Housing dividing generations

By   /   May 5, 2016  /   47 Comments

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Home ownership is an issue that divides our country and our generations. There are hundreds of thousands of these young New Zealanders locked out of home ownership and they have a name, Generation Rent.

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Right now there will be young couples sitting around their dinner tables, in their rented kitchens, pouring over their household budget wondering how they’ll ever get to own their own home. Maybe they’ll escape in front of the telly watching one our many home renovation shows. For many struggling to save a deposit and watching the out of control house prices TV shows like The Block or Mitre 10 Dream Home aren’t reality TV they’re fantasy.

Home ownership is an issue that divides our country and our generations. There are hundreds of thousands of these young New Zealanders locked out of home ownership and they have a name, Generation Rent. This is a generation stuck in poor quality rental accommodation with out of date tenancy laws. These are people who want a home to call their own and raise a family in but find even when they’re working hard and saving the deck is stacked against them.

Housing unaffordability isn’t an accident or the result of the forces of nature – it’s the result of deliberate policies, deliberate policies skewed to screw the scrum, deliberate policies that benefit and profit property investors over new home buyers. These are policies that encourage speculation and increasing debt to buy multiple homes to capture future capital gains. It’s clear something is out of kilter when a house earns more in a few months than a person working for a year or two can. It’s no way to run a country to reward property speculation over investing in productive enterprises and creating jobs. It’s a ticking time bomb.

Simon Bridges said last week however that we don’t have a housing crisis. He should try saying that to someone working on minimum wage, paying 12% before-tax compulsory Student Loans repayments trying to save 20% for a deposit who is then told to save for their retirement too and see what they say. Simon Bridges thinks there’s no crisis but he should try saying that in Auckland where the median price has increased by $100,000 since January this year or in Otara where 80% of recent buyers were estimated to be investors. Others like John Bolton, chief executive and founder of Squirrel Home Loans thinks young Kiwis just need to save harder. He should try saying that to the couple who don’t go to Bali twice a year; don’t drive a BMW on lease; don’t have a 42″ plasma TV and don’t spend $200 at the bar on Friday night but who are told through the media it’s their fault they aren’t disciplined enough to buy a house.

There’s thousands of hard working, disciplined people who see home ownership as out of their reach alongside the families living permanently in garages and holiday parks and the unknown numbers sleeping rough. We are facing a crisis, and anyone who says otherwise has their head in the sand and is out of touch. It’s a crisis driven by policies that result in benefiting one generation over another.

Once upon a time we lived in a country that was described as a ‘Half Gallon Quarter Acre Pavlova Paradise’ where home ownership was the cornerstone.  It was once called the Kiwi dream. Today, it is just that, a dream and home ownership rates have plummeted to levels not seen since the early 50s. Like the immortal question ‘who ate all the pies?’ Who bought all the houses? The houses haven’t disappeared they’ve been snapped up and rented out and it’s younger Kiwis who are missing out. A great president once said ‘A house divided against itself cannot stand,’ yet we have allowed our generations to be divided by housing access.

For my generation called Millennials, Gen Y, or Generation Rent housing unaffordability is one of the most pressing symptoms of wider generational inequality. This generation, could well be the first generation to be worse off financially than their parents’ generation. If you are a believer in progress, that’s a big deal.

It’s a generation burdened with $15 billion in student loan debt who can thank politicians who received free education for the ‘privilege.’ It’s a generation labelled fussy, lazy or Gen Y-ny (get it, whiney) but in reality it’s a generation working long hours with limited job security in an imbalanced, indebted economy whose glory days were half a century in the past. For my parents’ generation there was state support to get into a house, free education and a job for life but today a good job, an affordable education and most of all a home to call your own are considered luxuries. This generation is inheriting unswimmable rivers, species going extinct and the real possibility of runaway catastrophic climate change.

These are big issues but what is the Government focused on? Flags and foreign trusts. Governments have ignored these problems because as the electoral data show younger Kiwis are much less likely to enrol and vote than older Kiwis. If Generation Rent just knew their potential electoral power we could bring back balance and restore the Kiwi dream of everyone getting ahead.

We can fix the housing crisis and bridge the generational inequality gap. I believe fair and affordable housing is a basic human right for all New Zealanders and if you work hard you should be able to buy a house – even in Auckland.

The solutions to the housing crisis are hardly rocket science. We need the Government to rediscover their old role and simply build a whole lot of new homes. We need a comprehensive capital gains tax (excluding the family home) to remove the unfair tax incentive to invest in property. We need restrictions on foreign property ownership like they have in many other countries, including across the ditch and we need modern tenancy law including a warrant of fitness for rentals. Lastly we need a smarter approach to city planning that builds livable, denser cities designed around high quality public transport. This is all doable and normal overseas.

After eight years of saying much but delivering little it’s clear this government lacks the courage, conviction and vision to do what’s right for all New Zealanders. Sure, it’s been a political problem for years and years but I don’t think we should give up, because next year, yes next year, we can change the government and we can deliver affordable and fair housing for all.

 

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About the author

I'm a dad and a Member of Parliament for the Green Party of Aotearoa New Zealand. I can't add any more friends but subscribe to my feed to find out what I'm up to. Here is my website: www.greens.org.nz/people/garethhughes Authorised by Jon Field, Level 2, 17 Garrett Street, Wellington.

47 Comments

  1. Dan says:

    If you have a house, you have a base, your family has a home, the family has stability in respect of schooling, participation in sports and so on. A family home is extremely important and i wonder why more is not done to encourage it, this is an area where the government should b e more proactive – getting families in their own homes, but not stimulating the marked where the cost of housing goes up to much.

  2. CLEANGREEN says:

    Good article Gareth keep the sham exposed about this window dressing government that has been shown now to be completely corrupt, as this article shows.

    Government are selling our state houses for peanuts to their mates for them to make a killing and probably using blind Trusts to boot.

    http://www.radionz.co.nz/national/programmes/checkpoint

    • richarquis says:

      “Keep the sham exposed.” Agreed, but… The sham will only be exposed when it’s no longer being swept under the carpet. Sadly, the necessary populace to keep National in power have no such desire.

  3. jay1 says:

    This social evil is so entrenched in our society it would take a political convulsion to repair it and a very brave and committed leader and his/her party. A start would be a 90% CGT backdated 10 years for unsold buy to rent houses. The FIRE sector has encouraged and profited from this social vice. Finance Banks make a a fortune from mortgage slaves in interest payments on vastly overpriced housing stock. Insurance mops up fortunes from large premiums on overpriced housing. Real Estate collect ever bigger commissions on sale of overprice housing. Housing capital gain speculators (oops! investors) make huge windfalls from a market bubble totally out of control.

    However the real economy suffers from debt deflation as mortgage slaves don’t have enough left over to partake fully in society, and rent serfs don’t have any disposable income left over to buy the goods and services they need. Investment in the real productive economy goes begging as speculation by the FIRE sector is far more secure and risk free.

    • jay1 says:

      Also any government bringing in these reforms to end the rentier economy parasitism would last but one term as the opposition would be voted in next election to reverse what they have done.

      See what I mean about entrenched!?

  4. saveNZ says:

    Gareth, you are a great politician and a credit to the Green party.

    But the Green party so not have a clue about property and the crisis in Auckland. Maybe get someone to come down and live in Auckland for a few years and at least talk to some people who have lived here for 20 years, rented, owned and so forth to get an idea what is going on.

    Firstly, there is a rental shortage in Auckland as well as a shortage of houses. So blaming landlords for the shortage of rentals is false. We need more landlords, if this so called solution of perpetuating generation rent as well as continuing immigration is Green policy.

    Personally would prefer a more hopeful message of getting people into homes and home ownership rather than more rental standards. More state houses etc.

    What happens if people choose not to rent out houses? This is already happening and people are leaving houses empty. Chinese as a culture leave often leave their houses vacant. Do you have people going around checking and a tax on that?

    Immigration is massive in Auckland. There has been record immigration for years now. But no jobs being created. If no capital gains taxes are on the family home, but 67,000 people per year are moving here, then again how does this help? If the inward migration is more than the amount of houses being built then you will still have no rental properties for the landlords to rent out for generation rent.

    In addition the smarter approach to planning. Good luck. Auckland council planners are surrounded by corrupt, stupid, inept officials who grant every application (with a massive amount of fees), the chaos being created by this is huge. If you are in Auckland you wake up and find your duplex is about to be demolished and you were never notified, the ports of Auckland have stolen your harbour, Bunnings have put in a warehouse in a residential area next to a childcare centre. Monstrous spec houses are going up, not to be affordable that block out the neighbours sun, making it damp and cold. Entire apartment blocks are covered in plastic doing repairs from previous council, developer and government mistakes in consents.

    Talking about more council control on housing in Auckland is like throwing votes to the National party here.

    On paper maybe the Greens policies seem to be good ones, in reality the government and councils are major stuff ups and the policy will not work as intended, mostly because it fails to understand immigration is the main issue and council planning officers are not trusted. Neither is government but you have to vote for someone (or not). The newbies coming in are vote bait for John Key it akin to vote tampering with what is going on. They read the herald and believe we are the land of milk and honey (literally) and John Key is a God. They only thing that is wrong is we need to lock up more locals who don’t work hard enough and more law and order.

    Land and Housing is a vitally important issue for most New Zealanders and 65% of Kiwis still own their own house so alienating home owners and not listening to what Auckland is saying, for Labour and Green policy could leave National taking out a 4th term.

    I certainly hope not.

    • Sam Sam says:

      If we were to prick the Auckland property bubble with a CGT I could corporatise my workforce and tens of thousands would lose there jobs. Apple inc is great for showing us where “tax savings” can be made because that’s all the property bubble is. It’s one gigantic tax doudge which means those not in on the game pay twice as much tax.

      That is just why a CGT won’t work. The real problem is that it takes 20 years to save $400 dollars a week just to save the 200k deposit for a house. Average Auckalnd wages are half that at $200 so the average wage can’t even support average Auckland house prices. So if you haven’t got the wages nothing will fix a property bubble. It dosnt matter about supply and demand issues or change the size of rooms because you don’t have the wages to support any of those ideas.

      Instead of a 2.5 billion dollar 4K long passenger rail loop in Auckland city we could have installed a maglev rail line from Hamilton to Auckland CBD cutting the travel time to 20 minutes. People could live in Hamilton cheaply and work in Auckland. Or you could raise wages so the economy can support the population. Then capitalists can eat there cake and every one else gets a slice too.

    • Mike in Auckland says:

      You raise valid concerns, and you are right, Gareth has again avoided naming one cause of the situation, that is continued net gain of immigrants. It is not only natural growth and returning Kiwis that come to Auckland that push prices up by increased demand.

      We need to reduce immigration, and focus more again on the required skills list, and less on other aspects of qualifying people to immigrate here.

      Immigration is the elephant in the room, which hardly any politician dares naming, I wonder why?

      Just mentioning the word already leaves you exposed to criticism and attacks, so bizarre as being “xenophopic” and the likes, which is nonsense. It is the mad PC that seems to make politicians avoid the issue.

      • Sam Sam says:

        Our entire recovery is a debt driven bubblecovery. The only solution is to roll up NZs debt onto the IMF balance sheet. Alteriviley we need a new class of kiwi voter that is less retarded than the last and can bring about the destruction of neoliberalism before central bankers send us into a new dark ages.

    • fatty says:

      “Personally would prefer a more hopeful message of getting people into homes and home ownership rather than more rental standards. More state houses etc.”

      Have you read the Green’s policies?

      9. Housing Affordability

      The Green Party believes that all people should be able to live in appropriate and sustainable housing for a cost of no more than 30% of their income unless they freely choose otherwise. For a significant proportion of the population this is becoming very difficult, if not impossible.

      Home ownership should be an affordable option for those who wish to do so.
      A) Managing investor demand for housing

      To make housing affordable the growing gap between incomes and house prices, and both the demand and the supply side of housing, must be addressed.

      A capital gains tax on property (excluding the family home) will help to restrain house prices by limiting speculative investment in property.

      The Green Party will:

      Introduce a capital gains tax on all but the family home (see our Economic policy).

      Limit residential land sales to New Zealand citizens and permanent residents (see our Trade and Foreign Investment policy).

      B) Reducing house construction costs

      Building costs in New Zealand have increased markedly, due to increases in the price of materials, changes in building specifications, and increased compliance costs. The Green Party will:

      Identify ways to lower the costs of house construction in New Zealand.

      Work with the building industry to improve productivity in the building sector.

      C) Making home ownership possible

      In order to enable households to save a deposit, and to obtain and service a mortgage, the Green Party will:

      Legislate to increase relevant rates of income for all low income New Zealanders including through annual adjustments in the minimum wage and a universal child payment (see our Industrial Relations and Children’s policies).

      Change income support systems so that savings towards a deposit are not treated as assets for benefit abatement.

      Increase the availability of low interest finance for households seeking home ownership, including through shared equity and supported savings.

      https://home.greens.org.nz/policy/housing-and-sustainable-communities-policy

      • Sam Sam says:

        Yeah. All that dosnt mater if you don’t have the wages to support those ideas. thats the beauty and the irony of what wheeler and central bankers have made workers into.

  5. Jack Ramaka says:

    National need the cash to pay the interest on the $120 Billion JK has borrowed, not sure where that money went?

  6. saveNZ says:

    I would love the Greens to do a Bernie, and focus on the .1% billionaires.

    Bernie vs. billionaires: Sanders jokingly supports telling the 1% to “f**k off”
    “I can’t quite phrase it like that, but… I like it,” Sanders said when a supporter told the ruling class “f off!”

    http://www.salon.com/2016/05/03/bernie_vs_billionaires_sanders_jokingly_supports_telling_the_1_to_fk_off/

  7. Castro says:

    The solution is now collectivised violence from below. There are enough people shut out who are prepared to fight. The game is rigged. Around 30,000 committed fighters are all that is needed to take this bitterly divided, increasingly non-existent “country”. Words are cheap; but mark these as you watch the train wreck unfold.

  8. WILD KATIPO says:

    ‘ After eight years of saying much but delivering little it’s clear this government lacks the courage, conviction and vision to do what’s right for all New Zealanders. ‘
    …………………………………………………………………………………………..

    I agree with everything you say but this sentence.

    This govt does have COURAGE, and CONVICTION and VISION. But not for the best interests of New Zealanders or any future generations.

    1) They have the COURAGE to implement unpopular policy’s designed to enrich the already well off, particularly those of foreign investors. As well as retaining their voting base by implementing policy’s designed to curry favor with the local affluent. Tax cuts for the rich , lax trust laws which enable shady foreign and local investors to park their cash in this country and generous tax concessions for corporate’s which translate to paying far less than a working person by way of taxation ratio yet making huge profits at the expense of that same worker through price gouging. If it were not for the release of the Panama Papers recently we still would have been none the wiser.

    2) Their CONVICTIONS regarding neo liberal ideology and globalization meshes perfectly with their current policy’s of creating a vast pool of low paid and insecure workers ( serfs ) who can be kept in line by threat of job loss , casualisation of labour , legislation aimed at union busting , and competition for an ever decreasing job market by unfettered immigration regulations.

    3) Their VISION of the neo liberal charter and to create such conditions has almost come to complete fruition , – started 32 years ago under Roger Douglas – evident in the persistent and unpopular dogma of selling off of S.O.E’s , destroying the manufacturing base with dismantling of tariffs, FTA’s , outsourcing to foreign country’s , selling off of sensitive lands and encouraging foreign speculation of our housing stock. On the social side, the dumbing down of educational standards coupled with the privatizing of education , prisons, denying funding for vital social services, and on and on it goes… even to the extent of $26 000,000 being spent on a flag referendum that nobody while at the same time we had people dying in dilapidated state houses ,- and their answer?

    Privatize state housing stock.

    To foreign tenders , no less.

    This is the world we hand on to the next generation. And I for one could not blame them not one bit if at a future date they or their children burn down the whole rotting , fetid , hollowed out corpse that is the neo liberal charter along with all its adherents.

  9. Typical Renting Kiwi says:

    Nothing better illustrates the failure of the neo-liberal “dream” than falling home-ownership in this country. It’s not just the elephant in the room – it’s the whole fucking herd!!

    Why is it that home ownership has fallen since 1984? Any guesses? Let’s look at the rise of income/wealth inequality, and take it from there.

    Of course, apologists for the New Right will make all sorts of stupid excuses, such as it’s the “choice” of people to rent rather than buy. Of course. Everyone wants to have the “dream” of being in a rental-trap for the rest of their lives, filling the pockets of their landlords. Who wouldn’t want that? Oh yeah, the speculators who actually OWN properties.

    Introduce a capital gains tax, and make the fucking thing painful to pay.

    Problem sorted.

  10. paigey says:

    The problem isn’t the government, it never has been. The problem is the voters, more specifically young people not bothering to vote or participate actively in politics. The government won’t fix your generations problem only you can.

    Secondly I own a house and I don’t feel any different then I did as a renter, so if you think your life will improve dramatically for the better just because you own a house you are going to be disappointed. Ownership is overrated and many people believe it’s the answer to happiness when it’s really about lenders making money. Banks sell you the “dream” the same way tech companies sell you smartphones. They target your emotions.

    You don’t need to own a house to be happy. You’re only on this planet for a short time and then you’re gone and you don’t get to take your house with you. So don’t stress about it just enjoy life, use the deposit money for a nice holiday instead. That’s my advice.

    • Lara says:

      It does help though to create more stability.

      Getting kicked out of your over priced rental every six months or year because the landlord puts it on the market to realise capital gains sucks.

      Higher home ownership in a society leads to a more stable society, better learning outcomes for kids (who don’t have to keep moving schools) and lower crime.

      • paigey says:

        Stability is all in the mind, owning a house won’t create stability. There is no correlation between owning a house and academic achievement.

        • Lara says:

          Bullshit.

          There is correlation between home ownership rates and stability of society.

          “The literature review finds considerable support for an association between homeownership and both improved property maintenance and longer lengths of tenure”

          Put simply. Higher rates of home ownership, longer lengths of tenure.

          Less moving for families = less interruption to kids schooling.

          Each time kids move schools they effectively lose 6 months of learning. Too many moves and they fall behind.

          It’s not rocket science dude.

        • Anonn says:

          Evidence for that last statement please. I would suggest that house ownership rates go up along with socioeconomic status, and academic achievement certainly goes up with socioeconomic status.
          As for ‘stability is all in the mind’, I would have to say it is a physical thing. Being uprooted regularly, as is common with renting in this country at least, is not stability by definition. Money problems and constant change of address can be shown to affect family stability and divorce rates etc.
          That is not to say that owning a house doesn’t contribute to those things either, especially with the size of mortgages in Auckland. I would agree that owning a house doesn’t create stability, but it sure creates a good base for it.

  11. slumbergod says:

    I’d add that sheeple also need a party worth voting for. And that isn’t Labour. Labour are the ones who raped New Zealand’s future first and don’t even have the balls to say sorry and offer solutions.

  12. Andrew says:

    I see a lot of whining in this post but I don’t see a single constructive idea to remedy the problems you claim exist.

    • WILD KATIPO says:

      You could try reading that right wing rag the Herald and see that even they are doing regular articles about the failure of you precious self enrichment party, National.

      Failing that , … if you wish to remain blind and stupid …. that is of no concern to us.

    • Gareth HUghes says:

      I believe I offered five:

      The solutions to the housing crisis are hardly rocket science. We need the Government to rediscover their old role and simply build a whole lot of new homes. We need a comprehensive capital gains tax (excluding the family home) to remove the unfair tax incentive to invest in property. We need restrictions on foreign property ownership like they have in many other countries, including across the ditch and we need modern tenancy law including a warrant of fitness for rentals. Lastly we need a smarter approach to city planning that builds livable, denser cities designed around high quality public transport. This is all doable and normal overseas. – See more at: https://thedailyblog.co.nz/2016/05/05/housing-dividing-generations/#sthash.WnrEvENp.dpuf

      • Mike in Auckland says:

        Don’t even bother trying to answer and explain anything to Andrew, he is a frequent troll here, he will criticise you and others, no matter what you say, whether it makes sense or not.

      • saveNZ says:

        @Gareth – if the Greens are not prepared to name inward immigration as an issue for housing they look like they are out of touch and burying your heads in the sand.

        The point is National is actively working to increase the problem of immigration, while the opposition watch on and appear to support by their silence on the issue.

        • Danyl Strype says:

          Inward migration has no significant impact on housing prices, mainly because housing shortages are not the main cause of the price hikes (or the poor deal renters get).

          According to Statistics NZ, net migration into Aotearoa averages less than 20,000 immigrants a year:
          http://www.stats.govt.nz/browse_for_stats/population/Migration/international-travel-and-migration-articles.aspx

          In a country of about 5 million people, on a land mass about the same size as Britain (just over 63 million residents at the time of the 2011 census) and Japan (about 126 1/2 million in 2015), this level of inward migration is a drop in the bucket. Divide that 20,000 by an average household of 4 people, and we’re talking about an increase in population that needs about 5000 new homes built per year, across the entire country. Easily covered.

    • I see a lot of whining in this post but I don’t see a single constructive idea to remedy the problems you claim exist.

      With that gormless remark, Andrew, you’ve proven you actually haven’t read Gareth’s post.

      Otherwise you’d notice his constructive suggestions in the second-to-last paragraph. Epic fail on your part, mate.

      • Mike in Auckland says:

        That is what I thought, he did not even read the post by Gareth, as his criticism is void in an empty space, ridiculous.

  13. crikey says:

    My concern is that this is a form of social engineering, the divide between “Baby Boomers” and this generation is having a wedge driven through. I daily sense hear quotes implying that my (” Baby boomer”) generation have caused this problem, through our greed.
    I am not sure how to address these accusations, sometimes subtle, but never the less implicit in the comments, without sounding defensive, and reinforcing the narrative.
    I have worked for 30 years for the Health Service, the creation of which which I am so proud to be a part of. I have no savings, and have eventually bought my home. I passionately wish that the next generation could have the same educational, economic and social advantages that we had, and I take evry opportunity to talk about how important it is to vote for Greens/Labour to correct the current trajectory.
    I am appalled by the current government, who do NOT REPRESENT THE BABY BOOMERS. They are their own breed.

    • GettingOn says:

      Agree. I actually think the baby boomers are being blamed as a group for what is really social manipulation by an elite group of industrialists. If anyone here has Netflix, I urge you to watch the Noam Chomsky documentary which has just cropped up. He explains how the recent events are a corporate attack on the widening of democracy that occurred in the 60s and 70s. As a late boomer, I remember as a teenager anticipating and hoping for a growing trend of liberalisation and democracy for all leading to a better world for all.

      However, this also means fewer goodies for those at the top so it has been stopped, violently and at all costs. By denigrating certain groups, e.g the poor, or setting one group against another, e.g. young people against boomers, we are distracted from who is really controlling things and who is really to blame. As Chomsky explains, it not that the rich want more than you, it’s that they want it all. They’ve turned it into a zero sum game.

      Who were the current boomers supposed to vote for – Labour? Many did in the 1980’s and look what happened. If you look at all the main parties, they all represent the status quo. Labour recently discussed some innovative ideas like a national income, but this won’t see the light of day because it doesn’t suit the head of the corporatocracy who have infiltrated all the main parties.

      It has been suggested that change won’t come top down, but bottom up. Not from protesting, which is an attempt to get those at the top to change, but from cooperative action at the bottom which forces those higher up to adapt. Once we start seeing how powerful we are as individuals acting collectively (boomers and millenials) we can affect change.

      • save nz says:

        +100 GettingOn

        The change is starting worldwide with Bernie, Corbyn and Sadiq Khan gaining widespread public support and power. But you can be sure the .1% and MSM are trying to undermine them.

        After the MSM and government propaganda on war on terror, it shows Londoners can think for themselves and vote accordingly.

        • Crikey says:

          Aye, yesterday was a great day, and I watched the announcement of Khan’s election several times, enjoying more each time!

  14. Mike in Auckland says:

    A good post by Gareth, I must say.

    I don’t belong to the younger generation anymore, but you can include me also into ‘generation rent’, as during my life I had periods in employment and also longer ones without, which has left me with virtually no savings and no option to ever own my own home, certainly not here in Auckland, where I live.

    I see hardly any one or two bedroom places advertised below $ 400 a week now, that is in my view showing we have a true housing affordability crisis.

    The solution will not be easy now, after the irresponsible National led government allowed the situation to develop, which we have now. Nick Smith makes me damned angry, same as that arrogant Paul Bennett, who first treated those on benefits like shit and laboratory rats to conduct new social experiments with, now she is about to dish out the same mean treatment to those needing
    “social housing”.

    Housing NZ did years ago tighten the criteria to qualify for a state home, that was by throwing those in two categories out of the housing waiting list, and only category A persons now get a true priority, as the ones in category B are generally told to look on the rental market for homes.

    This government wants to reduce state housing and is busy selling homes of Housing NZ to organisations that work with developers, which means they will sell Housing NZ homes and the ones they build on the land largely to private home buyers, and only a fraction as “affordable” homes to those entitled to them. The remaining “social housing” will at best only match the former Housing NZ numbers of homes, so will not increase social housing at all. And redeveloped homes are now often blocks of tiny units, where neighbours live close to each other with little or no storage and where noise and other issues will lead to frictions.

    House prices in many suburbs in Auckland are over a million a piece, on average, and it takes over 9 annual incomes to get into a home now. Rents are exploding, and investors play a game where they let homes at “market rates” driven up by high demand and little supply, then also in the longer term speculating on intensification in areas rezoned under the Auckland Unitary Plan. I bet much land and house buying is by developers that want exactly that, intensify and sell more at high prices.

    As the square metre of multilevel homes costs more to build than single level housing, there will not be any cheaper homes to come, as the market situation dictates that they will be above what is deemed affordable.

    Banks sit on mortgages that people have that force them to not favour a drop in home prices as that will hit the equity in existing mortgaged homes, and could hit their earnings.

    That is why the government will not allow a situation where supply will be so great that it will push prices and rents down, as their voters are generally those that own homes, and will be hit hard.

    So I support the Greens with their policy to build more affordable homes and also state homes, as it is the only way to push prices down. It will hit the ones that own now, with debt, but that is the price that is to be paid, inevitably, as we have no growth in wages and incomes for the poor and those on benefits. Forget that BS increase of $25 a week for parents on benefits, as most will not see much of that in their pocket, after deductions of allowances and top ups they also get. And where does that meagre amount leave you with ever increasing housing?

    Greens and Labour need to work overtime to interest, reach and attract more votes from the so far missing million, that is the only way to change the polls and election results, as otherwise we will see the vested interest holding voters and lobbyists help Key in for a fourth term.

    So, Gareth, you know the challenge and what needs to be done. Best wishes, I will cast my vote wisely in 2017, and the Greens have a good chance of getting it.

  15. The solutions to the housing crisis are hardly rocket science. We need the Government to rediscover their old role and simply build a whole lot of new homes. We need a comprehensive capital gains tax (excluding the family home) to remove the unfair tax incentive to invest in property. We need restrictions on foreign property ownership like they have in many other countries, including across the ditch and we need modern tenancy law including a warrant of fitness for rentals. Lastly we need a smarter approach to city planning that builds livable, denser cities designed around high quality public transport…

    I endorse every point you’ve made, Gareth. Those are constructive, common-sense suggestions and only blind dogma would be a barrier to any government implementing such a programme.

    As well as building housing for New Zealanders, it would also provide much needed work for our tradies once the Christchurch re-build begins to wind down.

    One of the curses of the building industry is the never-ending “boom and bust” cycle which is undermining and demoralising. It sends our skilled tradespeople overseas, with the result that when we need them, they’re unavailable.

    Unfortunately, I don’t see National as being sufficiently bold and visionary to implement a building plan like this.

    New Zealanders will have to make another choice for a new government if they really want this problem (I refuse to call it an “issue”) addressed.

    The Greens are on the right track here.

    (One of my very first blogposts in 2011; “Can we do it? Bloody oath we can!” – https://fmacskasy.wordpress.com/2011/08/03/743/

    • Mike in Auckland says:

      “One of the curses of the building industry is the never-ending “boom and bust” cycle which is undermining and demoralising. It sends our skilled tradespeople overseas, with the result that when we need them, they’re unavailable.”

      In a more carefully managed economy under a responsible government excessive booms and busts can be avoided and at least contained.

      But we have not had such a kind of government for a while, hence the market aberrations that we have seen for many years now, even under the last Labour led government.

      Neoliberals hate rules and the word management, they want it laissez faire, and if they interfere, it is only to bring about changes that favour the rich, the wealthy and those doing business for profit and little else.

    • Sally's Husband says:

      Read your blogpost, Frank. Well reasoned analysis and one could almost think the Greens based their policy on what you’ve written.

  16. darth smith says:

    i would argue the solutions are higher interest rate an end to cheap credit and ban on none residents buying homes we need high interest rates to bankrupt the speculators but new Zealands record high house hold debt of basket case proportions is a result of greed a crash is inevitable no young new Zealander should buy intro this market please watch this 60 min report from Australia we are not special its the same here
    https://youtu.be/j_ktN_h7-J4

    • paigey says:

      The difference in NZ is that me have a higher demand due to cheap loans and relaxed regulation in regards to foreign investment. Combine that with low housing stock which makes us pretty safe from a housing bubble burst. In Australia they have an over supply and low demand.

  17. Stephen Howard says:

    I agree with Gareth that the only way to overcome the housing crisis is central government and local government building appropriate housing for those who need it. It should be secure and well designed and if rents are based on need and income then the government could pepper pot higher priced homes within or next to cheaper homes. With government leading a green and sustainable redevelopment of our inner cities could be achieved. We do need landlords but they don’t need to be private rent gougers who have sold their souls to the banks, foreign owned banks at that.

    But any realistic response needs to recognise that secure and stable homes need to be near secure and stable work.

    It’s not a one dimensional problem, and the Greens will only address the whole problem when they start speaking of socialism.

  18. m.gray says:

    National have always sold our state houses I don’t understand why NZers haven’t learnt lessons from the past. Last time National was in power they created huge inequalities and the closing the gaps policy was needed to remedy all the problems they created and they are doing exactly the same now yet NZers continue to vote for them( are we dumb or what) Also many Nzers said they were sick of Helen Clarkes nanny state telling them what to do yet they voted for one of the most controlling and authoritative governments that are encroaching on our privacy and have sold as down the toilet.

    • save nz says:

      +1 MGray

      People did not vote for National last election, the problem was that 1 million people did not vote due to disgust due to schizophrenic behaviour and policy from Labour. It is the missing voters who probably used to vote Labour that need to be motivated to vote again.

      To look at the issue for voters, you only need to look at Auckland and the Mayoral race. Auckland’s want a left major that is why they voted for Ken. Unfortunately he let us down.

      What is Labour’s answer – to put in Phil Goff – the guy who bought in student loans and supports TPP. That is why people don’t vote. they have nobody to vote for.

      We have Penny an anarchist vs Nat Lite Goff and a selection of right wingers. What a choice!

      Goff will get in probably just as National got in. It is not due to the voters choice – it is due to the lack of choice in candidates and their similar ideology.