Yesterday Labour announced further Housing Policy. The announcement was handled by David Cunliffe, David Parker and Phil Twyford. It is good to see these announcements being shared around.
The proposals are:
The justification is that up to 7,400 people in the region are living in insecure housing and that there is a 7,000 house shortfall in the region. And the rationale is that leaving it up to the market is not working and for the common good Government Intervention in the housing market is appropriate not to mention necessary.
David Cunliffe has criticised the National Government’s failure to address the housing affordability issue. Its inaction has meant that the Reserve Bank has had to step up and with the limited tools that it has fashion a housing policy. Its choice, to place limits on loan to value ratios, is rather brutal in its effect and has a number of draw backs:
The temporary opening up of houses in or near the red zone is a proposal to at least immediately increase the supply of housing until new stock can be built. The examples given, a street where services were intact and one side of the street was outside of the red zone and the other side in the red zone, and a Housing Corporation area outside the red zone where houses were inexplicably boarded up, suggested that there could be an immediate beneficial effect although the numbers may not be large.
Other measures previously proposed by Labour include a capital gains tax and a restriction on overseas ownership. Many foreign administrations have restrictions and a local restriction would dampen down pressure on price increases especially in Auckland.
The immediate political effect is to show to Christchurch that Labour cares. And long term it shows a fundamental difference between Labour and National. While National thinks that the market will always deliver, Labour will proactively intervene if the public interest requires this.