The (un)affordability of housing in NZ, especially in the cities of Christchurch and Auckland, is beyond crisis point. It’s become an inhumane blight on the record of our current government. In Auckland it has gone from crisis to hyper-inflated devasation for the least well off. And most often, those on lowest incomes are being relegated to living in transport poverty on the outer margins of the city.
Some MSM reporters have been talking up the up-swing in home building. But doing that all within the system of private home ownership is just giving more fuel to the rentier classes, and those desperate to buy their own home. The answer is simple – to end the crisis in (un)affordable housing, the state could just provide more housing at an affordable cost.
Meanwhile, the just released report of the Demographia International Housing Affordability Survey, shows that Auckland housing is becoming increasingly over-priced – the bubble just keeps on inflating. Anne Gibson reports in today’s NZ Herald:
Last year, the survey pegged Aucklanders as having a median household income of $75,200 and a median house price of $506,800, giving the city a total median multiple of 6.7 (house prices divided by incomes) when anything more than 3 is regarded as unaffordable.
But now Auckland’s median house prices are $561,700 and median household incomes $70,500, the city has been pegged as having a median multiple of 8. The survey concluded Auckland had slipped further in its ranking as one of the world’s most severely unaffordable places to live.
Last year, Auckland was the world’s 313th most unaffordable place out of 337 cities but now it is the world’s 347th most unaffordable out of 360 cities.
Christchurch-based survey co-author Hugh Pavletich said the trend was extremely worrying.
Demographia sourced its New Zealand housing data from the Real Estate Institute and the incomes from Statistics New Zealand.
Mr Pavletich said income figures were projected on Census 2006, until Census 2013 when the latest figure was used.
Some NZ economists question the findings. But more worrying, is the underlying ethos of the Demographia Report written by Alain Bertaud, Urbanist, Senior Research Scholar, Stern School of Business, New York University and Former Principal Planner – The World Bank. Basically he is critical of the kind of approach in Aucklannd’s Urban Plan – an approach that aims to increse density in selected areas of Auckland, rather than continue to consume more land for housing and urban development.
Bertaud wants to follow the (alleged) approach of the Chinese government:
Even the Communist Party of China recently declared that resource allocation is best achieved through markets; why can’t urban planners in so-called market economies reach the same conclusions and let markets decide how much land and floor space households and firms will consume in different locations?
“Markets” don’t actually decide any such thing. It’s people: people in positions of power and wealth, especially the investment bankers and property speculators who really decide how things go – and they want the land to be available for their profiteering. It has been people with power, money and influence hiding behind the myth of “markets deciding”, that have created the life-destroying property bubble in places like Auckland. Continuing with this mythical scam, Bertaud concludes:
It is hoped that the clear quantitative approach demonstrated by the Demographia survey would incite local think tanks in India, Brazil and China to develop the data base and the methodology to analyse the affordability problem and find a market solution to solve it.
There is another, more humane and economically beneficial way to solve the crisis in affordable housing: a crisis maintained by the profiteering of the few, and causing inhumane suffering for the least well off.
It’s been done quietly in Utah, while other US states have continued increasing human suffering on the back of the misery of homelessness. Other states have been harrassing and demonising the homeless – seriously, where are they going to go if they are hounded off the streets?
In 2005, Utah figured out that the annual cost of E.R. visits and jail says for homeless people was about $16,670 per person, compared to $11,000 to provide each homeless person with an apartment and a social worker. So, the state began giving away apartments, with no strings attached. Each participant in Utah’s Housing First program also gets a caseworker to help them become self-sufficient, but the keep the apartment even if they fail. The program has been so successful that other states are hoping to achieve similar results with programs modeled on Utah’s.
It sounds like Utah borrowed a page from Homes Not Handcuffs, the 2009 report by The National Law Center on Homelessness & Poverty and The National Coalition for the Homeless. Using a 2004 survey and anecdotal evidence from activists, the report concluded that permanent housing for the homeless is cheaper than criminalization. Housing is not only more human, it’s economical.’
The lesson is clear. To solve NZ’s housing crisis, especially in Christchurch and Auckland: a significant increase in affordable state housing, and make the housing available to all who need it.