web analytics

Housing NZ to build to sell

Written By: - Date published: 12:30 pm, October 31st, 2012 - 22 comments
Categories: housing - Tags:

Housing New Zealand is going to build some affordable houses in Christchurch and then sell them. It’s not a bad idea. In fact, if it were done right and en masse, it should have been a centrepiece of National’s empty ‘affordable housing’ announcment. But I fear it won’t be done right. It’s not enough just to build affordable homes: you need to make sure landlords don’t snap them up.

First, you need a capital gains tax to get the speculative money out of housing, which drives up prices in a giant ponzi scheme. That would give first homeowners a real crack at buying these houses.

Second, you could go beyond neoliberalism and determine the outcome, rather than leaving it to the market at all. Put a lien on the properties that they can’t be leased by the owners (with exceptions permitted by HNZ etc etc). By cutting the landlords out altogether, you would again make the homes more affordable for ordinary people.

Third, if you really wanted to make this work you would let Housing NZ tenants rent to own their properties with soft loans, which would be recycled into building more affordable, modern housing.

But, will any of these things happen? No. Not under National. These ‘affordable houses’ will turn out to be unaffordable as speculators, who are always going to be able to outbid a young family, swoop in and buy them up – then profit by renting them to those young families that they were built for.

22 comments on “Housing NZ to build to sell ”

  1. vto 1

    I see this and I wonder how Housing NZ will be able to do it any cheaper than those out there doing it now……

    The scale they are talking about suggests no economies of scale. They are looking at doing it together with developers so all the usual margins will be in there. Unless they are effectively doing it on a non-commercial return basis. i.e. out of the goodness of their hearts. But given the lack of heart in this government I simply don’t believe that.

    • onsos 1.1

      Nobody is bothering to build low cost housing. There is a lot more money for property developers in building more expensive houses. The government is not bringing down the cost of housing through its competitiveness, it is bringing down the cost of housing by doing something that property developers aren’t.

      • vto 1.1.1

        mr onsos, if you look around you will find housing options from under $40,000 (small and kitset) right up to $mullions. There is low cost housing, although (subtlety here…) it is expensive relative to what it should be. Compared to Oz house costs it is expensive on a square metre basis.

        The issue seems to arise in getting similar low cost land and then putting a low cost house on it. There is a missing match-up.

        The problem is multi-pronged.

        • onsos 1.1.1.1

          Not so much. Low cost land is low cost because it is undesirable. It is undesirable for solid reasons–it is expensive to live a long way from work and public transport, especially in a city with expensive public transport. This is why people pay high rents for substandard accommodation near the city.

          The answer is to increase housing density near city centres, and along transport corridors. This requires low and medium rise buildings. Answers that involve maintaining lower densities increase transport and infrastructure costs. That is, they are not low cost–and buyers and renters know this.

          Individuals and families cannot develop genuinely low-cost, medium density, low and medium rise housing. That is the domain of property developers. Property developers are not doing this because there is plenty of lower hanging fruit. It’s quite straightforward for government to do, however.

    • karol 1.2

      Rod Oram quoted some interesting stats on Nine-to-Noon yesterday.  They showed how much things had changed in recent decades.  Originally affordable housing was quite a high percentage of NZ new housing stock.  Now it is very low.  So what changed? 
       
      Oram rated the plans in Melbourne for affordable housing.  He said they are not extending the area in the city for building.  But they are doing things like building low level apartment blockss along transport routes, and integrated with shops etc.  It means it’s medium density, good for getting about, and still has a bit of a community feel.
       
      I couldn’t find anything directly with that plan online, but did find this 9 point plan:
       
       

      • insider 1.2.1

        WHat changed? A Labour government came in. Much of the acceleration according to Oram was under their watch.

        Ironically Rod spent much time admiring Melbourne as a city ignoring it is one of the most expensive home markets in the world – far more than any NZ city

    • Draco T Bastard 1.3

      It’s not about making them cheaper but about increasing profits, i.e, rewarding Nationals supporters.

  2. Draco T Bastard 2

    Housing New Zealand is going to build some affordable houses in Christchurch and then sell them. It’s not a bad idea.

    Yes it is as all it will end up doing is rewarding the banks.

  3. insider 3

    So are you saying you want a CGT on people’s homes to stop them selling them? Are you talking about all of them? And you also want to nationalise housing? Why not chuck in reindoctrination of the intelligentsia too.

    • vto 3.1

      Tell me oh great wise insider, in how many of mankind’s communities and societies and nations throughout history has there been individual dwelling ownership compared to communal dwelling ownership?

      It sounds from the tone of your comment that you are well clued up on this sort of thing and I would be curious to know…

      • insider 3.1.1

        Well in the English cultural heritage, the concept of individual ownership by other than the nobility runs back well over 1000 years. That is probably most relevant for our purposes when considering whether a groundshifting policy would be politically acceptable.

  4. Dv 4

    It is interesting that this was NOT announced by Bill yesterday?
    Dont the Nats talk to each other?

  5. Another doomed to fail scheme, and an attempt by the government to try and not live up to their responsibilities to the poor, working and middle class New Zealanders to provide state housing.

  6. millsy 6

    Sell the homes, but have the land as a 99 year lease…

    National policy to allow HNZ tenants to buy their home was a a step in the right direction (I was talking to a long-term state house tenant a few years ago who couldnt wait to be able to buy her home and do it up the way she wanted it), but where it fell over was providing no subsidy for tenants — they had to get a loan from the bank on their own.

    • PlanetOrphan 6.1

      One of the best Ideas I’ve heard M8!

      Would make ownership much more approachable.

    • fatty 6.2

      How about they just build them and give them away to people who have had a history of struggling to pay rent. But put them in with tight conditions for 10 years regarding the upkeep of the houses. If they get to 10 years and the house is in good condition, then they get to keep it.
      First in line can be people with children

      • Lanthanide 6.2.1

        Reward people who aren’t able to pay rent, while those who regularly pay rent get left out? Yeah, that’s fair.

        I also seriously doubt that someone who wasn’t able to pay rent for a state house would be able to do proper home maintenance over the course of 10 years.

        • fatty 6.2.1.1

          Nah…we could also help those who have managed to keep their heads above the water. We could do both. Don’t think of it as rewarding failure, think of it as not being a cunt.

          “I also seriously doubt that someone who wasn’t able to pay rent for a state house would be able to do proper home maintenance over the course of 10 years.”

          Really? …and why would poor people be incapable of keeping a house up to standard?
          If they do have a record of ruining a house, that’s probably cause they have nothing to lose, rather than an in-built tendency to wreck stuff.
          The big stick technique doesn’t really work with marginalised people…maybe we could try the big carrot instead?

  7. fatty 7

    Typical third way bullshit…the Government assists business and fills the pockets of the rich. Redistribution for the privileged.

  8. tracey 8

    Why dont we rezone inner city areas, like sandringham and dominion roads to allow maximum of 4-6 floor apartment blocks. All sitting on bus rputes and very close to rail.

    Use this as a model along main, non motorway, arterialnroutes

  9. SPC 9

    It’s a policy I advocated for Auckland a few years back – to create jobs and ease supply concerns. So I can only support this.

    But on the wider housing policy.

    It’s a tragedy that Bill English cites as a reason for inaction on the rise of values in Auckland – the prospect of homeowners having negative equity. Yet he will do nothing about the cause, people being loaned up to 100% loan finance. Is he saying the government will never allow property values to fall because they are continuing to allow 100% loan finance? Talk about a useless apologist for how things are, yet who is making no attempt to change anything. This speaks to his lack of credibility, or is it simply base self interest – a pro CG disposition.

    One could have lower deposit (on value of the home) requirement for first home buyers (they can be saving via Kiwi Saver), and a higher one for “investors”. Say 10% and 25%.

    Though I would allow a lower deposit level for investors building new homes.

    The alternative idea of a ratio between income and value to lending would of course diminish capacity to borrow against existing property – but this impacts on those borrowing against their home for business purposes. I’d rather just require a higher deposit level for second home purchase (and then set a maximum amount that could later be borrowed against such investment property – say 75% of the original purchase price and also 50% of current value so as to prevent property swaps).

  10. MrSmith 10

    The problem is with the banks and the absolutely stupid reserve bank policy of rising interest rates to check inflation.

    Rents put simply are just the interest on the money that was borrowed to build the house in the first place, interest rates rise, rents rise, inflation increases, the reserve bank rises interest rates, so rents rise, so less money in circulation and spending drops checking inflation.

    The Banks can’t lose whatever happens, the speculators like our dear PM clean up speculating and the man/women in the street gets screwed. At-least the Greens are talking about changing this rigged game, but watch the people who come out swinging against any change they are the criminals.

Recent Comments

Recent Posts

  • Tokelau Language Week reminds us to stay united and strong
    Staying strong in the face of challenges and being true to our heritage and languages are key to preserving our cultural identity and wellbeing, is the focus of the 2020 Tokelau Language Week. Minister for Pacific Peoples, Aupito William Sio, says this year’s theme, ‘Apoapo tau foe, i nā tāfea ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • NZ announces a third P-3 deployment in support of UN sanctions
    The Government has deployed a Royal New Zealand Air Force P-3K2 Orion (P-3) maritime patrol aircraft to support the implementation of United Nations Security Council (UNSC) resolutions imposing sanctions against North Korea, announced Minister of Foreign Affairs Winston Peters and Minister of Defence Ron Mark. “New Zealand has long supported ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pacific trade and development agreement a reality
    Pacific regional trade and development agreement PACER Plus will enter into force in 60 days now that the required eight countries have ratified it. Trade and Export Growth Minister David Parker welcomed the announcement that the Cook Islands is the eighth nation to ratify this landmark agreement. “The agreement represents ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Securing a pipeline of teachers
    The Government is changing its approach to teacher recruitment as COVID-19 travel restrictions continue, by boosting a range of initiatives to get more Kiwis into teaching. “When we came into Government, we were faced with a teacher supply crisis,” Education Minister Chris Hipkins said. “Over the past three years, we ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Border exceptions for a small number of international students with visas
    The Government has established a new category that will allow 250 international PhD and postgraduate students to enter New Zealand and continue their studies, in the latest set of border exceptions. “The health, safety and wellbeing of people in New Zealand remains the Government’s top priority. Tight border restrictions remain ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • First COVID-19 vaccine purchase agreement signed
    The Government has signed an agreement to purchase 1.5 million COVID-19 vaccines – enough for 750,000 people – from Pfizer and BioNTech, subject to the vaccine successfully completing all clinical trials and passing regulatory approvals in New Zealand, say Research, Science and Innovation Minister Megan Woods and Health Minister Chris Hipkins. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • International statement – End-to-end encryption and public safety
    We, the undersigned, support strong encryption, which plays a crucial role in protecting personal data, privacy, intellectual property, trade secrets and cyber security.  It also serves a vital purpose in repressive states to protect journalists, human rights defenders and other vulnerable people, as stated in the 2017 resolution of the ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Ministry of Defence Biodefence Assessment released
    The Ministry of Defence has today released a Defence Assessment examining Defence’s role across the spectrum of biological hazards and threats facing New Zealand. Biodefence: Preparing for a New Era of Biological Hazards and Threats looks at how the NZDF supports other agencies’ biodefence activities, and considers the context of ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020
    New Approaches to Economic Challenges: Confronting Planetary Emergencies: OECD 9 October 2020 Hon David Parker’s response following Thomas Piketty and Esther Duflo. Good morning, good afternoon, and good evening, wherever in the world you might be. I first acknowledge the excellent thought provoking speeches of Thomas Piketty and Esther ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Kaipara Moana restoration takes next step
    A Memorandum of Understanding has been signed today at Waihāua Marae between the Crown, local iwi and councils to protect, restore and enhance the mauri of Kaipara Moana in Northland. Environment Minister David Parker signed the document on behalf of the Crown along with representatives from Ngā Maunga Whakahī, Ngāti ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand and Uruguay unite on reducing livestock production emissions
    Agriculture Minister Damien O’Connor and Uruguayan Minister of Livestock, Agriculture and Fisheries Carlos María Uriarte have welcomed the launch of a three-year project that will underpin sustainable livestock production in Uruguay, Argentina, and Costa Rica.  The project called ‘Innovation for pasture management’ is led by Uruguay’s National Institute of Agricultural ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • 3100 jobs created through marae upgrades
    Hundreds of marae throughout the country will be upgraded through investments from the Provincial Growth Fund’s refocused post COVID-19 funding to create jobs and put money into the pockets of local tradespeople and businesses, Regional Economic Development Minister Shane Jones and Māori Development Minister Nanaia Mahuta have announced. “A total ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Health volunteers recognised in annual awards
    Health Minister Chris Hipkins has announced 9 teams and 14 individuals are the recipients of this year’s Minister of Health Volunteer Awards.  “The health volunteer awards celebrate and recognise the thousands of dedicated health sector volunteers who give many hours of their time to help other New Zealanders,” Mr Hipkins ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community COVID-19 Fund supports Pacific recovery
    The Minister for Pacific Peoples, Aupito William Sio says a total of 264 groups and individuals have successfully applied for the Pacific Aotearoa Community COVID-19 Recovery Fund, that will support Pacific communities drive their own COVID-19 recovery strategies, initiatives, and actions. “I am keen to see this Fund support Pacific ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Community benefits from Māori apprenticeships
    Up to 50 Māori apprentices in Wellington will receive paid training to build houses for their local communities, thanks to a $2.75 million investment from the Māori Trades and Training Fund, announced Employment Minister Willie Jackson today. “This funding will enable Ngāti Toa Rangatira Incorporated to provide its Ngā Kaimahi ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Training fund supports Māori jobseekers
    Rapidly growing sectors will benefit from a $990,000 Māori Trades and Training Fund investment which will see Wellington jobseekers supported into work, announced Employment Minister Willie Jackson today. “This funding will enable Sapphire Consultants Ltd. to help up to 45 Māori jobseekers into paid training initiatives over two years through ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Ruakura Inland Port development vital infrastructure for Waikato
    The Government is investing $40 million to develop an inland port at Ruakura which will become a freight super-hub and a future business, research and residential development for the Waikato, Urban Development and Transport Minister Phil Twyford, and Māori Development Minister Nanaia Mahuta announced today. The funding has been has ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • Appointments made to Defence Expert Review Group
    Defence Minister Ron Mark announced today the establishment of an Expert Review Group to review a number of aspects of the New Zealand Defence Force’s (NZDF) structure, information management and record-keeping processes.  The Expert Review Group’s work arises out of the first recommendation from the Report of the Government’s Inquiry ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • No active community cases of COVID-19
    There are no active community cases of COVID-19 remaining in the country after the last people from the recent outbreak have recovered from the virus, Health Minister Chris Hipkins said today. “This is a big milestone. New Zealanders have once again through their collective actions squashed the virus. The systems ...
    BeehiveBy beehive.govt.nz
    3 weeks ago