownership are falling among people 50 years and older, it is
expected that the number of older people in rented dwellings will increase. The
number of households in rented housing headed by an older person will also increase.
In 2006, there were around 54,100 households headed by an older person in rental
accommodation. Some have suggested that there may be three times that number by
2051. That is, around 160,000 households.
Wanting Bigger Houses or Smaller Houses
People who move into a new house are likely to move into a bigger house than their
existing house. But people in New Zealand show mixed views about whether they
want bigger or smaller houses. However, older people seem to want to down size. In a
2008 national survey of older people, 285 wanted to move from their house. As the
graph shows, the biggest single group wanted to get a smaller house.
The same survey shows that the condition of older people’s houses matter to them. As
the second graph shows, as an older person’s view of their house’s condition gets
worse, the more likely they are to want to move.

163
0
5
10
15
20
25
30
35
40
45
50
Poor C ondi tion Ho use Av era ge Condi tion House Good Condition H ouse Excelle nt Conditi on Hous e
House Condition
% of Older People Planni ng to Move House - 200 8 Natio nal Older Peop le's Repairs and
Maintenance Survey
0 2 0 40 60 80 100 120
Wan t a smaller pr operty
Ill h ealth/ old age (po or health)
W ant to be clo ser to fa mil y
Wa nt a differen t area
W ant to go to a retiremen t village
Wa nt a better ho use
To be neare r friends
Can't a fford to stay
Wa nt to go to a rest home
Reason s for Mo ving Among Olde r People - 2008 National Old er Peopl e's Repairs a nd
Maintenance Survey
Industry and the Housing Stock
The building industry has recently has a big fall in dwellings built. Until recently, the
number of dwellings being built was bigger than the increase in the number of
households in New Zealand. New Zealand has more dwellings than households. The
building boom has seen the building industry building bigger houses.

164
1976 198 0 1 985 1990 19 95 2000 20 05 200 8
Flats (m2)
Houses (m2)
0
50
100
150
200
250
Yea rs
Avera ge
Sq
Metres
Size of House and Fla ts 1973- 2008
Ageing Policy, Services and Housing
Policy in New Zealand and in many western countries is dominated by the idea of
Ageing in Place.
Ageing in place can mean ageing in the same house. Or, it may mean ageing in the
community where an older person has lived and they have their friends. Ageing in
place policies reflect:
• research showing that older people:
 like to stay in the communities they know
 often like to stay in the homes they know
 do not always thrive in residential or institutional places.
• concerns about the costs of residential care.
Ageing in place policies and population ageing have seen services to older people
develop in new ways. The challenge is to find the right mix of services that meet older
people’s housing needs now and into the future. Some countries have found that they
have too many services of some types and not enough services of other types.
Housing-related services for older people can be divided into five bundles. They are:
1. In-house support to assist people with daily living in their homes.
2. Repair, maintenance and retrofit programmes to make dwellings healthier,
more comfortable and more durable for older people.
3. Housing transition services and programmes which help people make decisions
about moving from one sort of housing to another and help older people to make
those transitions well. This includes making different sorts of housing available to
older people such as retirement villages, shared housing, supported living units.
4. Programmes to keep housing affordable which include subsidies and relief
from costs like rates.

165
5. Programmes that improve the functionality of dwellings. In some countries
this largely involves modifications to existing dwellings. In many other countries,
there has been a move to promote better design of ordinary dwellings to ensure
that people can live in them throughout their lives. The new Lifemark in New
Zealand is an example of that sort of programme.
The trend overseas is to recognise that in-house support can be made more useful if
dwellings are built to work well. Many countries are increasingly adopting
programmes to ensure older people live in well-maintained homes that allow them to
be mobile, safe and as independent as possible.
5. So What Do You Think? What Are Your Experiences?
There are six sets of workshops that involve ‘peoples’ groups. Asking:
• Older people's (65+) workshop:
 what sort of housing you want to see in future for older people
 what housing you expect to see in future for older people
 what are the things that are likely to generate or inhibit housing for older
people in future
 what are the impacts of future housing issues for our social, economic and
environmental well-being.
• Maori Workshop:
 what sort of housing you want to see in future for older Maori
 what housing you expect to see in future for older Maori
 what are the things that are likely to generate or inhibit good housing
provision for today’s young Maori to ensure they will be well housed as older
people
 what are the impacts of future housing issues for our social, economic and
environmental well-being.
• Pacific Workshop:
 what sort of housing you want to see in future for older Pacific people
 what housing you expect to see in future for older Pacific people
 what are the things that are likely to generate or inhibit good housing for
today’s young Pacific people to ensure they will be well housed as older
people
 what are the impacts of future housing issues for our social, economic and
environmental well-being.
• New settler Workshops – Indian, Filipino, Chinese:
 what is the housing you want to see in future for older _ people
 what are the things that are likely to help or hinder getting the good housing
for older _ people
 what sort of housing for older people is needed to ensure our future social,
economic and environmental well-being?
• Middle-aged people workshop:
 what sort of housing you want to see for older people when you are in
retirement
 what housing you expect to see in future for older people when you are in
retirement
 what are the things that are likely to generate or inhibit positive housing for
older people in future

166
 what needs to happen now so when you are in retirement you are living in the
housing that will meet your needs.
• Younger people's (25 yrs) workshop:
 what sort of housing you want to see for older people when you are in
retirement
 what housing you expect to see in future for older people when you are in
retirement
 what are the things that are likely to generate or inhibit positive housing for
older people in future
 what needs to happen now so when you are in retirement you are living in the
housing that will meet your needs.

167
Slide 1
Centre for Research, Evaluation and Social Assessment
The Dynamics of Housing
Demand of Over 65 year Olds
(2010-2050)
TRENDS AFFECTING OLDER
PEOPLE AND OLDER PEOPLE’S
HOUSING
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 2
Centre for Research, Evaluation and Social Assessment
What we are going to do today
Give you some information about:
What our population is likely to look like in the
future
Housing trends
Talk about:
what you think the housing needs and issues are
for older people now
your expectations for your own housing, and for
old and young people you know
your views on likely housing needs and conditions
in the future
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 3
Centre for Research, Evaluation and Social Assessment
Where will this information go?
•Our report is to CHRANZ, the funder of
this research
•CHRANZ independently commissions
research and feeds it into policy and
planning
•In our report we will not name people in
the workshop or name any individual’s
comments in the workshop
•The report will be freely available
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________

168
Slide 4
Centre for Research, Evaluation and Social Assessment
In future there will be more of us
•The NZ population is expected to rise:
4.18m in 2006
5.09m in 2031
5.57m in 2061
•People will live longer - life expectancy at
birth will increase by about 6 years between
2006-2061
•There will be a net migration gain of 10,000
people yearly from 2010 onwards
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 5
Centre for Research, Evaluation and Social Assessment
Our population is getting
older
•The 65+ age group is growing:
13.1% in 2006
22.6% in 2031
27% in 2061
•The 65-74 group will be the biggest older
group for the next 20 years
•Those aged 85+ increase to 25% of the older
group by 2061
•There will continue to be more women than
men in the older population
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 6
Centre for Research, Evaluation and Social Assessment
We are ageing at different
rates
•The proportion aged 65+ differs around the
country e.g.
12 territorial authorities will have a median age of
50 in 2031
Manukau is expected to have the youngest
median age in 2031 (35yrs)
•By 2026, the numbers in the 65+ age group:
Pacific: 32,700
Maori: 70,900
Asian: 90,900
European + Other: 784,400
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________

169
Slide 7
Centre for Research, Evaluation and Social Assessment
There will be more older
households
•By 2051, we can expect that 820,000
households will be headed by a person
aged 65 years or more
•A lot of older people live alone now,
and this is likely to continue in future
•Most older people live in private
houses, they do not live in residential
care – this is likely to continue
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 8
Centre for Research, Evaluation and Social Assessment
Older people and disability
•Disability increases with age
54% of NZ’s population aged 65 and over report a
disability
61% of Maori aged 65 and over report a disability
53% of Pacific people aged 65 and over report a
disability
•It is estimated that between 45-50% of
disabled adults live in homes that are not
modified to their needs
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 9
Centre for Research, Evaluation and Social Assessment
Disability trends
•It is hard to estimate the prevalence of
disability in the future, however:
There is likely to more disabled, due to
the ageing population
By 2050 7.5% of the population may
have a severe disability. Among older
people the proportion of people with a
severe disability can be expected to be
higher
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
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___________________________________

170
Slide 10
Centre for Research, Evaluation and Social Assessment
Housing trends
•Home ownership is falling, including among
those aged 50 and older – those who can’t
enter home ownership now will be excluded
in future
•Our housing stock is ageing – fewer houses
are being built
•Housing demand is rising – 20,000 houses
per year up to 2016
•House size has increased, affecting
affordability, but big houses don’t suit all
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 11
Centre for Research, Evaluation and Social Assessment
Housing trends of different
groups
•Home ownership is lowest for Maori
and Pacific, and also low for Asian
•Maori and Pacific households are more
likely to be paying more than 30% of
household income on housing
•HNZC estimate one third of Maori aged
65+ will need rental housing in 2021
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 12
Centre for Research, Evaluation and Social Assessment
The costs of living longer
•More money will be needed to keep us
in retirement:
Money will need to come from pensions or
private savings, or a combination
•More health care will be needed by the
growing older population
•We might want to move to a smaller
house
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________

171
Slide 13
Centre for Research, Evaluation and Social Assessment
We developed a model to test
future demand for housing
•1-1.5% increase in demand for smaller
houses
•5-10% increase in the number of younger
people staying in rental housing
•Bigger houses will be in demand if the cost
difference between a small house and a big
house is modest
•Smaller houses will be in demand if the cost
difference between a small house and a big
house is a lot
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 14
Centre for Research, Evaluation and Social Assessment
Ageing in place services
overseas
•In-house support e.g. help with housework
•Repair, maintenance and retrofit
programmes e.g. subsidised insulation
•Housing transition services e.g. supported
living units
•Programmes to keep housing affordable e.g.
rates rebates
•Programmes that improve the functionality of
dwellings e.g. modifications
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 15
Centre for Research, Evaluation and Social Assessment
Four things that affect older
people’s housing
•Older people’s health and mobility
•How our society responds to people
living longer and the costs of health
care and long retirements
•Whether and when young people get
into home ownership or stay in the
rental market
•The services and policy on supporting
and caring for older people in their
homes
___________________________________
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172
Slide 16
Centre for Research, Evaluation and Social Assessment
Some questions
•What sort of housing do you want to
see in future for older people?
•What sort housing do you expect to
see in future for older people?
•What needs to happen to ensure
today’s young people will be well
housed as older people?
___________________________________
___________________________________
___________________________________
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173
Appendix E: Sector Workshop Inputs

174

175
The Dynamics of Housing Demand of Over 65 year
Olds (2010-2050)
A SUMMARY OF TRENDS AFFECTING OLDER PEOPLE AND OLDER
PEOPLE’S HOUSING FUTURES
POLICY, PROVIDER AND INDUSTRY WORKSHOPS
March 2009
1. Housing Futures for Older People: What’s it about and
what are we going to do?
We are asking you to help us to better understand what housing conditions and needs
that older people will have between 2010 and 2050. To do that we are going to give

176
CHRANZ
Centre for Housing Research Aotearoa New
Zealand
CHRANZ was established by HNZC in 2003
to invest in housing research. It receives funding
not only from HNZC but also other government
agencies, and has its own board. CHRANZ
independently commissions research and works
to ensure that it is fed into policy and planning. Its
research is used by a wide range of government
agencies, councils, housing providers and
community organisations.
CHRANZ's priorities for research include: access
to housing, housing demand and need
experienced by vulnerable populations, changing
attitudes to tenure, housing investment,
alternative providers, and the performance of
housing in urban and rural environments.
www.chranz.co.nz
you some information, and we are going to ask about your expectations of housing for
people in retirement, what the housing needs and issues are for older people now, and
your perceptions of the likely housing needs and conditions of today’s younger people
when they retire around 2050. There are no right or wrong answers. Your knowledge
from your experiences dealing with housing, the building industry, providing service
to older people or participating in policy development is important if New Zealand is
to plan for and respond to the changing needs and demands of older people over the
next forty years.
What we will do today is set out some information for you about:
 how our population is likely to look in the future
 the aspects of housing that population ageing might affect, and
 factors and trends that might impact on housing for older people.
Then we will ask you some pretty
broad questions just to help you talk
about older people’s housing and the
future. These questions are to help.
They are not a test and we want you to
just talk and have a conversation with
us and each other about the issues.
We will take notes as you go along.
These will help us write our report to
CHRANZ, the main funder of this
research. In our report we will not
name people in the workshop or name
any individual’s comments in the
workshop.
2. Our Ageing Population
The population in New Zealand is
getting older.
This is not unusual in many western
countries throughout the world and
some Asian countries as well. Japan’s
population, for instance, has a large proportion of older people now and that
proportion will get larger in the future. The graph below shows that over a quarter of
New Zealand’s population in 2061 is likely to be over 65 years old.

177
Under 65 yrs
65 yrs +
Under 65 yrs
65 yrs +
Under 65 yrs
65 yrs +
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Figure 1: Proportion of New Zealand's Population 65 Years or Older
65 yrs + 13.1 22.6 27
Under 65 yrs 86.9 77.4 73
2006 2031 2061
By 2031, we can expect that the following places will have half of their population 50
years or older:
 Waitaki District
 Thames-Coromandel District
 South Wairarapa District
 Hauraki District
 Buller District
 Horowhenua District
 Marlborough District
 Kaipara District
 Westland District
 Kapiti Coast District
 Kaikoura District
 Timaru District.
But some places will still have young population profiles. Manukau city, for instance,
can be expected to have the youngest median age. Half their population can be
expected to be older than 35 years in 2031 and the rest of the Manukau City
population will be younger than 35 years old. The twelve districts with the lowest
median ages by 2031 are:
 Manukau City
 Papakura District
 Hamilton City
 Palmerston North City
 Waitakere City
 Wellington City
 Porirua City
 Dunedin City

178
 Auckland City
 Otorohanga District
 Rotorua District
 Waitomo District.
What will these older people be like?
Over the next twenty years, most older people will be 65 years to 74 years. But by
2061 we can expect that a quarter of all older people will be aged 85 years or more.
So the whole population is ageing, but the older population is also ageing.
Not surprisingly, New Zealand Pakeha and Europeans will make up the biggest
population of over 65 year olds. In about twenty years in 2026, we can expect:
 784,400 older New Zealand Pakeha, Europeans and a smattering of other groups
such as Canadians and Americans.
 90,900 older people in the Asian ethnic groups – Chinese, Indian, Filipino and so
on.
 70,900 older Maori.
 32,700 older people with Pacific ethnicities – Samoan, Cook Island, Tongan,
Niuean and so forth.
There will be more women in the older population than men. But the gap between
women and men’s mortality is closing. More men are living longer, so older
populations are going to have more men in them.
Households and Older People
Just as more people in the population will be older, more households will have older
people in them. In 2006, 288,900 households had their census form filled in by an
older person. That person is called the reference person. By 2051, we can expect that
820,000 households will have a reference person in them aged 65 years or more. That
means that there will be at least 820,000 houses, flats, or apartments with at least one
older person in them. Increasingly our dwellings will need to meet the needs of older
people.
By 2051, we can expect 2.8 times the number of dwellings currently headed up by an
older person.
This reflects a long process of household change. Statistics New Zealand has done
some forecasts on households in around twenty years time. They suggest:
• The total number of households will grow from around 1.55 million in 2006 to
2.09 million.
• Households will get smaller. In 2006, household occupancy was 2.6 people. By
2031 it is expected to fall to about 2.4 people in each household.
• Between 2006 and 2031 they expect one-person households to increase by 71
percent. A lot of those will be people aged 65 years and older.
The graph below shows you the difference between the households of today and the
households that Statistics New Zealand expects to see in 2031. Because the ageing
process drives these changes, we might see those trends continuing to 2051.

179
3. Aspects of Housing Affected by Ageing Populations
There are six aspects of housing demand that could be affected by the ageing
population. They are the:
• Number of dwellings – This might be different from the forecasts if older people
decide to live with their children or living together even when they are not
partners or family.
• Location of dwellings – This may be affected by older people choosing to live in
certain places. Tauranga, the Kapiti Coast and Nelson currently attract older
people and retirees. Some people move to urban areas to access services.
• Size of dwellings – This may be affected by older people’s choices to buy bigger
houses or smaller houses.
• Dwelling design, performance and comfort – This may be affected by older
people having different expectations of their homes including their ability to get
around them, their safety in their home, the energy efficiency of their home, and
expectations around the affordability, durability, and comfort that people feel in
their homes.
• Support for older people in private homes – This may be affected by older
people’s desire to stay in their homes, or their communities, and the availability of
services.
• Number of dwellings rented or owner occupied – This may be affected by the
ability of people enter home ownership.
4. Ageing Populations and Housing Dynamics
People concerned with policy and planning for services and for housing have
identified four dynamics which affect older people’s housing. They are:

180
• Older people’s health and mobility.
• The way people and the Government respond to the likelihood of people living
longer and the costs of health and long retirements.
• Whether and when young people get into home ownership or stay in the rental
market.
• The services and policy on supporting and caring for older people.
Older People’s Health and Mobility
Older people are more likely to have health problems or disability problems than
young people. Around 45 percent of older people have a disability. These are most
usually a physical disability or a sensory disability such as problems with their sight
or their hearing. Most people with a disability, whether they are young or old, live in
houses, flats or apartments. They do not live in residential care.
Older people with disabilities come from all ethic groups. This is shown in the graph
below. Maori, however, have a higher disability rate for both older people and
younger age groups as well.
The Ethnic Profile of Older People With Disabilities 2006
European
67%
Maori
15%
Other
11%
Asian
3%
Pacific peoples
4%
Research by CRESA and the Disability Resources Centre funded by CHRANZ in
2007 suggests that:
• By 2050 7.5 percent of the population as a whole may have a severe disability.
Among older people the proportion of people with a severe disability can be
expected to be higher.
• The majority of older people will be disabled in some way.

181
• The proportion of the population with some impairment to mobility is likely to
increase with the ageing population, combined with higher survival rates for those
with congenital impairment or impairment acquired through injury or illness.
Older people and disabled people are both vulnerable to their homes not working
well.
• Hazards in the home are major cause of older people’s injuries, particularly falls.
For older people falls account for 75 percent of injury related hospital admissions.
• Older people require warmer homes than younger adults of an average of at least
21° C.
• Our houses are cold:
 Average winter evening temperatures in living rooms are 17.8° C
 Bedroom overnight averages are 13.2° C in pre-1978 houses and 14.5° C in
post 1978 houses.
• Around a fifth of older people’s dwellings are not adequately insulated in the
ceiling.
• Cold houses are bad for health:
 Temperatures lower than 16° C damage respiratory function
 Temperatures lower than 12° C are associated with cardiovascular strain.
• Damp, excessive condensation and mould are associated with:
 toxic reactions
 allergies
 inflammatory diseases
 gastroenteritis
 infections.
The Costs of Living Longer
Longer lives mean that more people will be living for longer after they retire. To meet
the costs of living after retirement, people and Governments may respond in different
ways.
People might:
• Save more when they are earning.
• Spend less when they are earning and save more.
• Spend less on housing when they are earning.
• Leave bigger houses and go to smaller houses when they are no longer earning.
• Pay more tax which the Government spends on more healthcare for older people
and more on pensions for longer.
Some have suggested that the costs of longer life will have a major impact on housing
demand, especially on the desire to move from a costly big house to a less costly
small house. This research has used a complicated model to test that view.

182
Using a Model to explore ageing and housing demand
To explore the different housing market, mortgage market and tax conditions and how
people of different ages and with different incomes respond to those conditions, a
computer model has been developed. The model is elaborate. It is set up like a ‘mini
economy’ that simulates interactions and long run feedback effects.
The ‘players’ in the model are:
 1,600 people divided into four cohorts of 400 members each
 4 age groups: young adults, middle age, ‘prime’ age and retirement
 Different income and wealth levels. In the youngest cohort income ranges from
$20,000 - $80,000. In the middle cohorts income ranges from $30,000 - $120,000.
In retirement there is a $20,000 pension + 25 percent of young age income +
interest income.
The activities the model simulates are:
 Households borrow and save
 Households rent or buy houses.
 Households pay tax and get pensions, and medical care
The housing components of the model are:
 There are two types of housing, big and small
 Each person chooses a housing pattern that gives them greatest ‘pleasure’ in terms
of housing type and other consumption. These patterns depend on house prices
and the person’s income. It may mean living with parents when young, then
renting and eventually buying. Or for a high income person, it may mean buying a
big house right away and then trading down in retirement.
 Housing is tax advantaged and the preferred saving option.
 House prices adjust to reflect after tax income, demand from home owners and
landlords and the supply of two different types of houses (big and small).
 Households face binding borrowing constraints that means many save little other
than paying the mortgage when young.
The model looks at how prices, rents and house price appreciation affect demand
among the different age groups and income levels. The model can ‘fix’ house supply
to test what happens when there are changes in demand. The model also explores how
construction costs affect the housing market.
The New Zealand tax system is carefully modelled. The model includes high and low
marginal tax rates. Interest income and rent are taxed. Capital gains are not taxed, and
nor is imputed rent. Landlords can deduct interest payments. There is GST. The
model gives individuals a tax advantage if they own their own home, therefore if the
individual needs to save, it makes sense to own a house.
The New Zealand mortgage market is also carefully modelled. Banks require
deposits, impose mortgage repayment/income ratios, and require regular repayment of
principal.

183
What the model shows
That model suggests that:
• Increasing numbers of older people living longer and needing more health care
and benefit support will affect younger people with:
 1-1.5% increase in demand for smaller houses
 5-10% increase in the number of younger people staying in rental housing.
• If people simply save to fund a longer retirement:
 people will still want to enter home ownership
 bigger houses will be in demand if the cost difference between a small house
and a big house is modest
 smaller houses and downsizing will be in demand if the cost difference
between a small house and a big house is a lot.
• If people pay higher taxes the effects are mixed:
 where building costs are low, younger people may attempt to buy bigger
houses and expect to downsize when they retire
 where building costs are high, accessing houses will be more expensive and
there will be more demand for smaller houses.
Changing Housing Consumption
What people do before they are 65 years old is likely to impact on their housing
situations when they retire.
Home Ownership and Rental Housing
One of the most obvious trends in New Zealand’s housing is the growing rate of
rental housing.
Most people in New Zealand live in dwellings that are owned by people in the
household or by a family trust. Rates of owner occupation are falling in New Zealand
and now about 67 percent of households live in rented dwellings. In 2006, the highest
rates of owner occupation was among people aged between 55 years and 79 years.
Most of these people first bought homes when they started a family.
Because rates of home ownership are falling among people 50 years and older, it is
expected that the number of older people in rented dwellings will increase. The
number of households in rented housing headed by an older person will also increase.
In 2006, there were around 54,100 households headed by an older person in rental
accommodation. Some have suggested that there may be three times that number by
2051. That is, around 160,000 households.
Wanting Bigger Houses or Smaller Houses
People who move into a new house are likely to move into a bigger house than their
existing house. But people in New Zealand show mixed views about whether they
want bigger or smaller houses. However, older people seem to want to down size. In a
2008 national survey of older people, 285 wanted to move from their house. As the
graph shows, the biggest single group wanted to get a smaller house.

184
0 20 40 60 80 100 120
Want a smaller property
Ill health/old age (poor health)
Want to be closer to family
Want a different area
Want to go to a retirement village
Want a better house
To be nearer friends
Can't afford to stay
Want to go to a rest home
Reasons for Moving Among Older People - 2008 National Older People's Repairs and
Maintenance Survey
The same survey shows that the condition of older people’s houses matter to them. As
the graph shows, as an older person’s view of their house’s condition gets worse, the
more likely they are to want to move.
0
5
10
15
20
25
30
35
40
45
50
Poor Condition House Average Condition House Good Condition House Excellent Condition House
House Condition
% of Older People Planning to Move House - 2008 National Older People's Repairs and
Maintenance Survey
Industry and the Housing Stock
The building industry has recently has a big fall in dwellings built. Until recently, the
number of dwellings being built was bigger than the increase in the number of

185
households in New Zealand. New Zealand has more dwellings than households. The
building boom has seen the building industry building bigger houses.
1976 1980 1985 1990 1995 2000 2005 2008
Flats (m2)
Houses (m2)
0
50
100
150
200
250
Years
A
verage
Sq
Metres
Size of House and Flats 1973-2008
Ageing Policy, Services and Housing
Policy in New Zealand and in many western countries is dominated by the idea of
Ageing in Place.
Ageing in place can mean ageing in the same house. Or, it may mean ageing in the
community where an older person has lived and they have their friends. Ageing in
place policies reflect:
• research showing that older people:
 like to stay in the communities they know
 often like to stay in the homes they know
 do not always thrive in residential or institutional places.
• concerns about the costs of residential care.
Ageing in place policies and population ageing have seen services to older people
develop in new ways. The challenge is to find the right mix of services that meet older
people’s housing needs now and into the future. Some countries have found that they
have too many services of some types and not enough services of other types.
Housing-related services for older people can be divided into five bundles. They are:
1. In-house support to assist people with daily living in their homes.
2. Repair, maintenance and retrofit programmes to make dwellings healthier,
more comfortable and more durable for older people.
3. Housing transition services and programmes which help people make decisions
about moving from one sort of housing to another and help older people to make

186
those transitions well. This includes making different sorts of housing available to
older people such as retirement villages, shared housing, supported living units.
4. Programmes to keep housing affordable which include subsidies and relief from
costs like rates.
5. Programmes that improve the functionality of dwellings. In some countries this
largely involves modifications to existing dwellings. In many other countries,
there has been a move to promote better design of ordinary dwellings to ensure
that people can live in them throughout their lives. The new Lifemark in New
Zealand is an example of that sort of programme.
The trend overseas is to recognise that in-house support can be made more useful if
dwellings are built to work well. Many countries are increasingly adopting
programmes to ensure older people live in well-maintained homes that allow them to
be mobile, safe and as independent as possible.
5. So What Do You Think?
There are three sets of workshops that involve sector groups – policy, providers and
industry. The key questions for the sector groups are:
What are the critical issues for older people’s housing provision:
• Associated with the current cohort of older people and people who will retire in
the next few years? and,
• Associated with the ageing of our population and the likely housing needs of
today’s younger people when they are in retirement?
What are the impacts of certain trends on housing for:
• Dwellings of different sizes, configurations and design.
• Different housing tenures.
• In-house services and supported housing.
How can sectors work together more effectively, best use our existing expertise and
what do we need to learn from overseas?

187
Slide 1
Centre for Research, Evaluation and Social Ass essment
The Dynamics of Housing
Demand of Over 65 year Olds
(2010-2050)
TRENDS AFFECTING OLDER
PEOPLE AND OLDER PEOPLE’S
HOUSING
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 2
Centre for Research, Evaluation and Social Ass essment
What we are going to do today
¾Give you some information about:
¾What our population is likely to look like in
the future
¾Housing trends
¾Modelling ageing and housing demand
¾Changing housing consumption
¾Industry and housing stock
¾Ageing policy, services and housing
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 3
Centre for Research, Evaluation and Social Ass essment
What we are going to do today….
¾Talk about:
¾critical issues for older people’s housing
provision
¾impacts of certain trends on housing
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________

188
Slide 4
Centre for Research, Evaluation and Social Ass essment
Where will this information go?
•Our report is to CHRANZ, the funder of
this research
•CHRANZ independently commissions
research and feeds it into policy and
planning
•In our report we will not name people in
the workshop or name any individual’s
comments in the workshop
•The report will be freely available
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 5
Centre for Research, Evaluation and Social Ass essment
In future there will be more of us
•The NZ population is expected to rise:
¾4.18m in 2006
¾5.09m in 2031
¾5.57m in 2061
•People will live longer - life expectancy at
birth will increase by about 6 years between
2006-2061
•There will be a net migration gain of 10,000
people yearly from 2010 onwards
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 6
Centre for Research, Evaluation and Social Ass essment
Our population is getting
older
•The 65+ age group is growing:
¾13.1% in 2006
¾22.6% in 2031
¾27% in 2061
•The 65-74 group will be the biggest older
group for the next 20 years
•Those aged 85+ increase to 25% of the older
group by 2061
•There will continue to be more women than
men in the older population
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________

189
Slide 7
Centre for Research, Evaluation and Social Ass essment
We are ageing at different
rates
•The proportion aged 65+ differs around the
country e.g.
¾12 territorial authorities will have a median age of
50 in 2031
¾Manukau is expected to have the youngest
median age in 2031 (35yrs)
•By 2026, the numbers in the 65+ age group:
¾Pacific: 32,700
¾Maori: 70,900
¾Asian: 90,900
¾European + Other: 784,400
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 8
Centre for Research, Evaluation and Social Ass essment
There will be more older
households
•By 2051, we can expect that 820,000
households will be headed by a person
aged 65 years or more
•A lot of older people live alone now,
and this is likely to continue in future
•Most older people live in private
houses, they do not live in residential
care – this is likely to continue
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 9
Centre for Research, Evaluation and Social Ass essment
Older people and disability
•Disability increases with age
•54% of NZ’s population aged 65 and over
report a disability
•61% of Maori aged 65 and over report a
disability
•53% of Pacific people aged 65 and over
report a disability
•It is estimated that between 45-50% of
disabled adults live in homes that are not
modified to their needs
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________

190
Slide 10
Centre for Research, Evaluation and Social Ass essment
Disability trends
•It is hard to estimate the prevalence of
disability in the future, however:
¾There is likely to more disabled, due to
the ageing population
¾By 2050 7.5% of the population may
have a severe disability. Among older
people the proportion of people with a
severe disability can be expected to be
higher
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Slide 11
Centre for Research, Evaluation and Social Ass essment
Housing trends
•Home ownership is falling, including among
those aged 50 and older – those who can’t
enter home ownership now will be excluded
in future
•Our housing stock is ageing – fewer houses
are being built
•Housing demand is rising – 20,000 houses
per year up to 2016
•House size has increased, affecting
affordability, but big houses don’t suit all
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Slide 12
Centre for Research, Evaluation and Social Ass essment
Housing trends of different
groups
•Home ownership is lowest for Maori
and Pacific, and also low for Asian
•Maori and Pacific households are more
likely to be paying more than 30% of
household income on housing
•HNZC estimate one third of Maori aged
65+ will need rental housing in 2021
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191
Slide 13
Centre for Research, Evaluation and Social Ass essment
The costs of living longer
•More money will be needed to keep us
in retirement:
¾Money will need to come from pensions or
private savings, or a combination
•More health care will be needed by the
growing older population
•We might want to move to a smaller
house
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Slide 14
Centre for Research, Evaluation and Social Ass essment
We developed a model to test
future demand for housing
•1,600 ‘players’ are differentiated by age,
income and wealth; borrow and save, rent or
buy; pay taxes, get pensions and medical
care; have different housing patterns; and
face various constraints and advantages
•Houses are big and small, with prices
reflecting different influences
•Prices, rents and price appreciation affect
demand
•The tax system and mortgage market are
modelled
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Slide 15
Centre for Research, Evaluation and Social Ass essment
What does the model show?
•1-1.5% increase in demand for smaller
houses
•5-10% increase in the number of younger
people staying in rental housing
•Bigger houses will be in demand if the cost
difference between small and big is modest
•Smaller houses will be in demand if the cost
difference between small and big is a lot
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192
Slide 16
Centre for Research, Evaluation and Social Ass essment
Ageing in place services
overseas
•In-house support e.g. help with housework
•Repair, maintenance and retrofit
programmes e.g. subsidised insulation
•Housing transition services e.g. supported
living units
•Programmes to keep housing affordable e.g.
rates rebates
•Programmes that improve the functionality of
dwellings e.g. modifications
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Slide 17
Centre for Research, Evaluation and Social Ass essment
Four things that affect older
people’s housing
•Older people’s health and mobility
•How our society responds to people living
longer and the costs of health care and
long retirements
•Whether and when young people get into
home ownership or stay in the rental
market
•The services and policy on supporting and
caring for older people in their homes
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Slide 18
Centre for Research, Evaluation and Social Ass essment
Some questions
•What are the critical issues for older people’s
housing provision associated with:
¾The current cohort of older people and those
retiring in the next few years?
¾The ageing of our population and the likely
housing needs of today’s younger people when
they reach retirement age?
•What are the impacts of certain trends on
housing for:
¾Dwellings of different sizes, configurations and
design?
¾Different housing tenures?
¾In-house services and supported housing?
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