There is a class war against renters that no one wants to acknowledge or admit…
Property investors rake in $500 billion over 30 years
New Zealand property investors have made $511 billion since 1991, one economist has estimated.
Ed McKnight, of Opes Partners, calculated the gains by using the Reserve Bank’s estimated value of housing stock, adjusted by Stats NZ’s home ownership rates.
Over 30 years, the combined value of New Zealand residential property increased by $1.5 trillion, of which investors benefited from about a third.
…Three points raised by Bernard Hickey this week that are worth noting:
1: Chris Penk is set to roll back building standards for insulation that had only just been put in place, and which had been estimated to save 40% from power costs, after builders told him it increased building costs.
2: Real estate agents make commissions annually of about $1.6 billion. We really do have an economy that is a housing market with bits tacked on.
3: Community groups say the housing crisis is creating the worst homelessness they’ve ever seen.
So Penk will allow builders to build cheap freezing homes that will cost us more in power costs and decimate our attempts at cutting back on our emissions while the real estate pimps who funded this Government continue to gloss over the truth of homelessness in our nation!
We have an unelected technocrat crashing the economy so the wealthy can afford their mortgages while throwing 50 000 beneficiaries, including those with disabilities and drug addictions, off welfare by punishing them for missing one phone call from their spiteful WINZ handler while indexing their welfare lower meaning the poorest amongst us will miss out on over $600million over 4 years!
Tell me there isn’t a class war happening right now in NZ?
Chris Bishop has boasted all week that he’s kicking more state tenants out onto the street, but can’t tell anyone where all the tenants he has just kicked out will now live and if he’s made any children homeless.
How is that anything other than a revenge policy rather than social policy?
Chris Penk becomes Mr Freeze while Chris ‘Joker’ Bishop mutilates public housing for a sprawl of Gotham ghettos...
Last Thursday, Housing Minister Chris Bishop announced radical new plans to deregulate property development in New Zealand. He’s won praise for his efforts from across the political spectrum, including those on the political left and millennials who think Bishop is bravely fighting for the victims of the housing affordability crisis.
However, there are also signs that his deregulation will do little for housing affordability yet produce inferior housing and create all sorts of negative impacts on the urban environment. Instead of deregulating for “moral” reasons of combating housing affordability, it looks like Bishop and his government are simply implementing the demands of the powerful property development industry, especially those that have donated generously to the parties now in power.
Bishop’s “Going for Housing Growth” plan
The Minister of Housing has announced that he will enable property developers to “flood the market” with houses. And he’ll do this by reducing restrictions on where and how developers can build homes and commercial property. Council regulations and building codes created by communities and urban planners are being thrown on the bonfire. Bishop says he’s doing this because he wants cities to expand upwards and outwards.
According to Luke Malpass, the political editor of The Post, this is a radical and free-market programme being launched. Writing over the weekend, he explains that Bishop is taking power away from urban and town planners and giving it to the market. It’s all about the freedom of property builders and buyers to choose what they want.
Malpass correctly suggests that Bishop’s announcement is radically rightwing: “parts of his speech could have been from Milton Friedman’s famous 1980s book, Free to Choose. Choice is key, and casting away the impediments and bottlenecks to development is the name of the game. Consumers will ultimately decide the rest and developers will reflect those choices.”
Whether this results in urban sprawl and the conversion of farmland into suburbia should be left to “the market.” According to Malpass, Bishopbelieves that “if people want to live on city fringes in a cheaper, bigger house, with a bigger commute, that’s up to them.”
Similarly, the Herald’s Thomas Coughlan says the deregulation in housing and land use is comparable to the neoliberal reforms of the Fourth Labour Government: “In quite typical New Zealand fashion, and again reminiscent of the 1980s in the space of four years, we have gone from having some of the world’s most restrictive urban land markets to having some of the least. The Economist, an enthusiastic cheerleader of our 1980s reforms, has written warmly of New Zealand’s efforts to improve housing affordability through deregulation.”
Reflecting on Bishop’s speech and the generally positive response, Coughlan says there is now a bi-partisanship consensus in favour of property development deregulation: “Everyone has compromised. The left has had to embrace free-market thinking as a pathway to reducing the social ills of the housing crisis, the right has had to give up on its ability to control picturesque urban environments and to use the family home as a neverending stream of unearned wealth.”
…I think Kiwis are so shellshocked by the economy and the hard right romper stomper agenda that no one has understood the true scale of what Bishop has done here…
What Bishop’s deregulation means in practice
The idea of building much more housing, much more quickly, is incredibly attractive given the ill effects of the current housing affordability crisis. Yet the details of Bishop’s programme suggest that this will also have a number of highly detrimental impacts.
Urban sprawl is the most obvious. Bishop is taking away the ability of councils to impose urban-rural boundaries, which will open massive amounts of greenfields on the city fringes to be built upon, probably in a sprawling fashion. As Auckland Mayor Wayne Brown said this week, this will result in the loss of highly productive land for agriculture and at the “detriment of our unique landscapes, waterways, and harbours.” The impact on freshwater and ecosystems could also be severe.
Densification of urban areas will also now occur with fewer regulations for property developers and landlords. He’s allowing developers to build much tinier apartments without balconies. Bishop is selling this with reference to the stylish types of apartments in cities like Paris and Rome. And anyone who opposes this, Bishopsuggests, is essentially favouring that people live in cars and emergency motels instead.
Although the property industry has responded extremely positively to all this axing of red tape, a few have been breaking ranks. For example, Christchurch property developer Vincent Holloway went on RNZ’s Morning Report on Friday to say that “the government’s changes were turning the situation into more of a free market for developers” in which developers could “build anything and let the market decide what it wants”.
Holloway expected the results would be very negative—ghettos, “shoe-box” apartments, and ugly buildings in the city centre. According to RNZ, he said typical apartments would “have tiny awning windows in apartment blocks stuck in the shade.” He also predicted that cities would have trouble accommodating the levels of stormwater created by this approach, leading to more flooding.
Similarly, developer David Whitburn, from Auckland’s Whitburn Group, told The Post that Bishop’s deregulation would lead to a disastrous housing situation in which vulnerable people would live in ghettos. He said Bishop’s policy would be a disaster: “there are many developers who are only interested in money. So they won’t apply good design principles to create good living spaces… It will be all about how many apartments can be squeezed in, and that will create some nasty, but more affordable accommodation.”
Urban housing commentator and activist Jane O’Loughlin also told The Post that Wellington was also likely to suffer from Bishop’s enabling of property developers to do what they wanted: “The idea that developers are there to create good quality, affordable housing for the population is a bit of a fantasy. Really, they’re there to make money… It’s not going to achieve a good city.”
The policy is also likely to stretch infrastructure in cities and towns everywhere. The lack of investment in roads, freshwater supply, schools, and sewage will create further problems.
Bishop has said that he will deal with infrastructure issues later this year. At this stage, the government will also be implementing some similarly radical and free-market reforms, which will alleviate costs from property developers and put them back onto future citizens.
…let’s not forget that the Real Estate Pimps are all behind this…
Bishop’s relationship with property developers
It’s no coincidence that the Minister of Housing made his housing deregulation announcements to the Real Estate Institute of New Zealand last week. The property industry’s owners stand to benefit the most from these reforms.
Some have, therefore, suggested that property developers have been lobbying for these reforms. Writing on X, sociologist Peter Davis posted his analysis of Bishop’s programme: “Auckland urban sprawl here we come. With weakening of urban limits, reducing council powers, & removing medium-density, this is just what the developers who donated were looking for. Big capital gains to be made, long commutes, farm land appropriated.”
Before Bishop‘s announcement, National Party insider Matthew Hooton also wrote in the Herald that the Minister is “obsessed” with enabling property development. He points out that Bishop’s official reason for enabling property developers is a “moral” one – to solve the housing crisis. But he points to two more robust explanations for Bishop’s obsession.
First, it’s to keep house prices from getting further out of control as record-high immigration shifts into the country. Hooton says that the “Government’s commitment to keep immigration high” for economic growth means that new houses are required. He says, “The only reason we need new houses – and the only reason we’ve ever needed them this century – is to accommodate new immigrants.”
Second, it’s because “Bishop’s new houses are great news for property developers, construction companies and tradies”. Hooton points out that “Bishop has long advocated for Winton Land’s Sunfield development to house 15,000 people in cheap homes on the edge of South Auckland.” Therefore, Bishop is entirely friendly with the industry and keen to carry out the policies that will help them do more business.
Similarly, during last year’s election campaign, Hooton argued in the Herald that National’s housing policies had been created “with the help of lobbyists” for “the property-development industries”.
Incidentally, corporate lobbyist Georgina Stylianou has been one of the most ecstatic cheerleaders for Bishop’s deregulation this week. The former National Beehive staffer, turned lobbyist, now writes a politics column for The Post, and this week, she used it to praise the reforms in an opinion piece titled “How Chris Bishop has got it right with his housing plans”. She argued that the Minister is being driven by “his progressive values”, and she paints the reforms as a socialist triumph that the poor and homeless should be celebrating.
Taking on the idea that Bishop’s policies could be mistakenly seen as “the scrum being screwed towards property developers”, Stylianou suggests that instead, the reforms are simply about getting things done. She calls for Labour to adopt National’s property developer policies rather than oppose them, suggesting that Labour should tack on progressive elements rather than try to overturn them.
Donations to the Government parties from the property industry
The idea that property developers are driving the National-led Government’s housing programme is backed up by looking at who’s been donated to the parties in power. Those in the housing industry feature prominently in the three parties’ donor lists.
At the top of the list is a $500,000 donation from Warren Lewis to National last year. Lewis owns FMI Building Innovations, a “building systems and materials supplier.” National says it is the largest donation the party has ever received.
Property developer Trevor Farmer has given National $200,000 over the last few years. In the same period, he’s donated $215,000 to Act and $50,000 to NZ First. His business partner, Mark Wyborn, has given National $100,000 over the last couple of years, $200,000 to NZ First in 2023, and $50,000 to Act in 2021. And NZ First received $145,000 last year from Wellington property developer Vlad Barbalich.
One of the largest private developers in New Zealand, Manson TCLM, is partly owned by Culum Manson, who gave $70,000 to National in 2023. And Christchurch property investor Philip Carter donated $59,500 to National.
John and Michael Chow (“The Chow Brothers”) have also become big property players, partly due to their partnership with John and Max Key in recent years. In 2022, their family company, Stonewood Group, donated $44,000 to National.
Progressive Auckland housing developer Ockham Residential is involved in donations to parties. Last year, just before National came to power, the company’s Chief Executive, William Deihl, gave $20,500 to National (which followed on from owner Mark Todd donating $50,000 to Labour and $20,000 to the Greens).
The most interesting housing donations to National have been related to the Winton Land property group, of which lobbyist and former National Finance Minister Steven Joyce is a director.
In May 2022, the party received $52,000 from Speargrass, a holding company owned by Winton’s CEO, Chris Meehan. Then, in 2023, Meehan donated $103,260 to National and $50,000 to Act.
After the National received its first donation, Bishop, the party’s Housing spokesperson, put out a press release backing the Winton company in their fight with state housing agency Kāinga Ora. The company was taking legal action against Kāinga Ora, claiming more than $138 million because the government agency had rejected a request by Winton to help fast-track their “Sunfield” development plans in South Auckland projects using special powers under the Urban Development Act.
Of course, now Bishop is in charge of Kāinga Ora, and has ordered the agency to stop constructing more state houses. Meanwhile the Minister appears to be doing everything he can to supercharge the private sector to build houses for profit.
There’s more than symbolism here. Property developers like Winton are clearly the winners in a new deregulated housing market in which corporate lobbying and political donations appear to strongly influence public policy.
…the scale of hard right privatisation and the real east pimps paying for policy should stun and enrage Kiwis because we have voted in a property speculators paradise of urban sprawl and ghettos at our collective expense.
Just be careful with figures. The economist says the VALUE has gone up by $1.5T over 30 years. With respect, that is the on paper inflation of VALUE. Not actualization of INCOME received. No investor received any INCOME unless they BOUGHT and SOLD in this market. At any point in the 30 years the SOLD and BUY price are pretty close together, one buys and sells in the same market. TURNOVER in a narrow band of TIME does not produce as much INCOME as is being suggested.
Unless ALL real estate was sold tomorrow, there is no increased INCOME to be derived from the VALUE to be received by the owners (occupiers or investors — unless like me they have become a PAPER millionaire by “land banking” the real estate currently occupied).
It is a classic example where the call for TAX THE RICH falls down as a workable scheme. For to tax the rich you need real estate (for that is where a large percentage of wealth is stored) as high as possible to gain the most tax. Means the state does will not want to do anything to lower the VALUE and everything to increase the VOLUME for real estate (immigration).
If you want the VALUE of real estate to come down the last thing you want is to bring in a wealth tax. You will end up with a tax take reduction (hoping the WEALTH owner had the CASHFLOW to pay the tax — but that is another kettle of fish altogether).
To lower the price of a new build the state could banish private enterprise from building them and could banish the occupiers or investors from owning them. Not sure if that would either reduce the COST of housing or the VALUE. Is that an election winner or even able to be enacted for the state to fund and actually build (remember the success of the “100,000 new homes over 10 years” election pledge just six years ago?).
How quick we forget that the 1930’s state housing boom was funded by the state (borrowed money) but built be private enterprise (Fletchers started as a two brothers building state houses enterprise to grow to the monolith it is today).
How much health services do you want to cut to keep taxes down Gerrit?
Remember, your mates in National cut taxes for over 30 years leading to the closure of scores of schools and hospitals, and the downsizing of the state housing portfolios, mainly into the hands of private landlords who rents them out at up to 90% of household income. Strange how people like you dont seem to mind landlords financially breaking their tenants with excessive rent increases.
WOW, completely different tangent. I don’t have mates in any political party. ALL of them are leaches on society. We simply pick one not as bad as the other. Bit like people will hold their nose and vote Trump for Biden stinks even higher). We should have term limits (8 years max), no list MP’s no political parties. Only need 60 of the smartest people to run the country. Every two years we vote for 30 replacements to ensure continuity. Our representatives elect the heads of departments to keep the PMC doing the electors desires.
Please explain how a wealth tax will work and how you will set valuations on everything, every year? The tax required to pay for that government department plus arbitration court will eat up more taxes that could be spend in the health service.
We either have a wealth tax, or US style healthcare.
I dont know about you, but I dont want to be thousands of dollars in debt because of an emergency room visit. Rich pricks like you have had it way too good, for way too long.
You write a lot to push your agenda but neglect to mention that hause prices compared to average wages are many multiples worse now than in the 1960s. Local and central government policies have caused that imbalance so it is only selfishness on your part to expect to retain the financial gain without contributing to government costs. There is reliable evidence to show that if the amount spent inflating house prices had been invested in productive industry instead we would have a better society with a more even distribution of wealth however it is people like you who want a big share of a small pot who prevent the development of a system where we get a fairer share of a bigger pot.
Fraud and corruption, it’s the National party way…
https://www.stuff.co.nz/nz-news/350343305/national-party-figure-duped-couple-out-125k
Given the increase in value of housing stock, how much better shape would the governments books be if Douglas and Richardson hadn’t sold thousands of State Houses. Real Estate turned out to be the best investment in NZ during the last 30 years and Douglas and Richardson turned out to be the dumbest investors in NZ in the last 30 years.
Douglas never sold any state houses. In fact, the state housing stock expanded under the 4th Labour government, along with the welfare state. It only turned to shit after 1990.
Of cause state houses would need to be built by private companies as they always have .Huge savings could be made by the government buying materials in bulk at good discounts .We could stop selling logs for a year and turn them into timber to be used right here in NZ .tHE LAST GOVERNMENT TRAINED 100K NEW TRADIES SO WE WILL NOW HAVE ENOUGH TO BUILD THOUSANDS OF NEW HOMES QUICKLY .tHE CONSTRUCTION INDUSTRY IS SCREAMING OUT FOR WORK SO THE GOVERNMENT COULD SET THE PRICE THEY ARE GOING TO PAY FOR THE NEXT 3 YEARS AND GET PIPES IN THE GROUND .
Regarding insulation standards, typical of Labour, they applied an overegged standard that might well apply to Twizel but made zero sense in Whangaroa. They just can’t help themselves when it comes to poking their snouts into people’s private business.
What definitely does make sense is letting owners decide how much insulation they want and then paying for it. If it’s going to give them a return in the form of lower power bills, then they will surely be prepared to pay for it. The level of insulation is recorded in LIM reports, so if it adversely affects the future resale value they will surely be prepared to invest in a little extra insulation.
remember the national party leaking homes that are still delivering today ?dumb arse .I would rather have a warm house any where in NZ than a leaking uninsulated house .Also insulated houses stay cooler in summer if they are well ventelated .The reason they heat up is because people dont open windows .
Having worked at all levels of the residential building industry for over 40 years i would have to say that that is by far and away the dumbest comment i have ever read on this subject …only rivalled by Penk’s ridiculous false statements !!
How can people be so stupid , so ill informed , so lacking in any critical thinking? One of life’s mysteries!
Is that you Mike Hosking? If not I didn’t know New Zealand had two experts on well, everything.
To you and Yeti regarding building standards typical of Nationals leaky buildings scandal. We are repeating their horrid mistakes by removing building regulations so their donors can make more money.
Andrew it looks George Costanza has a challenger for the title ‘Lord of the Idiots’.
Chris Penks added cost figure that he bandied about halved within days after scrutiny. This current National mob excel in talking bullshit.
Labour and Kiwibuild was so successful too
Given that they were batting a real-estate/ building supply and build industry dominated by conservative political supporters is it any surprise that it never delivered? I know of thousands of leaky homes due to Nationals last failure with building regulations but there are very few people losing financially after Kiwibuild.
Actually relative to the previous administrations it still delivered way more houses. It certainly didn’t deliver relative to what was promised.
I see the condo builders in Canada cant sell what they have built because people dont want to live in a dog kennel .And their kennels are way bigger than the ones the buffoon wants us to live in here .
Yeti lives in a cave so anything is bigger although probably leaky like Nationals house builds.
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