Home ownership a national obsession

By   /   May 29, 2016  /   17 Comments

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In New Zealand we have a broken attitude to renting and an unhealthy obsession with property ownership. According to IMF statistics, NZ has the fastest increasing house-price-to-income ratio in the world.

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Traditionally it’s been the expectation of most New Zealanders to own a home – an investment in the future and a tangible piece of the country to call your own. And this ‘Kiwi dream’ was once affordable. Today it’s crippling. Even those who can afford their mortgage payments and convince the bank to give them a loan are paying a huge proportion of their income. And those are the lucky ones. Renters struggle just as much. Others are families crammed into garages and single rooms, or sleeping in cars. This didn’t use to be the case. Families in Auckland could live on a single income and comfortably pay off a house.

Why is it necessary to own property in order to have security and a stake in society? Housing should not be a source of stress and insecurity. We have better things to worry about. It’s crippling our economy and it’s crippling our health. People should have a sense that the work that they do is rewarded and valued, be it raising and educating the next generation, building the infrastructure that will be around for generations to come, providing public services, developing technology.
The price of houses is a problem, but tinkering with capital gains taxes and first-home-buyer incentives is clearly not the answer. Doing this implies we have no control, that we have no sovereignty over the quality of our lives. I’m not saying the problem is families wanting to own a home – that’s not what’s causing this crisis. If private home ownership is so sacred to people, that should be their choice. But it shouldn’t be the focus of government policy and it shouldn’t be actively encouraged.

The solution we should be looking at is state housing en masse and rent control. The government could buy houses and land, build inexpensive quality housing (providing a lot of jobs in the process), and do it consistently and ongoingly. This on its own would cause the bottom to fall out of the speculation market.

Even in large, expensive cities like New York there is rent control. In the US it’s common to have long-term leases of up to 20 years, which means you can redecorate, etc, knowing you’ll be allowed to stay and enjoy the fruit of your labour. Berlin has rent control – landlords cannot raise the rent on a dwelling while you are living there, and tenants cannot be evicted without a reason – so you have long-term renting at (comparatively) affordable rates. And it’s not like these countries are a housing paradise. In New Zealand landlords don’t have to give a reason, just twelve weeks’ notice, and can raise the rent whenever they like. Renters don’t bother getting too comfortable, because they know that at any moment they may have to pack up and move on.

In New Zealand we have a broken attitude to renting and an unhealthy obsession with property ownership. According to IMF statistics, NZ has the fastest increasing house-price-to-income ratio in the world.

A glaring contradiction in the status quo is the idea that we need big investors to keep the economy going. If we scare them off by demanding high wages, resource consent, high taxes and, in the case of property speculators, rent control, then the economy will grind to a halt. At the same time people know that most of these investors do not have our interests at heart. What they have at heart are ‘the interests of the shareholders’. Are you are shareholder? I’m not.

We have to recognise that you can’t have it both ways, and that capital flight is a bloody good thing. We are then free to create our own capital – the result of our hard work, our collective skills and knowledge and ingenuity, and the abundant natural resources we are currently frittering away to multi-nationals who pay peanuts. If we gave them the finger, we could still mine and drill if we wanted to, but we’d have a choice, we’d pay people properly to do the work, we’d collect the profits ourselves, we could do it sustainably, and leave something in the ground for future generations.

And fossil fuels and mineral ore aren’t our only natural resource. If we act soon, it won’t be too late to rescue our ‘clean green’ claim of days gone by from the jaws of extinction.

But I’m getting off track. With an escalating housing crisis, people are too preoccupied about the possibility of getting turfed out on the street to concern themselves with creative solutions towards a sustainably flourishing economy. They have us over a barrel. It’s hard to get inspired when you can’t afford to get off the treadmill for a moment, for fear of losing everything. And it’s especially hard to get inspired when you have nowhere to live and the society you’re supposed to have a stake in doesn’t acknowledge your existence.

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About the author

Sian Robertson

Contributor

Siân Robertson is a student of linguistics and languages at Auckland University and an organiser for the NZ Palestine Solidarity Network. An activist globally and locally, she has been actively involved in the Mana Movement. She was deputy editor of the carbuyers' Dog & Lemon Guide for several years. She is also an enthusiastic amateur footballer and a mother.

17 Comments

  1. In Vino says:

    Well said (or written) Sian.

    NZ had the evils of urban sprawl explained quite clearly back in the 70s, yet we still have idiots trying to promote more urban sprawl. Not all of them are idiots – some are profit-gouging developers.

    With nearly 5 million people, NZ has to be dragged into the real world. Big cities (I’m looking at you, Auckland) simply must go up, not outwards. The same thing happened everywhere else, and has to happen here.

    I spent four wonderful years living in France and West Germany. The apartments I lived in were superior in many ways to the house I now live in here. I had no lawn or garden, but I did not miss them. Both cities (Cologne and Lyon) had populations similar to Auckland at the time. Most people started off by renting, then they bought an unfurnished apartment. Furniture stores advertised their wares to young couples staring off their lives with their first apartment…

    Get used to it NZ. The dream of everyone owning their own house and garden is no longer tenable.

    I would happily live again in those apartments in Cologne and Lyon – they were wonderful years.

  2. Jack Ramaka says:

    A family home provides stability for the family, with the Auckland Housing Ponzi Scheme happening and the Asian Investment happening here in Auckland, New Zealanders are becoming disenfranchised. This is social engineering at its finest and an effort by the Tories to destabilise the country.

    Wake up New Zealand to what is happening, they did it to the Maori people now they are doing it to us.

    • CLEANGREEN says:

      IN VINO & JR I couldn’t agree ore.

      This has been a divisive Government since 2008 with no respect for the average family or little guy or girl.

      What we have here is simply a group assembled as a political party here just to act as a salesperson or broker for a elite rich of the world so they treat NZ simply as a basic commodity to carve it up in little pieces and set it up for international market sale.

      No other government in history has treated it’s citizens as sheep and this land as an object for foreign sale takeover.

      Simply we don’t count in their mind and possibly they loathe us as just an inconvenience!!!!

      One man in Parliament above the rest understands this more than anyone else and he should be our next PM to save NZ. – Winston Peters.

  3. Draco T Bastard says:

    A glaring contradiction in the status quo is the idea that we need big investors to keep the economy going.

    Foreign capital brings absolutely nothing to NZ and never has done. All that foreign capital does when it’s ‘invested’ in NZ is take the profits and our resources out of the country leaving us poorer. That we need it is an outright lie that we’re told.

    Why would we need foreign money to utilise our own resources?

    The only money we need and the only money that should be in circulation within NZ is NZ$ created by the NZ government.

    • Sam Sam says:

      Foriegn investment never use to be a big problem until we sold the China (SOE sell off)

      Instead what we should be saying is NZ can produce 20k jobs for life per year

    • CLEANGREEN says:

      1000% Draco T Bastard.

      Good to see you here.

      This moronic bunch of Nactional plunderers are the scavengers we should send to a stormy sea in a leaky ship with captain Key.

      They are driving us on to the rocks why not do it to them while we can?

      https://www.youtube.com/watch?v=ZprvOrynJF8 #sthash.4zXaecfy.dpuf

      We are headed for another Global financial crash more destructive than ever seen before, as we have changed our whole monetary system from real wealth to debt based “wealth, setting us up for a major disaster coming soon.

      We are in the twilight zone before the total crash and one day we will see the banks unable to open and signal the end of the Breton woods “Alice in Wonderland” Enclosed world” they then created by decoupling the real wealth generated system, by tying the monetary value to the goods created for a new “currency trader” (John Key type)system, so now we have a system that solely relies of borrowed money to keep the “currency trader” financial FIAT money system going.

  4. WILD KATIPO says:

    No matter what happens you either build up , out or somewhere in-between. Those are your options.

    Rampant immigration has caused the stress on infrastructure. As well as downward pressure on wages and job competition.

    Capitol gains taxes are needed , and rent controls. Particularly to sever speculation. But we are not Germany or France or any European country. Those country’s have had years of small land space / high density populations and century’s of accepting tenancy’s as the norm. We are a young country by comparison.

    Young family’s and the elderly need the security of stability . The sense that they cannot be simply turfed out at the moments notice. But their needs are different from that of students who rent only for several years. Therefore there needs to be accommodation for different sectors of society. Rent controls would go a long way towards that.
    ………………………………………………………………………………………..

    You change midway through your article and focus on Capitol flight / ‘big investors’.

    And this is where it gets to the heart of the matter. We hear a lot about ‘capital flight’.

    What does all this corporate/big business do?

    1) they take massive profits out of this country.

    2) they pay a disproportionately low amount of tax.

    3) they put the burden on low wage and middle income earners for social services, welfare, health and education.

    4) they commit massive funding to lobbying parliament , backing legislation that keeps most of the populace in relative poverty .

    5) they influence our media to cast their agendas in a positive light- and pit one group against another instead of focusing on who really caused the problem.

    6) in doing so they break down our social fabric and unity and our sovereignty.
    ………………………………………………………………………………………..

    Chris Trotter hinted at the remedy. The two most significant things to change this are evident, as the power is then given back en masse to the public. As this is not simply an issue of ‘money’ but one of power imbalance. They are :

    1) Compulsory unionism
    …………………………….

    a) Private sector employees would come under the same umbrella and enjoy the benefits of public sector unions. This would ensure that :

    b) wages were tied in with the actual cost of living / inflation indexes .

    c) along with rent fixing devices based on wages / living costs / inflation, mortgage rates would then have to comply also – further weakening speculation.

    2) Revision of progressive tax rates / both corporate and individual.
    ………………………………………………………………………………….

    a) would ensure that corporation’s pay the correct amount of tax .

    b) relieve pressure on low and middle income earners shouldering a disproportionate amount of the tax burden for health education and welfare- social services in general.

    c) prevent political interference that disadvantages lower wage/ salary earners through corporate lobbyists influencing govt legislation. ie: Employment Contracts Act.

    d) ensure that govt’s cannot pit one group against another ie: govt v councils over funding – forcing unwanted privatization when adequate alternatives are available . Case in point : govt can get loans @ 2.7 % but refuses to do so as this would jeopardize large corporate interests such as developers.

    e) undermine ‘supply side’ and ‘starve the beast’ neo liberal economics – which seeks to create small govt to facilitate privatization of state services. Ie: deliberate starvation of health , welfare, education and other social services by under-funding at the expense of those least able to bear that burden.

    (i) this done deliberately by having a yearly shortfall of funding in budgets.

    (ii) rectified every few years to assuage fears by the public , – while creating competition among agencies for funding from ever decreasing tax return takes.

    The question we really need to ask ourselves when confronted by the bogey man of big business withdrawing capitol is :

    Do we really need them?

    The answer is not that complicated. Does India for example now need the East India Trading Company?

    Certainly not !!!

    So why do we still pander to corporate’s who care nothing for the well being of the citizens of this country?

    Why not turn the question around ?… why do we need them? what do they really do for us ? …. and if it is ‘ not a lot’… then perhaps it is time to make them question if doing business here is worth their while. And if it gets down to us calling their bluff – and that they can still make a profit here under the new terms above – I think you will find most wont pull out at all… but will become the meek servants of a revitalized social democracy.

    Lest we forget … that neo liberal supply side economics is subservient to a functioning and healthy social democracy – not the other way round. They can only exist as an opportunistic parasitic byproduct of the wealth created by social democracy. Once stripped of their enabling – they are forced to comply. Even their exploitation of the third world’s wages and natural resources fails when confronted by tariffs…

    Yes ..you can extract as much as you like but whether we are willing to trade your goods here is another matter- barring a levy put on.

    Sound like it wouldn’t work?

    Tell that to the American and Japanese farmers who don’t like the idea of the TTPA.

  5. Tiger Mountain says:

    good piece Sian

    it would be nice to see an obsession with low wages develop! (and a subsequent boost in union action to get money off employers rather than other taxpayers via WFF)

    housing should be accomodation or a family resource, not a cash cow, the Nats don’t want state housing or rent control for ideological reasons

  6. fatty says:

    Yes, and blaming the Chinese is just helping the rentiers to exploit us more.

    We need to rethink the ‘Kiwi Dream’ and stop this freedom to property nonsense. Build up, not out. The quarter-acre, pavalova paradise is dead. Less home owner rights and more renter rights. Let’s have property legislation that ensures nobody can get rich off it, and so there’s little profit to be made from renting. Investment properties should be illegal. Landlords have no right to exploit non-land owners. And nobody has the right to capital gains – not a cent.
    If people actually earned their capital gains (lol), then they can put that hard work into the real economy and actually produce something useful. But of course, as we know, nobody actually earns their capital gains, they stole it from the previous generation and they steal it from future generations. They’re lazy thieves.

    Call me a leftist, but private property is violence.

    Stop rentier capitalism, and stop blaming people from oversea. If we stop the overseas investors then the local exploiters thrive under the still existing rentier capitalism. But if we stop rentier capitalism, then the overseas investors will disappear.

  7. Mike the Lefty says:

    I don’t think it is really an obsession with owning “homes”, it is an obsession with owning “houses”.
    Most of the talk which goes on about “home ownership” is really about “house ownership”.
    There is a line in a song that goes “You can’t build a home with a hammer and nails”.
    Having a home involves some degree of emotional attachment.
    The National government is only interested in houses, little boxes made of ticky tacky (Pete Seger). Their property investor mates presently see nothing but dollar signs in front of their eyes as they fight and jostle to snap up what they can.
    Whether these buildings make good or even satisfactory homes is of totally no importance to these greedy shysters.

  8. save nz says:

    In my view the Kiwi obsession with property is from the Maori – the cultural values have rubbed off over generations to most NZer’s.

    Maori need to be part of the land and have stewardship over it. This has translated over time, to Pakeha and has become a part of the NZ identity.

    To me justifying becoming a tenant in your own country is not really something I think should be encouraged. NZ was a social democracy because we had homeownership, not the no one can own land but government like China socialism or the Gentry ownership model like the UK.

    NZ had very high ownership rates of 74% only 40 years ago, as well as top schooling, jobs and so forth.

    That vision is worth fighting for.

    • fatty says:

      “In my view the Kiwi obsession with property is from the Maori”

      How do you come to that conclusion? NZ’s cultural views on land use and land ownership steams from our Eurocentric colonial history – land to be divided up to serve capitalism, then the land plundered for its resources.

      Maori have a very different view of property. They never believed in individual ownership, it was instead to be looked after for the collective good.

      Home ownership does not equal social democracy, in fact, it’s the opposite. Social democracy would not be too bothered with home ownership. Social democracy embraces social housing and demands strict controls over private property. Social democracy doesn’t aim to end private property, but it promote social housing first, which is the opposite of home ownership.

      National have always promoted home ownership, even during our social democratic period, but that’s because National are right wing and they wanted to privatise housing. Home ownership is the privatisation of housing. National have been doing it for years and look where it’s gotten us. Any right-winger worth their salt knows that people who own homes become more capitalist.

      We can take all the befits of home ownership (security, belonging, strong communities etc) and deliver those benefits to renters. We just need strong renter’s rights and another social housing program (with state house for life as a guarantee). We did the latter after WWII and Germany etc have done the former. It’s easy, but we’re obsessed with home ownership, and that need to stop. We need to cut the balls of the rentiers.

      • save nz says:

        Well who do you think should own the land then? The government, Maori, Chinese or Australian investors and then we rent off them with strong renters rights?

        No one owns the land in China either, but not sure that is working for democracy or the environment.

        Most socialism is trying to make everyone middle class, not rich or poor and the population educated. Clearly under neoliberalism something has gone horribly wrong with super rich and super poor increasing and the middle class being decimated.

        • fatty says:

          “Well who do you think should own the land then? The government, Maori, Chinese or Australian investors and then we rent off them with strong renters rights?”

          I never said end private property. My (realistic) solutions are a mix of Germany’s rental policies today and NZ’s social housing polices from the 40s-70s.

          Why would overseas investors invest in NZ housing if there are very strict controls on it, and non-existent returns? We should discourage rentiers, whether they are from China, Australia, or living on our street. A leech is a leech, and I don’t care if that leech is Kiwi.

          “No one owns the land in China either, but not sure that is working for democracy or the environment.”

          I have no idea how this relates to anything I’ve said. Is this supposed to be red-baiting? That’s a strange response to a suggestion that clearly fits within capitalism (NZ policies from 1940-1970 & Germany’s policies today). If you’re concerned about the pollution in China, then tell the west (us) to stop our mass consumption.

          • save nz says:

            “Why would overseas investors invest in NZ housing if there are very strict controls on it, and non-existent returns? We should discourage rentiers, whether they are from China, Australia, or living on our street. A leech is a leech, and I don’t care if that leech is Kiwi.”

            What is happening in Auckland is that people are taking money out of their home countries and buying up real estate or assets and leaving them empty or doing it up and reselling it to other investors or migrants and building for them. The investors don’t care about the return – and the super rich leave their place empty because if there is a coup or what ever they can have multiple escapes planned or in the cheaper properties it is just money laundering or making money flipping the houses.

            It’s not just Auckland – London has been hit in the same way – the UK took money from offshore investors and onshore private developers thinking it would be invested locally and it’s all gone wrong, instead they have no where for locals to live, high prices that locals running London can’t afford, and a whole lot of empty properties and even car parks, registered in tax havens.

            You can have rent controls, but not if people are not renting the properties. The problem in both London and Auckland is that there is a shortage of rental properties and landlords, so you can put in all the rent controls you like, it will lead to less supply. And the supply is controlled by demand which is very high with 67,000 people coming into NZ last year alone. The world is a big place – we can decimate our cities with new housing but if the policy does not change then more migrants and investors like the above will fill the demand. It is so bad now, our greenfield and public spaces are turning into retirement villages owned by offshore interest and private owners who are looking to cash in on the aging population!

            As for private property, if individuals are not owning property as private ownership, is will be owned by the government or private owners or corporations. In my mind NZ has had a good mix of that in which previously 2/3 of Kiwis owned their own house, and the government had state houses i.e. social housing and a few private investors.

            • fatty says:

              “The investors don’t care about the return”

              lol. Ok.
              I don’t think you know how capitalists think and act.

              We can make it so that owning property gives no return, and from that capitalists will invest in something more useful, and then we can all have access to housing (as a right).

              Why are you always speaking out on behalf on NZ landlords and property leeches?