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September 02, 2020
Hannah Riley

Rates affordability analysis for Local Government

Low and fixed income households struggle to afford rates'

BERL has worked with various local councils to conduct data analysis of rates affordability in their district, and to draw out the story from the data to provide decision-makers with useful, detailed information.

BERL created a benchmark and estimated the extent to which different household types could afford their rates bills, given their estimated income. This involved constructing eight typical household compositions living in the residential properties in the area. BERL estimated the average household income by household composition, as well as the median, lower quartile and upper quartile household affordability by household composition. BERL also calculated the median, lower quartile and upper quartile rates payable for the district and region. This was carried out for the district, wards, and key relevant smaller areas.

The analysis of rates affordability in the district highlighted that particular household types will have rates affordability issues and that these households predominantly have low or fixed incomes.

The impact of COVID-19 is creating employment loss and subsequently income loss. This may affect the ability of households to pay rates, therefore increasing rates affordability issues. The impact of COVID-19 has also caused local authorities across the country to reassess their rates, as well as their long term planning assumptions and documents in an environment of extreme uncertainty. It is important that the focus on the four wellbeings kaupapa remains unchanged in these decisions.

Please get in touch if you would like help understanding rates affordability in your district.