EXCLUSIVE: State house sell-off in Tauranga unravelling?
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State Houses – “Wrong place/wrong size”?
Last year (2015), National confirmed it’s intention to sell-off thousands of state houses to “community groups”;
Hundreds of state houses in Tauranga and Invercargill could be sold to independent providers in the first phase of the Government’s plans.
In January Prime Minister John Key announced that state house reforms would see up to 2000 state homes sold to “community housing providers” this year, as it cuts the number of state houses it owns by 8000 over three years.
Although the Government was marketing the process as “transfer” the houses would be sold to community groups, generally charity based providers. Because the houses would have to be kept as social housing rather than private sales, the houses were expected to be sold at a discount to the market value.
After nationwide consultation, Housing New Zealand Minister Bill English and Social Housing Minister Paula Bennett said that the first sales were likely to take place in Invercargill and Tauranga.
In a blogpost in November last year, I pointed out the oft-repeated phrase used by our esteemed dear Leader and various Ministers;
Various ministers, including our esteemed Dear Leader, have indicated that up to “a third” of state houses are “in the wrong place or wrong size (or ‘type’)”.
The “wrong size/wrong place” claim is the argument used by National to advance a major sell-off of Housing NZ properties.
On 1 November, 2014, Social Housing Minister Paula Bennett said on TV3’s ‘The Nation’,
“It’s about being smart in what we’re doing. So you just look at us having the wrong houses, in the wrong place, of the wrong size..”
On 2 December, 2014, the Minister responsible for Housing NZ, Bill English expressed his agreement with the proposition of one third of Housing NZ homes being in the “wrong size/wrong place” ;“Yes. As recently as just last month Housing New Zealand issued a press release that said: ‘around one third of our housing stock is in the wrong place, wrong configuration or is mismatched with future demand’.
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… in fact, a third of them are the wrong size, in the wrong place, and in poor condition.”
On 28 January this year, John Key announced in his “state of the nation” speech;
“Around a third of Housing New Zealand properties are in the wrong place, or are the wrong type to meet existing and future demand.”
After lodging an OIA request with relevant Ministers late last year information released under the Act suggests that National’s oft-repeated claim that around “one third” ( or 22,000) of state houses are in the “wrong place and wrong size” was not wholly supported by Housing NZ’s own figures. As I reported last November;
Housing NZ currently “manages 67,245 homes” (as at 30 June 2015). When Key, and other National ministers refer to “around a third of Housing NZ properties”, simple arithmetic translates that fraction into 22,190 homes being the “wrong size/wrong place” .
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In a response eventually received on 29 October 2015, information in the form of a chart -“Stock reconciliation taking into account impaired properties as at 31 January 2013” – was attached;
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In two columns headed “Right Place, wrong home” and “Wrong Place“, the respective figures add up to 13,560. This constitutes a little over half of the “22,000” that is being bandied about by National.
Like much of National’s “facts”, the numbers did not stack up.
Which led to the last question I put to the Minister; “If HNZ houses that are in the “wrong place” are sold/given away to community organisations – what will make those houses suddenly become in the “right place”?”
Because if it’s in the “wrong place” when owned by Housing NZ – why would it suddenly be in the “right place” owned by someone else?
The Minister’s response was baffling. In his 29 October 2015 letter to me he said;
“The Government has no plans to offer Housing New Zealand properties that have been
identified as being in the ‘wrong place’ to community housing providers. In Tauranga and
Invercargill for example, the areas identified for initial potential transfers of social
housing properties from Housing New Zealand to community housing providers, MSD’s purchasing
intentions anticipate stable demand. Following a transfer, any new provider would receive
both the properties and a contract with MSD to continue to provide social housing.”
[See full text of letter here]
English’s response seemed to cast a distinction between State housing “in the wrong place/size” and properties to be sold/transferred to community organisations.
Yet, his statement above would appear to contradict a statement issued by English and Bennett earlier on 6 May last year, which is explained further below under the heading, “The Great Invercargill and Tauranga Sell-Off”.
See: State houses – “wrong place, wrong size”?
State Houses, “Wrong place/wrong size”? – Up-date
English’s responses to my questions were vague and offered little in the way of specific detail. In a follow-up letter to the Minister, I repeated two of my questions;
I refer you to two questions which you have not answered in my OIA request;
4. Where are they situated that are considered the “wrong place”?
5. How many areas have been designated “wrong places”?
His response arrived too late to be included in my November 2015 blogpost, but is still highly relevant to the growing housing crisis in this country. On 9 December 2015, English said;
“The analysis produced by Housing New Zealand in 2013 and provided to you with my previous response [see table here – FM] identifies the number of houses as being in the wrong place on a regional basis. No specific locations have been designated ‘wrong places’ and, based on this analysis, each region has some properties assessed as being in the wrong place. These will generally be in provincial areas away from the main centres.”
[See full text of letter here]
In none of the Minister’s correspondence was he able to provide specifics as to where State houses were in the “wrong place”. The ‘best’ he could do was list five regions; Auckland East & South; Auckland North West & Central; South Island, Central North Island, and Lower North Island.
Surprisingly, Auckland was deemed to have 8,180 houses that are supposedly “Right Place, wrong home” and a further 420 that are in the “Wrong Place” – 8,600 in total.
However, the Minister’s data was contradicted by the 2014/15 Housing NZ Annual Report which confirmed the on-going high demand for housing in Auckland;
“Across the country we also have too many three-
bedroom properties, while demand has grown for smaller
one- or two-bedroom homes or for much bigger homes.
Demand for homes in the Auckland region is high and
more Housing New Zealand homes are needed.” (p22)
English did, however, point out that “these will generally be in provincial areas away from the main centres“.
Even that has proven to be a mis-leading assertion from the Minister. Tauranga is certainly a “main centre” by most definitions, and the choice of that city would prove to be embarrassing to National, as the next chapter below showed.
The Great Invercargill and Tauranga Sell-Off
As National began to roll out it’s sale of State houses, Bill English specifically referred to State houses being sold in Tauranga and Invercargill. On 6 May last year, Bennett and English released this statement;
“This is another important step to creating a more effective and efficient social housing sector with more housing providers supporting tenants and their needs.” – Housing New Zealand Minister Bill English.
As announced by the Prime Minister in January, the Government’s Social Housing Reform Programme includes plans to transfer 1000 – 2000 HNZC houses to registered CHPs over the next year.
“We’ve gone through a robust process to identify the first areas for potential transactions. Tauranga and Invercargill have been chosen because they have stable demand for social housing, and active community housing providers keen to consider the next steps. Providers in other regions are also interested.” – Social Housing Minister Paula Bennett
The same media statement referenced;
The Social Housing Reform Programme (SHRP) is designed to get more people in need into quality social housing – either through Housing New Zealand Corporation (HNZC) or registered Community Housing Providers (CHPs). The objectives of the Social Housing Reform Programme are to:
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[…]
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Ensure social housing is the right design and size and is in the right places for people who need it.
English and Bennett continued to exploit the “wrong size/wrong place” spin that National was using to disguise the privatisation of State housing.
Bear in mind English’s statement in his 29 October 2015 letter to me, where he said;
“The Government has no plans to offer Housing New Zealand properties that have been
identified as being in the ‘wrong place’ to community housing providers. In Tauranga and
Invercargill for example, the areas identified for initial potential transfers of social
housing properties from Housing New Zealand to community housing providers, MSD’s purchasing
intentions anticipate stable demand. Following a transfer, any new provider would receive
both the properties and a contract with MSD to continue to provide social housing.”
Obviously the Ministers find it difficult to keep their “story” straight.
In March this year, potential buyers for State houses in Tauranga and Invercargill had been lined up;
Four potential buyers have made the final shortlist to buy over 1400 state houses being sold in Tauranga and Invercargill.
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In Tauranga, Accessible Properties, Hapori Connect Tauranga, and Kaiana Community Housing Partners made the shortlist to take over 1124 properties or tenancies.
However, even as National’s English and Bennett were prepping State houses for sale, the country’s housing crisis began to be reported elsewhere throughout New Zealand.
Tauranga was one of them;
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People resorting to living in camping sites and caravan parks?
Is that what this country has come to after thirty years of neo-liberal “reforms”? To become a South Pacific version of America’s trailer-park “communities”?
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If, by shuffling ownership of State houses from Housing NZ to “community groups”, National believes it will solve our housing crisis and growing homelessness – they are far more out of touch than I ever thought possible.
This is not just a stubborn pursuit of a free market dogma that has failed to meet basic social needs – this is pseudo-religious self-delusional behaviour from our elected representatives. English, Key, Bennett, Smith, et al, appear to be paralysed into inaction, like possums caught in the headlights of an approaching truck.
Nowhere is this better illustrated than Social Housing Minister Paula Bennett floundering around like a beached cetacean. She first denied that a housing crisis existed in New Zealand on 20 May;
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Five days later, she was willing to bribe homeless and State housing tenants up to $5,000 to quit Auckland, making a sudden announcement that caught Finance Minister Bill English off-guard;
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I have said it before and will repeat my conclusions that National is incapable of resolving this crisis. Considerable State intervention is required, and that is anathema to a political party whose very DNA is based on the free market; reducing State involvement in commercial and social activities; and promoting private good over community benefit.
It will take a collective anger from New Zealanders to take notice of what is happening in their own society. At the moment, so many New Zealanders seem insulated from the growing social problems that are worsening with each passing day.
As Shamubeel Eaqub said on Radio NZ’s Checkpoint, on 26 May, there is an absence of empathy amongst many New Zealanders – a moral-disconnect with the poor; the homeless; those who have been left behind after thirty years of failed neo-liberal theory.
Remarkably, Eaqub invoked the name of Michael Savage, when New Zealanders were capable of building and solving social ills. For an economist, Eaqub has deep insight where we have arrived in the year 2016;
“The only thing that’s missing now is aspiration and leadership,” he said.
Perhaps our economist friend has nailed the problem perfectly; 21st century New Zealand is not just suffering from economic poverty. There is a poverty much, much worse.
A poverty of spirit.
And that affects us all, regardless of wealth and income.
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References
Fairfax media: Invercargill and Tauranga chosen for first state house sales
TV3: The Nation – Social Housing Minister Paula Bennett
Parliament: 6. State Housing—Suitability of Housing Stock
Fairfax media: John Key Speech – Next steps in social housing
Letter from Bill English, 9 December 2015
Housing NZ: 2014/15 Annual Report
Beehive.govt.nz: Next steps in social housing reform announced
Fairfax media: Invercargill state houses may survive sell-off as Government reveals short-list
Radio NZ: Housing situation critical – Tauranga principal
Sunlive: Tauranga gripped by housing crisis
TVNZ News: Housing crisis hits Tauranga, forcing families into garages and cars
Bay of Plenty Times: Community leaders, social agencies call for urgency on ‘housing crisis’
Bay of Plenty Times: People living in caravan parks while waiting for a rental
Bay of Plenty Times: Campsites for emergency housing debate
Radio NZ: No housing crisis in NZ – Paula Bennett
Interest.co.nz: Paula Bennett announces plan to offer $5,000 to homeless Aucklanders
Radio NZ: Airport CEO, health leader & economist look at the Budget
Additional
Dominion Post: Housing MPs cost taxpayers more
Treasury: Social Housing Transactions
Other bloggers
The Daily Blog: Paula Bennett blindsides her own Finance Minister in desperate scramble to respond to housing crisis
The Standard: Newshub poll – Key’s government has failed on housing
The Standard: Bennett’s housing “announcement” is a re-announcement and a lie
Previous related blogposts
Can we do it? Bloody oath we can!
State houses – “wrong place, wrong size”?
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= fs =
The whole premise of state houses being in the “wrong place wrong size” was built on a lie.
How can state housing be in the “wrong place wrong size” whwen homelessness is rampant throughout the country??
This was a cunning dodge to justify privatization of state housing and English’s inability to specifically point to where these houses were located is indicative of his dishonesty.
Moreover, the current budget exacerbates the crisis.
Congratulations, fellow New Zealanders. We don’t need terrorists to destroy our way of life, we do it very nicely to ourselves.
The whole neoliberal agenda was built on lies Priss – trickle-down theory.
Selling off assets like Power Companies to “mum and dad investors” was another lie, Power companies actually brought money into the consolidated fund to address social, educational and health issues.
Rampant immigration and housing speculation makes those with houses asset rich. The lie is that this housing bubble will continue.
Savage. We need another Savage, or a Bernie Sanders, or Jeremy Corbyn. Someone with a social conscience, not some money broker widening the wealth gap and not giving a toss about the poor.
“…the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; those who are in the shadows of life; the sick, the needy and the handicapped.” – Last Speech of Hubert H. Humphrey
“A nation’s greatness is measured by how it treats its weakest members.” – Mahatma Ghandi
“Any society, any nation, is judged on the basis of how it treats its weakest members — the last, the least, the littlest.”
– Cardinal Roger Mahony, In a 1998 letter, Creating a Culture of Life
http://forums.philosophyforums.com/threads/who-said-this-42546.html
Well described Frank.
There is no barrier to lowering immigration demands, speculator demands for housing and curbing /stopping transnational investors and their agents buying up properties.
There are artificial barriers manufactured to allow a dogma driven ideology to support the wealthy and corporate investors to control property and milk NZ with an unrestrained market opened to promote such anti citizen activity.
Shaming NACT is a clumsy ineffective approach if not accompanied with more direct and effective action.
Incrementalism is not effective in this situation.
Unsurprisingly the countries that decided to allow the ‘free market’ and foreign ‘investment’ into their property markets are all facing the same problems.Neoliberal globalism does not work.
Disagree it is caused by a “poverty of spirit”. But pretending the housing crisis just ‘happened’ by itself is just as baffling. At least try to be honest about what has caused the housing crisis, record immigration and the idea of foreign investment driving property development instead of Government effort and keeping wages at liveable levels.
London is full of the effects of their ‘experiments’ on neoliberal property development.
“The mayor of London, Sadiq Khan, has attacked foreign investors for using homes in the capital as “gold bricks for investment” following a Guardian investigation that revealed the UK’s tallest residential skyscraper is now more than 60% foreign-owned and is under-occupied.
Facing questions from the London Assembly for the first time since he was elected mayor, Khan warned that building thousands of new homes a year in London to solve the housing crisis would mean nothing if “they are all bought by investors in the Middle East and Asia for use as second homes or they sit empty”.
The London skyscraper that is a stark symbol of the housing crisis
He said: “The Guardian’s front page today is an example of the consequences of the last eight years of being obsessed by numbers rather than [building] the right sorts of homes.”
“Conservative MP Bob Blackman, who sits on the Commons communities select committee, which scrutinises housing policy, said the fact that the five-storey Tower penthouse was owned by an oligarch who had not yet lived there was ridiculous.
Blackman said it might now be time to consider a policy demanding buyers of UK properties commit to living in the UK for more than 90 days a year.
Ken Livingstone, who also backed the scheme when he was mayor of London, said he had no idea so many foreign buyers would be seeking to deposit money in London property.
He described the international buy-up as appalling. “I was very keen to get foreign investment into London, but that was in terms of constructing developments and creating new jobs, not flogging them off to people who just keep them there in case there is a coup and they have to flee,” he said.”
http://www.theguardian.com/society/2016/may/25/sadiq-khan-condemns-foreign-investors-london-homes-gold-bricks-housing-policy?utm_source=esp&utm_medium=Email&utm_campaign=GU+Today+main+NEW+H+categories&utm_term=174100&subid=13842748&CMP=EMCNEWEML6619I2
Revealed: 9% rise in London properties owned by offshore firms
Land Registry data of past 10 months shows 40,000 properties – from entire apartment complexes to wine cellars and car parks – registered in tax havens
http://www.theguardian.com/money/2016/may/26/revealed-9-rise-in-london-properties-owned-by-offshore-firms
I can’t believe how as a nation we have gone from a do it yourself, no 8 wire mentality, to this apathetic lets go to other cities and countries and get other people to invest in us as a country as we are too lazy/stupid/poor/ to do it ourselves.
Even Len Brown was going around NY trying to beg for money – how about doing it ourselves! There seems plenty of money for free trade deals and convention centers at government and local body level. Of course Len Brown did propose a petrol tax first (not looking like such a bad idea now) but the government stopped that idea. What about investing and doing something ourselves! Nowadays Kiwis seem too scared to do anything, make a decision, offend anyone or invest in anything.
Likewise on our exports, Kiwi officials and companies seem happy to clip a ticket and do less work and export raw products and ship back to ourselves than take control of the entire supply chain and innovate and invest (ourselves) to add higher value products. The government seems to think even better sell off to a foreign investor and be thankful for any little bit of tax they may receive. (which seems to be nothing). Don’t bother investing in local’s you are allowed to bring your own slave labour force with you as you buy up.
Now rather than taking control and putting for example accessory units in gardens, putting a hold on migration to stem the immediate housing crisis, commentators are wringing their hands.
The same people who are appalled at kids and families sleeping in cars don’t want to comment about how appalling this is happening when houses have been bought up by foreign millionaires and are sitting empty or the government has a migrant investor category for investing in property here. It’s crazy!
“Blackman said it might now be time to consider a policy demanding buyers of UK properties commit to living in the UK for more than 90 days a year”.
I would totally support making sure that buyers of NZ properties and those that have NZ citizenship or residency have to commit to living in NZ for 90 days or more, or pay a 2% land tax each year and no tax dodging by putting it into names of intermediaries or family members! They seem to have no problems cutting off WINZ benefits overtime someone goes overseas so this should be easy to administer!
Thank you Frank for your brilliant piece on the shameful lack of affordable housing here in NZ. My other half has just commented and suggested we put the hard questions to our Cabinet on how much it costs to maintain the PM’s home Vogel House in Wgtn and also the cost of the MP’s accommodation while they are sitting in Wgtn. They whinge about the cost of social housing but they must be rarking up huge costs each year on maintenance, especially that huge pile the PM lords over. This whole episode is disgusting and it makes me ashamed of NZ these days. $12 million in the budget for Mental Health – how can that give us a safe mental health regime for our people. That and the gross waste of precious funds for the flag referendum. Off topic I know but I had to mention that while I vent my anger. The government always finds money for what they want – corporate welfare for example. Scumbags come to mind.
Excellent analysis, Frank, and a very thorough deconstruction of the “wrong house/wrong size/wrong place” spin put out by this government.
All that remains is for the MSM to read this and follow it up. You’ve done the hard yards, they need to chase it up. (That is, if they can tear themselves away from “The Batchelor”, “the Block”, and other so-called “reality” tv garbage.)
$781,000.000 spent on SIS and GSCB.
$380,000,000 spent on housing.
“Late last night and the night before,
Tommyknockers, Tommyknockers, knocking at the door.
I want to go out, don’t know if I can,
‘Cause I’m so afraid of the Tommyknocker man.”
“Late last night and the night before,
Tommyknockers, Tommyknockers, knocking at the door.
I want to go out, don’t know if I can,
‘Cause I’m so afraid of the Tommyknocker man.”
“Late last night and the night before,
Tommyknockers, Tommyknockers, knocking at the door.
I want to go out, don’t know if I can,
‘Cause I’m so afraid of the Tommyknocker man.”
“Late last night and the night before,
Tommyknockers, Tommyknockers, knocking at the door.
I want to go out, don’t know if I can,
‘Cause I’m so afraid of the Tommyknocker man.”
I stand corrected – the funds allocated for the SIS and GSCB is 178.7 million dollars over four years.
However…an apology costs nothing- unlike the social costs of having whole family’s living in cars because of a housing crisis created by this govts policy’s… and in that … I retract nothing.
You have it wrong Tauranga the sale is going ahead …its Invercargill that the sale has fell through over340 homes were supposed to be sold to Pact the date of ownership the 30th May !..this is not now going to go ahead!
http://www.stuff.co.nz/national/politics/80458757/sole-buyer-of-invercargill-state-houses-pulls-out-stalling-govern
Great job Frank, thanks for your efforts. The truth is pretty slippery with the Natz and FJK and trust is damaged between the NZ people and this trainwreck of a govt. This winter people will suffer and it is directly related to this govt. and it not having sane; healthy and just plans to help with the homeless problem. They are more beholding to the folks who buy/sell land and the building industry, than they are to anyone living on the streets or in cars.
Great job Frank
As well as the right and wrong place was the terrible lie about the potential earthquakes. This was so silly when houses were destroyed in Palmerston North because of luqidfac ton threats, but the private homes knew nothing about it. I argued the case with Housing NZ, of course to no avail, the staff were doing as they were told.
This is a crime, nothing more, to see the situation now.
The casual indifference shown by Bennett and Key of people’s plight is outrageous, .the cavilier attitude, the false laughter , the pathetic lies they tell and the obfuscation is breathtaking.
Yes, there are plenty who still do not care, however I think the tide is turning, to hear economists saying Key and Bennett have got it wrong has woken some people up.
We must demand in what ever way we can
Paula no more selling of the state houses
Paula immediately repair those we have got
Paula fill the empty ones next week
Paula Stop trying to privatize state houses and call them social housing
Paula Stop telling lies, get some guts an ffs it is not hard get on with it
Thank you, Frank, for pointing out the obvious. I wish some more working in the MSM would care reading your post, as they have for far too long been asleep or looked at other stuff, that should not even be in the “news”.
Now some have at least noticed what has long been in the making, that we have a housing affordability crisis, which is also a poverty crisis.
The figures presented do not surprise me one bit. But the truth is, Housing NZ is now expected by this government to do more with the money and assets it has available. That means getting rid of run down and also not so run down homes, and selling land and homes in Auckland and other areas.
They are meant to sell for a good price and then use the sales revenue to invest in and build new, intensified blocks of one or two bedroom units, multi-level, to house the ones in need in often tiny flats where you have little storage, where you have no access to any garden and maybe not even a proper parking lot.
This is the future for “social housing” that they want to offer, through Housing NZ and various other providers, who will also sell some of the land to developers, so they have money to build new blocks to house the poor in the ghettos of tomorrow.
Paula Bennett has tightened the rules, so people will not be able to object and ask for better accommodation, as it is likely to be considered unreasonable and throws you back down to the bottom of the waiting list.
And as she has herself run out of answers to deal with the more immediate crisis, she now offers bribes to the poor to bloody well leave Auckland, so more areas can be used for gentrification and/or for those “investors” to gobble up as land and homes to charge high rents for or to simply speculate on higher capital gains.
The situation is like a social and economic crime of the greatest proportions that this government has committed.
The Key National government doesn’t give a stuff about the number of Kiwis that they are making poverty stricken and homeless, HOMELESS PEOPLE CANNOT VOTE. To vote, one has to have a residential address. National have already stripped voting rights away from prisoners.
Bernard Hickey lied, Bennett’s policy was not “developed in recent days” it was a rehash of an earlier policy announcement, she just upped the ante to 5,000.