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 This is a generation stuck in poor quality rental accommodation with out of date tenancy laws.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.