There’s a housing crisis in Queenstown, yet 27 percent of the stock is sitting empty most of the year
Queenstown airport is bustling. People race off flights to be first to the rental car desk, where the lines for keys and escape are four or five people deep at each counter.
Newsroom’s Uber driver says it’s quieter than it has been as the snow season finishes in three weeks and the bulk of the winter visitors came and went in August.
He moved here from Barcelona more than a decade ago and says he loves the place – the scenery still gets him every single day as he drives around collecting and dropping off visitors.
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On Queenstown’s waterfront are the food stalls and the buskers, making the most of the sunshine that has brought plenty of tourists outside.
Clarisse Muchnik has residency these days after moving to Queenstown seven years ago. At the time it was the dream, she tells Newsroom in between serving customers their hot dogs.
Now though, it’s much harder for people starting out in the tourist town.
“I just want them to have the job, the house, and the beautiful experience, but it’s not that easy any more.”
Muchnik got notice she had to move out of her flat last year but wasn’t too concerned as she’d already booked to go overseas travelling for six months.
What she didn’t expect was how much harder it would be coming back.
When she returned this year, she said it wasn’t straightforward finding a place to live and a new job, despite being a resident, which she thought would help.
She’s lucky and has found work and has a roof over her head in a shared flat but knows plenty of people who sleep rough because there’s nowhere else to go.
Julie Scott sees these people too when she runs her dogs down by the lake each morning.
The Queenstown Lakes Community Housing Trust chief executive has lived in the area for 21 years and says many in the community are horrified by how bad the housing crisis has got.
Though visitors to the region probably don’t notice the camping ground full of people living permanently, or the cars and vans parked in the same spots by the lake with the “tradie work boots outside the front driver’s seat there every morning”, locals do.
“I think it’s definitely having an impact on our reputation. We’re in one of the most beautiful places in New Zealand and we can’t house our workers adequately, and we have 27 percent of our houses unoccupied – it’s crazy.”
“It makes it seem like we can’t provide for our community and people who work here.”
That’s not the message she and those who call Queenstown home want anyone to see or hear.
“There’s always people who have conflicting views who say, 'if people can’t afford to stay here, they should leave town'.” Scott says.
“But that’s a naive view, because there’s a multitude of reasons why these people are here, and most of these people haven’t just rocked up into town and gone, 'I’ve got nowhere to live and now I’m living in my car'.
“Most of them have been in rental properties, and the landlord has either sold or given notice for some other reason, and now they find themselves homeless.”
And if they all packed up and left, the community would notice it, because they’re the workers ensuring businesses are back open seven days a week after the pandemic shut much of the town down half of the week as staffing shortages hit hard.
Borders reopening both help and hinder
Scott says the flood of migrant workers into Queenstown has been crucial for getting businesses back up and running but there’s been unintended consequences too.
“There’s nowhere for them to live, and they’re putting additional pressure on the housing issue that is already at breaking point.”
It wasn’t Covid that triggered the housing headache first. The problems were present from about 2019 as rentals sky-rocketed and supply dwindled.
During the pandemic, rental prices dropped by 30 percent and some of the problems lessened but this winter it’s worse than ever.
Advertisements for rentals in local papers show you can’t get into a 3-bedroom house for anything under $700 a week and boarding hostels for seasonal workers are charging $400 a week for a bed in a shared dormitory.
“I don’t even know how they get away with that but there’s no other option for some people living there,” Scott says.
The community trust has operated since 2007 but so much has changed since then.
It's the only registered community provider locally and Kāinga Ora is present, but only has 13 residential social housing properties in town – one third of the 40 that Queenstown Lakes Community Housing Trust has.
But it’s not social housing that Queenstown needs, it’s homes for working people and those trying to get on the property ladder.
When the trust started it was focused on housing those on moderate incomes with a small deposit.
The trust would cover $150,000 of the $500,000 property and over time the owners would buy the trust out and have their own home.
That model worked well for the first 10 years, but then entry-level homes shot up to $750,000 but many households could still only afford $350,000 towards a property.
Over time the trust has transitioned into leasehold property where the land is forever owned by the trust and a below-market-rate rent is paid on that while the house is owned by the tenants.
From there the rent-to-buy programme was created and in 2015 the National government opened the income-related rent subsidy to community housing providers, which allowed the trust to get into affordable renting options.
To date the housing trust has helped 260 households, has 100 homes under construction and about 140 homes in its property portfolio (40 of which are public housing).
Though there is little demand for social housing, there are 1,050 households approved and waiting to get into a property with the help of the trust.
To qualify, one of the people in the household must have residency.
“They’re offering jobs, but the applicants are saying no in the end because they can’t find accommodation.” - Julie Scott
Scott applauds the Labour government for the pace in which they’ve built more public housing but says there simply isn’t enough supply for the rest of the property spectrum.
The progressive home ownership scheme has been successful, and the trust is calling on Labour and National to continue it, whoever is in government, when the pilot runs out in June next year.
The Airbnb factor
The problems that arose pre-pandemic that are only worsening are mostly related to landlords choosing easier and more cost-effective paths.
Airbnb and tenancy technicalities play a big part in the 27 percent of the housing stock in the district not being used, Scott tells Newsroom.
For a start the healthy home standards don’t apply to Airbnb, so landlords see an advantage in not having to pay to meet those requirements and can often make more money by renting for shorter periods of time than having a full-time tenant.
Fixed-term leases have also mostly disappeared now that leases become periodic after 90 days at the end of the tenancy, and there are only certain ways landlords can reclaim their property for their own use.
“It wasn’t ideal, but we were seeing some landlords happy to rent out for six months or 11 months on the basis they could have the place for the other half of the year or the one month over summer or winter that they wanted.”
Getting the property out of the fixed lease has become too much of a “palaver” for many, Scott says.
“All these landlords who would happily rent out their properties for 11 months but want to know they can get back when they want it back are not doing it any more because of the risk associated with it.”
That means the number of houses being used for short-term holidays or not at all is significant, when they’re actually perfect for seasonal workers for some months of the year.
Queenstown independent economist Benje Patterson says even if one percentage point of the 27 percent of unoccupied homes were freed up, it would equate to an additional 200 rentals and 600-1000 beds for workers.
Though Scott says there is merit in some of the residential changes from a tenant’s perspective, “it’s had a whole heap of unintended consequences for this district”.
The trust still has a big focus on housing key workers such as police, nurses and teachers, and principals in the area recruiting for the 2024 school year are hitting a wall.
“They’re offering jobs, but the applicants are saying no in the end because they can’t find accommodation.”
Scott says the trust is trying to find homes where they can for frontline workers, “but we can’t magic them up out of nowhere”.
“When we first set up, our goal was to attract and retain key workers, but the need has evolved.
“There were no issues finding rentals when we started out, it was easy to get a cheap one, but the availability and affordability of rentals has changed dramatically, especially since Airbnb,” she tells Newsroom.
For 16 years the trust has provided where it can, but that job is getting harder, and Scott says there’s no quick-fix solutions.
Her sense is even though the community is less outspoken about the housing crisis, it hasn’t lessened. Her great worry is that it’s just become normalised.
