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.
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.