New Zealand’s ongoing housing crisis has had a disproportionate impact on Māori communities, particularly those in rural areas, where access to healthy homes is limited and collective land ownership complicates traditional banking models. While the government has attempted to address these challenges—recently pledging over NZ$730 million for Māori-led housing solutions and an additional $200 million investment into affordable rental properties—innovative approaches emerging from within Māori communities themselves are offering promising alternatives.
A standout example is Whare Ora, a community-driven housing initiative based in Te Tairāwhiti (East Coast), which is addressing the housing shortage through an innovative model focused on healthy, affordable, and transportable homes. Launched in 2020 and operated by Hikurangi Enterprises, Whare Ora has already provided more than 80 homes to local whānau, directly targeting the dual issues of housing deprivation and financing challenges tied to building on Māori land with multiple owners.
The Financial Barriers to Māori Homeownership
Despite Whare Ora’s success in creating affordable housing, financing remains a key hurdle for many Māori seeking to build homes on their ancestral lands. The problem stems from the difficulties lenders face in securing loans on Māori freehold land, which is inalienable and often held collectively, making it incompatible with conventional banking models that require land to be owned outright by a single entity.
While exceptions can be made—such as Ngāti Whātua Ōrakei’s recent agreement with Bank of New Zealand (BNZ) to secure loans via trust guarantees—most Māori landowners, particularly those without significant asset holdings, find themselves excluded from traditional mortgage options. In regions like Te Tairāwhiti, where nearly 25% of land is governed by Māori, this systemic financial exclusion prevents many whānau from utilizing ancestral lands for housing development.
This ongoing challenge has been recognized in reports from both the National Housing Commission (1983) and the Auditor General (2011 and 2014), highlighting the structural barriers to Māori homeownership that persist despite governmental efforts.
Innovative Solutions Through Community Partnerships
To tackle this issue, Hikurangi Enterprises has partnered with Community Finance, a community-focused lender, to develop a sustainable financing model for housing on collectively-owned Māori land. This collaboration birthed Kaenga Hou, a trust designed to offer a range of progressive homeownership options to whānau in Te Tairāwhiti.
The core of Kaenga Hou’s model lies in its ability to offer financing through a license-to-occupy agreement, which bypasses traditional land ownership requirements. Funded by impact investors—individuals or organizations seeking both financial returns and social benefits—this approach allows for a more compassionate investment model. Impact investors provide capital at below-market interest rates, aiming to address regional housing issues while also strengthening Māori well-being and connections to their ancestral lands.
This approach marks a significant departure from mainstream finance, which often dismisses collectively owned land as too risky. Instead, Kaenga Hou offers a fresh way to mitigate the perceived risks while ensuring that whānau remain at the heart of decision-making.
A New Ethical Finance Model
At the heart of this innovative model is a rent-to-buy program designed to balance risk for both investors and whānau. In this system, whānau make regular rental payments to the trust, a portion of which is used to pay interest to the impact investors. Another part goes into a savings account, enabling whānau to gradually purchase the home over time. A third portion is directed into an aroha fund, a safety net designed to assist whānau who may face unexpected financial difficulties.
This structure not only provides whānau with the ability to eventually own their homes but also ensures that they are not trapped in a cycle of exploitative lending. In the event that whānau need to exit the program, a portion of their savings is returned to them, and they will have paid an affordable rent during their tenure. In this worst-case scenario, the goal is to leave whānau in a stronger financial position than when they entered, while simultaneously protecting the reputations of the investors involved.
Lessons for a Te Tiriti-Based Future
Ultimately, the issue of housing on ancestral lands is deeply intertwined with the principles of Te Tiriti o Waitangi (the Treaty of Waitangi). In a recent ruling, the Waitangi Tribunal affirmed the Crown’s duty to ensure Māori have access to appropriate housing, recognizing that the guarantee of tino rangatiratanga (self-determination) over kāinga (homes) must extend to housing policy.
While the government currently offers a loan scheme for building on Māori land, it has faced persistent criticism for its low uptake and limited accessibility. This highlights the need for more inclusive, community-driven financial models like those created by Hikurangi Enterprises and Kaenga Hou, which place whānau at the center of housing solutions and offer alternatives to traditional banking structures.
These models not only address the financial barriers to homeownership on ancestral lands but also foster genuine partnerships between Māori communities, impact investors, and financial institutions. By prioritizing whānau well-being and creating systems that are flexible and adaptable, these innovative housing solutions provide a roadmap for how Aotearoa might address its housing challenges in a way that aligns with Te Tiriti and ensures long-term sustainability for Māori communities.
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