We all know that there is a massive home affordability problem, especially in Auckland. There are 150,000 fewer homeowning families today than there would have been at 1991’s homeownership rate. So, here’s National’s plan: don’t build any additional houses, just sell some state houses (despite the waiting list for them) in provincial towns… where there isn’t an affordability crisis, and give 500 families these houses up to $20,000 of taxpayer money. That’s not a home affordability policy, it’s a parody of one.
National’s policy to give the buyers of these 500 state houses a 10% or $20,000 gift (whichever is least) will cost $6 million all up. That’s $6 million in subsidies to 500 families is a hell of a lot of money – $12,000 each on average for houses that are worth $120,000 on average.
And families with incomes up to $83,000 will be able to buy them. Usually when you talk home affordability crises, its because the average house is 5 or more times the average wage, not 1.5 times. What you’re going to see is a handful of middle income families buying houses that they can afford and getting a taxpayer gift on top. Helping middle class families to buy cheap houses (that, by the way, poor people want to live in!) seems like a bloody strange way to spend taxpayer money.
Ff the Government really doesn’t need these particular state houses anymore, it should just sell them at market price and use the funds to buy new houses of the type and in the place needed. There’s no need for a big subsidy to a random few. It’s not just that one middle class family gets $12,000 that they don’t particularly need while another down the road, or in another city, that can’t buy an ex-state house misses out.
The Greens say that they actually looked at deposit subsidies when they put together their housing policy at the start of the year. They quickly worked out it’s a big per unit cost – it can be help lots of people where it’s really needed only if it’s really, really expensive, or it can be tiny and half-arsed, which is what National’s presented. The Greens, instead, decided on a cost-neutral modern version of State Advances to compliment Labour’s KiwiBuild.
Actually, this subsidised sale scheme reminds me a lot of the Nats’ asset sales subsidies: they only benefit a relative few at relatively large cost to everyone else and for no good economic reason, just a political one.