On the Greens housing proposals, and Pita SharplesJanuary 25th, 2013
In the wake of David Shearer’s Labour party conference speech last year, housing policy has become a crunch test of how well each political party aims to respond to the country’s pressing social needs. Labour for its part, has ambitiously promised to enter the housing market and build 100,000 low cost homes over a ten year period:
Labour says its flagship KiwiBuild policy will help families realise their dream of home ownership and inject $2 billion a year into the economy through jobs and construction.
The party says under the scheme, first-home buyers will be able to buy a modest house for about $300,000.
The policy involves raising $1.5 billion by issuing Housing Affordability Bonds, with two-thirds of the homes to be built in Auckland.
Much of the criticism of Labour’s plan has turned on whether houses can realistically be built for the price stated, and whether even those $300,000 home would be affordable to low income families most in need – both in terms of an initial deposit, and in the capacity to keep up the mortgage re-payments, given that many of the breadwinners involved will have no job security. Even so, the polls are indicating that Labour’s policy has definitely struck a chord with voters.
Meanwhile, National is treating house prices as mainly being a function of land zoning by councils – and is claiming that putting more land in the hands of developers to build more houses will significantly bring house prices down within reach of those most in need. In a speech later today, John Key will reveal the details of the law changes required. Last year, the lobbyists made their wish list – and the rationale for it – fairly clear.
Warwick Quinn, chief executive of the Registered Master Builders Federation, said [that] if land became more readily available through faster consent processing then that would create cost savings, and help bring down house prices, he said. “Land would theoretically be cheaper. Supply should improve faster to meet demand, which would put a cap on prices. Land would be the biggest driver of property prices altogether because of how much it costs.” The federation was keen to see a competitor agency for processed resource consents – something the Government has said needs further exploration – to help ensure they were processed as efficiently as possible.
Love that word “theoretically.” Theoretically, land prices would fall but not perhaps, in the real world. We’ll find out later today if the lobbyists got the land re-zoning and separate resource consent agency they’ve asked for. Late last year, Auckland mayor Len Brown tried his best to flag that the urban sprawl that may benefit developers could well bring additional costs for the city in its wake :
“Two areas that require caution are the cost of infrastructure, which can only be funded three ways: through development contributions, rates or taxes. In the end, someone has to pay, the question is who? And with regards to proposed changes to the consent process, the rights of the community must continue to be protected.”
Indeed they must. The third entrant in the housing policy competition arrived this week, when the Greens announced their programme. The policy has the virtue of simultaneously tackling the needs of both home buyers and renters, and it has three main components:
(a) a rent-to-buy mechanism for home-owners
(b) a ‘warrant of fitness” of basic quality standards that all properties put up for rent would have to meet and
(c) a proposal that rent increases should be only on an annual basis, in order to give renters a measure of home security and a better ability to budget for their housing costs.
Clearly, the Greens model is to be seen as complementary to Labour’s Kiwibuild scheme, and its rent-to-buy element picks up those families near the bottom of the ladder, who would otherwise be at risk of being left behind by Labour’s scheme. The Greens have a policy of building 2,000 new homes a year, in partnership with community organization and iwi. This is a figure arguably more realistic than the 100,000 in 10 years that Labour is advocating. Leaving that aside… rent-to-buy will be merely a strand of the building programmne. within the Kiwibuild target, Turei told RNZ, some houses could be set aside for commercial mortgages for those able to meet those costs, while others would be allocated under the “ progressive ownership” rent-to-buy conditions for families with minimal resources and poor job security.
In scale, the Greens are putting up a quite modest proposal – it is not as if every hard pressed family in the country would be able to walk into the Housing Corporation and demand that a house be built for them. The main virtue of the Greens proposal is that it would save Labour from repeating the same mistake it made with Working for Families – namely, of excluding the families most in need of government help. With Working for Families, beneficiaries got left behind. It is essential this doesn’t happen again to beneficiaries and the working poor, when it comes to housing policy.
Yet as it stands, Labour’s Kiwibuild policy is predicated on families being able to pay the entry costs and sustain the mortgages at commercial rates – or at something very close to them. Under current economic conditions and given the nature of the job market, a growing number of families who are in need of healthy, affordable housing would indeed be at risk of being left behind. As the housing policy debate heats up, this looks like becoming a useful example of how the two centre left parties can usefully fill in each other’s policy gaps.
Bathetically, Key has tried to talk down the housing issue. There isn’t a national housing crisis, Key claimed in his inimitable, grammar scrambled fashion on RNZ this morning
“Its not housing issues all over the country. Really,.its an Auckland, to a s seeondary Christchurch,Wellington issue. Its in the big built up urban centres. We just need to make that [planning consent] process easier, faster, and more predictable.”
So that’s alright then. According to Key, we only need to worry about how to house people in our major cities, and if we treat giving more leeway to developers as being our top priority, then everything will work out just fine.
Sharples At Bay, on Full Pay
So Pita Sharples wants to stay on as a Minister – with the attendant salary and perks – if and when he loses his co-leadership gig with the Maori Party to Te Ururoa Flavell. That plaintive wish only validates the claims made about the interest in ministerial limousines etc levelled at the Maori Party’s parliamentary wing ever since it went into coalition with National. Not to mention the problematic matter of how the issue of mana might be managed if Flavell replaced Sharples as leader, but not within Cabinet – or would a ministerial post and salary have to found for absolutely everyone in the Maori Party?
It seems relevant to the current circus :
[Sharples :] “On the other hand, there are things we find hard representing a people 60 per cent of whom are on lower wages. “Sometimes the monetary bills we have to support are very hard on us.” [ Or more like it, them ?]
The Maori Party hoped to be a part of any government, regardless of its leanings. Then he confessed: “Actually, I got so used to the increase in salary I told the Prime Minister you’d better be good because if the other guys get in, I’ll go sell myself over there to keep my ministerial salary. I just got a new house, man – I can’t afford it on a backbencher salary so I’m up for grabs.”
Wow. As they say, many a true word gets spoken in jest.