The housing crisis intensifies……government response hopelessly inadequate….”empty homes tax” is part of the answer

By
John Minto
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57
1376

The housing crisis drags on for tenants and families on low incomes while the government looks the other way.

And it’s getting a lot worse.

Figures released for November show a record 14,496 eligible tenants and families are on the waiting list for state houses with the vast majority “Priority A” applicants – those with the highest need.

The number has been rising steadily since Labour was elected – up almost threefold from 5844 just two years ago.

In November itself Housing New Zealand housed 567 tenants and families but a further 1649 were added to the waiting list.

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We are going backwards…

These numbers keep rising because private sector rents are going through the roof and are increasingly unaffordable for people on low and fixed incomes. To pretend the “housing market” is working these massive rents are being heavily subsidised by the government through an Accommodation Supplement subsidy for landlords costing taxpayers around $1.7 billion per year.

Labour says the reason the numbers on the state house waiting list are rising is because more people are applying for state housing as they are more likely to get the support they need under this government. This is true as far as it goes. National’s campaign of denigration against state house tenants helped discourage applications for state houses. (It’s also worth remembering that the Paula Bennett-led meth contamination fiasco cost taxpayers and tenants $120 million in wasted spending)

However, the government’s response to the desperate need is hopelessly inadequate.

State housing minister Chris Fa’afoi says Labour has built 3,300 new state houses and will have another 2,500 finished by the end of this year. NOTE: The current policy settings for building new state houses are precisely the same as they were for the previous National government.

These numbers do not begin the address the crisis. Remember we are going backwards…

A Capital Gains Tax would have helped reduced the speculator/investor demand for houses and would have reduced both house prices and rents but this has been abandoned by Labour without a fight.

Prime Minister Ardern is refusing to give any promises to struggling families or children living in poverty but she has given a cast iron guarantee to property investors and speculators that she will never put in place a capital gain tax.

Labour-friendly local government mayors are looking to try and take pressure off the government on housing. Christchurch Mayor Lianne Dalziel has finally agreed – after six years in the role – the council will rebuild the council rental stock destroyed in the earthquakes 10 years ago. This will mean at least another 400 units over the next three years.

Even Auckland Mayor Phil Goff feels the need to express concern about housing. He wants to incentivise property speculators to take on tenants to help fill the 40,000 (sic) empty homes in Auckland – a percentage of empty homes well above comparable cities overseas which do have a capital gains tax.

Many of these houses are being farmed for their capital gains without the landlord worrying about the hassle of having tenants dirty the carpets. Some are rented only over Summer as Airbnb accommodation. This trend is accelerating (empty homes in Auckland are up from 33,000 a few years back) because of Ardern’s tax backdown.

But Goff’s comments are just “thinking out loud” – there is no proposal, firm or otherwise. He just wants people to think he cares. It won’t go anywhere.

Aside from the desperate need to build tens of thousands of new state rental houses, the government should be looking at an Empty Homes Tax for Auckland similar to that applying in Vancouver Canada.

In Vancouver residential property owners submit an annual property tax declaration with the Empty Homes Tax set at 1% of the property value if the home has been unoccupied for more than four months of the previous year. Exemptions apply for houses being built or houses which are sold during the year.

The aim is not to collect tax – the aim is to require these houses be available for rent.

An Empty Homes Tax would mean large numbers of our tens of thousands of “ghost” homes would be available to rent at a time when homes are desperately needed.

More details of the Vancouver Empty Homes Tax are here.

57 COMMENTS

  1. As well as a demand problem due to mass immigration Ponzi’s here, we also have a major quality issue for housing here!

    Why construction in NZ is fucked and expensive!

    The Detail: New Zealand is still building leaky homes
    https://www.stuff.co.nz/national/the-detail/117617601/the-detail-new-zealands-leaky-homes-saga-is-a-long-way-from-sorted

    extract

    “According to journalist Peter Dyer, who has spent the past seven years researching the crisis and wrote the book Rottenomics*, we are still making the same mistakes. “Everyone I talk to says we are still building them.”

    As the building industry faces huge pressure to build more homes, with a lack of trained craftspeople, untested new products, imported labour and councils under extreme pressure, could we be heading for another similar disaster?

    Dyer says the leaky homes curse was the combination of several factors but at the root of it all was the economic/political revolution in 1984 and Rogernomics.

    “The idea that if you turn the business of government and industry to the private sector and get government out of the way, we’ll end up in a neo-liberal paradise where everything will be better quality and less expensive. Of course that didn’t happen, especially not in the building industry.”
    Not to mention structural issues. ”

    Concrete safety investigator ‘surprised nobody had been killed’
    https://www.rnz.co.nz/news/national/402908/concrete-safety-investigator-surprised-nobody-had-been-killed

    Multi-storey building flaws ‘almost the norm’
    https://www.rnz.co.nz/news/national/340396/multi-storey-building-flaws-almost-the-norm

    Apartment complex hit with $32.8m repair bill
    https://www.rnz.co.nz/news/national/331505/apartment-complex-hit-with-32-point-8m-repair-bill

    Council unable to identify possible defective buildings in capital
    https://www.rnz.co.nz/news/national/403417/council-unable-to-identify-possible-defective-buildings-in-capital

    • It’s all about the immigration ponzi scheme. Show me a country with high population growth and I’ll show you a housing crisis. Low or no population growth has so many benefits; economic, social, ecological only a fool want otherwise. We all are fools it and seems – including the Greens who have ditched the values of the Values party for their woke wonderland.

    • that why we must modernize the building industry and move to the factory model i think thats the direction the government is heading in

      • Well state homes used up the last of New Zealand’s hardwood so if you’re not using New Zealand wood as a base ingredient of State Housing then you haven’t read the ABC’s of Micheal Joseph Savage.

  2. You cannot force people to be landlords especially now they may need to spend a heap of money to bring them up to rentable standard. We know there is a problem so why dont he state check out these empty houses and if they are rentable offer to buy the. In the long run this would be cheaper than motel rooms or paying top ups which put the families into deeper debt.
    The council in Chch could not run a bath let alone more rental properties it is a waste of money as most of those that fit the renting criteria need extra social help. The state should be in care of all social housing.

    • Trevor Sennitt,

      “The state should be in care of all social housing”

      100%….which is why so many people strongly opposed the obscene sale of large numbers of state houses by the previous National Government. ..made all the more appalling by the fact that occurred at the same time the housing crisis was worsening.

      It’s my contention that immigration should be scaled right back until the housing crisis is resolved. As it stands, the progress being made with housing now is virtually negated by the ongoing tidal wave of immigration and refugees. This is more than ironic as Mr Minto would be at the head of the line bitching about wanting more immigrants and refugees. What would you prefer John? A Government attempting to resolve the housing crisis or a previous Government who were more interested in profiting from it and or denying there even was a housing crisis?

      • Remember, at the time is wasn’t a ‘housing crisis’, it was, according to John Key, a ‘housing challenge’. When the shit’s about to hit the fan and your most vulnerable citizens are on the receiving end of some fairly draconian treatment… resort to disingenuous euphemisms.

        National have no use for the poor, unemployed, low-wage worker or the disabled. They’re an unproductive drain on resources. They’d much rather they all went and died in a gutter somewhere.

    • Really Trev I thought you said the state should not be in the housing business that this should be left to the market, yet the market has failed hence why we had the GFC. Now you seem to be changing your tune, not that I don’t agree with you. I believe the state should always be the safety net but at the moment the net has big holes in it and so it needs repairing. So I believe we should have a mixture so the entire burden should not fall on the state alone. One thing for sure we can’t blame national entirely for the housing mess but it didn’t help matters that they sat back on their chuffs for 9 years at the same time increasing immigration further exacerbating the problem.

    • i think we will head in the direction of houseing assocations replaceing the current landlord model possible funded by pension funds

  3. The blog and the comments cover most of the problems, except for Jacindafan’s attempt to protect Jacinda from her flawed policy and actions. It is a terrible situation and is likely to cost this government the election. Kiwibuild was a disaster pretending to fix housing, catering to the well off who could afford other options, using state land for the private sector and diverting us from the need for a massive state housing building programme. Wake up Jacinda, good that you gave Phil the boot but you need to do much, much more to fix things. How can we believe you care for people when you muddle along not galvanized into sorting the problems?

    • over simplification i be-leave kiwi build will be success but how we go about building homes has to change it take time to get factory home builder up and running then there’s the property bubble must burst before we will see any dent in affordability on what planet is 9 times income affordable and we need the right kind of homes low maintenance home built to proven designs these mc mansions are useless also a return to strict credit and finance i think there is good reason to see the rise of housing associations funded by kiwi saver the idea of 30 year mortgages in a unstable job environment seem like a model from the past

    • Two separate issues, caring for people and sorting out Nationals housing crisis. If they loose the election because of nationals previous housing and immigration policies then people are very very short sited.

  4. When most of the comments seem largely in agreement of what is going wrong… you have to go back to history and think why can’t Labour get it’s policy right, if so many people with different views and backgrounds have a better handle on it than the policy makers?

    Answers can be gleaned by what happened in America with Trump. You see similarities in NZ with the woke taking on the so called marginalised groups (in their minds)…

    This article argues, ( based on the well named book “The New Class War: Saving Democracy from the Managerial Elite..”)

    “But the idea that Trump was put over the top by white nationalism is not what the vote totals show, Lind says, pointing to polling data that after 2010 shows that white progressives have moved far to the left of African and Latino Americans.

    “This is really being driven by elite whites, not by members of minority groups necessarily. They pose as saviors and champions of victimized groups and take a highly melodramatic view of politics.”

    https://www.theguardian.com/us-news/2020/feb/02/the-new-class-war-michael-lind-democrats-trump

    (I notice that the worst offenders of woke thinking, often fall into this category of managerial (often white) educated commentators who without any understanding of different groups take this role of (for example) migrant saviors and champions into the melodramatic…this is often highly emotional and by doing so create myths and discourses, while doing the opposite, aka making people most marginalised in NZ more marginalised aka Maori and Pacific Islanders and apparently the largest growing group in poverty is actually Pakeha home owning families on wages…

    It’s actually nuts to be promoting getting the worlds unskilled to borrow money come to NZ and take up housing and drive cars around and work crap jobs, or get another 10,000 income less people into NZ to go on benefits from around the world, but it’s become some sort of mantra for COL and many bloggers, they can not deviate from and thus they can never hope to solve the housing problem.

    Part of the

  5. Yes, an Empty Homes Tax would be a start.

    But it needs to go further. If the owner is not a Kiwi, is not living in Aotearoa and has not real wish or intention to move here to live in the near future, then really, they have no right to own that house! Not when there are so many homeless and desperately poor who are living here now.

  6. An empty homes tax could also be a very nice earner for city councils, lessening their dependence on income from rates.

    Let’s say there are 40,000 “ghost” homes in Auckland. If you (conservatively) value those homes at $1 million each, that’s $40 billion worth of empty homes. If you bring in an annual 1% empty homes levy, it has the potential to raise $400 million per annum (assuming none of those homes are sold back into the market to avoid the tax). That’s a lot a of money for Auckland Council every year!

    Now of course people will start whinging about paying the levy on their baches and holiday homes, but there’s a straightforward workaround for that too. The tax can be applied to urban areas only, by city councils, in exactly the same way Auckland Council currently collects its fuel tax. The revenue raised could even be ring-fenced for councils to build community housing, in the same way Auckland’s fuel tax is earmarked for roading and transport projects within the Auckland region.

  7. The so-called “left wing” government is happy to continue making the lives of the disabled, the poor, and the working poor worse. The attacks from WINZ continue; the “security guards” intimidating people continue; the absolutely appalling abuses by staff continue – things that absolutely no one, in _any_ job or any industry could get away with, other than working at WINZ; the sporadic cuts to benefits continue; the corruption within WINZ hierarchy continues; corruption within the police continues.

    Meanwhile the trickle of payment increases isn’t keeping up with the pace of increases of rents – and that’s for those of us lucky enough to have been able to obtain accommodation in the first place – no thanks to the useless Housing New Zealand of course, who appear to devote more resources to calling people to see if they can remove them from their waiting lists without providing housing, than they do to actually providing housing. Jacinda Ardern’s government will be remembered by history as a right-wing government, completely and utterly against even the most paltry left-leaning reform that could reduce the immense hardship faced by so many. What does the rest of New Zealand think? They’re busy celebrating their steady increases in stolen wealth.

  8. Yesterday on TradeMe, there was just one HOUSE in the whole of Canterbury available for between $350 and $400.

  9. Stuff article this arvo: Phil Gough has a plan, apparently, which he has discussed with the govt, “to make renting the homes to key workers easier and more attractive to owners, saying it could be a “win-win situation” that puts money in owners’ pockets and helps the community.

    “It was possible a new Crown entity could be formed to manage the rental of “tens of thousands” of otherwise empty homes.” thousands-of-aucklands-ghost-houses-could-be-filled-by-key-workers

    • Damn, I spelled Goff’s name wrongly, and have done so before.

      From that Stuff link: “On Census night 2018, there were more empty homes that ever before.”
      A graph that’s there shows it more clearly.

      Goff: “We’re talking [about renting to] teachers, nurses, police officers, the sort of people who might want to rent for a relatively short period of time while they get themselves on their feet.”

      • Yes, but I notice they did not priorities those folks (teachers, police, nurses) for Kiwibuild housing…it was all market driven and not about renting but selling state house land into private ownership. Also you did not have to be a citizen to buy the houses.

    • That Stuff page has a brief vid of Goff being driven through Mt Smart tunnel by rally driver champ Hayden Paddon, …smoke everywhere and a strange look on Goff’s face.

      Back on topic, the vid that follows this (at the moment) is about a rent freeze that has been enacted in Berlin. Berlin City Council has voted to freeze rent prices for the next five years.

      If they can do it, surely we can too?? In Auckland, at least.

  10. Yes lets penalise landlords many of whom are hard working mums and dads for saving enough to have property. Lets make them pay for not wanting a valuable property tarnished by possibly careless tenants, lets make them pay for governmental incompetence in not maintaining state housing. And lets make them pay for the tribalists who keep voting Labour and National thinking things that have consistently failed to change will somehow magically change the next time they vote for “more of the same”.

      • I wonder if voters really care what Goff thinks if the voting turn out is anything to go by? Here’s my solution:

        (1) Ban all foreign ownership of NZ land and property.
        (2) Severely restrict immigration to “essential skills” only.
        (3) Increase taxes for large corporations.
        (4) Prevent large corporations from off shoring vast profits. China does this by the way.
        (5) Make it easier to import construction materials by reducing levies and tariffs.
        (6) Make it easier to import prefab and pre built houses from off shore.
        (7) Ensure Councils work with aforementioned to make this process easier and affordable.

        This would fix all the issues in time but of course this requires hard work and effort. Yet to see much of that from this from govt in NZ over the last 30+ years.

      • Most of the ghost house are probably not able to be rented due to the gold standard rental standards. That is part of the problem.

        If the government allowed any house to be rented and let the tenants decide what they would prefer, (aka an unrenovated house vs homeless or 1 room hotel for $1200 /w) then it would free up more rentals.

        Most of the housing stock of NZ is 50+ years old – so renovating them to the new rental standards is costing thousands of dollars that have to come from somewhere.

        The new houses being build are often million dollar houses and up for sale not rent.

  12. Janio,

    “How can we believe you care for people when you muddle along not galvanized into sorting the problems?”

    Anyone who asks that question to Ardern of all people is clearly residing in a parallel universe. One of the main reasons she is so popular with so many people is due to the unmistakable and genuine empathy she has toward people. Her M.O is people first, everything else a distant second. National on the other hand are $$$$$ and profits first, second, third. People barely get a look in, especially if you’re the annoying despised enemy. Those who fall into that category are the people not doing so well that are very unlikely to ever vote National.

Comments are closed.