State housing fantasies and a tale of two graphs

Yesterday Labour once again championed it’s building of state houses with a typical smoke and mirrors announcement by Prime Minister Chris Hipkins and Housing Minister Megan Woods.

Labour housing spokeswoman Megan Woods has promised 6000 additional public and transitional housing places if Labour is elected.

The promise was made at a campaign event in Wellington where Labour Leader Chris Hipkins warned National would wind back progress on state house construction.

The policy was costed at $6.2 billion in new capital spending and $765 million in new operating spending (over the next four years). The new money begins in the 2025/26 year and stretches out to 2027/28. It would bring the total additional public and transitional places delivered under Labour to 27,000. The places will be a mixture of newly-built homes and homes purchased from the existing stock of houses and turned into public housing.

The government continues to repeat these deeply misleading figures on the number of state houses it has built – ignoring the thousands which have been demolished and the land sold to private property developers. The net increase in state houses is minimal. Much of the increase is from community housing providers which have contracted existing private homes and then received an IRRS (Income Related Rental Subsidy) from the government to make it work. In other words these are NOT newbuilds and most will not even be state houses.

Labour is right to condemn the previous National government’s decision to sell state houses in Tauranga (1124 sold to IHC) but those houses remain as “social housing” with IRRS rents. Otherwise Labour has sold as many state houses as National and has plans to sell many billions in state house land to private property developers. That is where the $6.2 billion in “new capital spending” will come from – part of the largest privatisation of state assets since the 1990s.

We shouldn’t expect anything better from National/Act who will be only too happy to continue this Labour policy of privatisation of state house land.

Interestingly some time in the last month or so the Ministry of Social Development changed the way they present the state house waiting list on their website. Here is the latest graph on their front page.

It is a truncated view of what normally appeared and seems to show at least Labour is holding the numbers steady. However, a much longer time period used to be shown on the front page. Here is what the longer graph looks like, although it misses the period from December 2017 when Labour was first elected – at that time the waiting list was just over 5,000.

Is someone in the Ministry trying to obscure the Labour government’s housing failures?

Smoke and mirrors indeed.