Media release

From: Motu Economic and Public Policy Research Trust

New research shows rental housing welfare support has not increased rental costs

A new study from Motu Research shows the 2018 increases by the New Zealand Government in accommodation welfare support has not led to increases in rents.

In 2018, the Government changed its Accommodation Supplement policy. The Government made large increases in the maximum support available in Accommodation Supplement areas.

“The Government policy changes meant large differences in Accommodation Support increases for people in locations straddling boundaries around shifting Accommodation Supplement areas. This research examines the changes in rent payments for recipients located on either side, and near to, those boundaries,” says Dean Hyslop, Motu Research Senior Fellow.

Motu’s research examines if the rent increases on the sides of these boundaries that received greater increases in accommodation support were larger than on the other sides.

“We found Accommodation Support increased on average $14 - $19 per week more for recipients on the sides of boundaries with larger increases, relative to those on the other side. Raw rent increases were about $9 per week on average more on the higher increase sides of boundaries,” he says.

But the rent changes were negligible when we considered other characteristics of the recipients of Accommodation Support.

“There is little evidence the increases in accommodation support led to higher rents across these contrast-boundaries,” says Dean Hyslop.

The Motu Working Paper “The impact of the 2018 Families Package Accommodation Supplement area changes on housing outcomes” by Dean Hyslop and David Maré was supported by the Ministry of Social Development.