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Housing policy shambles

Written By: - Date published: 7:43 am, November 5th, 2014 - 30 comments
Categories: housing, national - Tags: , , , , ,

Like most of their policy, the Nats’ sudden decision to sell off a significant chunk of our state housing asset is a poorly thought out shambles. Two great pieces on this yesterday. Tim Watkins at Pundit:

When is an asset sale not an asset sale? & other questions about the Social Housing shambles

National is trying to the ‘nothing to see here’ line when it comes to its social housing policy, but the truth is it’s in a tangle and has no mandate for sale

But of course it’s an asset sale (as I wrote about a couple of weeks ago, knowing this issue was a tar pit waiting for National to stumble into), and it reveals an old-fashioned Rogernomic free-market push by a government that likes to sell itself as non-ideological. In many cases that’s a fair pitch, but not in its social housing policy.

Only the Nats don’t seem to have thought this through properly and are now on the defensive and, frankly, in a bit of a muddle. Let’s look at some of the contradictions.

First and foremost, it’s a question of scale. There are over 5500 families on the urgent waiting list for a state house, so to make any tangible difference to that the government needs to sell quite a few houses and open up quite a few large, neighbouring sections to redevelopment. Yet a large sell-off on the scale English wants is politically dangerous – it’s another asset sale. So is it big and bold and significant (ie an asset sale) or just a few houses (ie ideological but pointless)? National’s in a bind.

Then there’s a matter of who they’re selling to. All the spin is of community housing providers. Most often the Salvation Army and Presbyterian Support are mentioned. But then Bennett goes and admits iwi are in the front of the queue for some (where treaty settlements require it). And they want developers involved, who may or may not be required to build a percentage of social houses and could go ahead and build whatever they want on those sites. Oh, and some first home-buyers.

Suddenly this push to help the most vulnerable is looking like a way to also ease the middle class crisis of an over-heated housing market. …

Read on at Pundit for further contradictions. Then see Russell Brown at Public Address, examining the way that other aspects of housing policy repeat the mistakes of the 90’s:

Housing, hope and ideology

The thrust of it is that the government believes subsidising rents will be a more effective way of bringing people out of poverty than providing conventional public housing. This may sound like a familiar idea to mature readers – because it’s not unlike the National government’s housing policy in the 1990s.

This time around, the government’s exit from public housing provision is being sold on cost-benefit grounds. It’s a matter, says the Prime Minister, of bang for buck

When the Bolger government reformed housing policy in 1993, the change came with similar promises. As this 1999 paper by David Thorns of the University of Canterbury explained, the cost of the expanded accommodation supplement was forecast to increase to $476 million by 1996, then stabilise around that level. In the real world, the cost in 1996 was already $560 million annually – and it exceeded $800 million by 1999. By that point, the government was arguing that its own scheme was too generous and needed more targeting

In the absence of an accompanying state building programme – again, the government aims to do the opposite – it seems extremely optimistic to suppose that third parties will step up and build at the necessary scale. And that the expansion of subsidies to landlords won’t simply drive up house prices even further.

National’s housing policy is stupid at all levels. Which is probably why they’re in such confusion themselves about it:

Key, English at odds on State housing

Before Parliament sat today, Mr English was asked whether profits from the sale of State houses would be reinvested in social housing. “Certainly for the foreseeable future as much as we can. In the longer run, if there’s other people providing houses then the Government wouldn’t be giving them money for social houses,” he said.

But moments later in Parliament, Mr Key said no decision had been made about where the money would go.

They are making this nonsense up on the hoof. Strong stable government – hurrah!

30 comments on “Housing policy shambles”

  1. fisiani 1

    If the National plan to reform state housing and get people out of garages and overcrowded accommodation into houses that suit their needs fails to deliver I could then understand the concern expressed in the post. This constant naysaying “It’ll never work” is just so negative. Must surely be a Green or Internet Mana (have they divorced yet- the romance is now six weeks after the impotent limp performance?) perspective as Labour apparently are still the positive party.
    If a Labour government announced that it would massively increase rent subsidies the plan would be lauded here to to the heavens I’m sure. I suspect the angst and obvious frustration at being outflanked is because yet again John Key has come up with a plan to win the hearts and minds and votes of the poor and disadvantaged.
    National’s plan to reduce poverty is slammed. National’s plan to improve the quality of life of the poorest is slammed. National’s innovative collaboration with housing charities is slammed.
    Just be honest. If National propose it, then it must be bad.
    That approach might cheer up the troops and vindicate their minority opinion but not the voters. The time for judgement of the housing reforms is in the future.

    • Craig Glen Eden 1.1

      Your comment is so stupid on so many different levels fisiani .
      One the Government isn’t moving people out of Garages into more suitable housing they are selling the housing. Two the subsidising of private Landlords has already been done the in the 90’s it failed. Labour wouldn’t suggest massive increases in rent subsidies because its plan was to build more housing. So are you stupid fisiani or deliberately misrepresenting both National and Labours position on the issue of the housing of NZe’rs in need of decent housing.
      Lastly you claim National have a plan to reduce poverty, really says who? Just how long has this plan been in operation and what have the results been so far?

    • Stephen Dickson 1.2

      ficiani, If it was such a good idea and the nats were so happy about it why didn’t they mention it before the election? WHY???
      That’s right, cause if they had they would have lost the election on this one issue.

      I will assume next election john key won’t be telling us all every five seconds how he was raised in a state house now will he.

      • Aerobubble 1.2.1

        When a company sells assets in the course of business its for profit. When the state does its politics. National are gambling that given the very low level of state housing and the poor quality, that they can get away with discharging their duty to NZ by shuffling existing tenants around while off loading bad stock in poor areas to charities and harvesting a huge bonus from over priced stock in well of areas. Its cynical, its greedy since the money won’t go into new housing, and e few good news stories will paper over the ongoing crisis in housing. Also potentially leaving a mess for Labour to have to clean up when charaties walk away. Another nz rail

    • Murray Rawshark 1.3

      A rent subsidy is a wealth transfer to landlords whichever party does it. Everything else you say is wrong too.

  2. The Gormless Fool formerly known as Oleolebiscuitbarrell 2

    You think that’s bad. I hear Air New Zealand are selling sets on their planes. Fucking asset sales.

    • Tracey 2.1

      you just can’t help living up to your name can you?

    • ghostwhowalksnz 2.2

      Air NZ doesnt sell the seats on its flights ( you dont get to keep it afterwards!) but rather they RENT the seats.

      Which is exactly what state houses do, they are RENTED to their tenants.

      Which tells us Gormless has zero economic understanding

  3. Tracey 3

    Is Bill English the new Liar in Chief…

    or is he telling the truth and Key is the unmatched Liar in Chief?

    Following who is th ebiggest liar in national has only been made marginally easier by the banishing to papakura of the less than honourable Ms Collins.

    “Finance Minister Bill English says the proceeds from selling state houses are unlikely to be spent on new state houses and may go into the Consolidated Account.

    “I mean, if we want less stock, there’s not much point in rebuilding stock with it” … “

  4. Shaz 4

    I think it is possible that NZ is once again being played again by the National Party and the media. Remember this scenario playing out over the past six years? We are simply here again. Worst case scenario presented (massive private sales are forecast)- This is often a massive over-reach by the government on previously stated policy to test the temperature, followed by inconsequential public musings, obfuscation and contradictions

    Then a clarification and ‘ back track’, to a position which in the light of the spectre raised seems less extreme but is nonetheless solid neoliberal fare.

    Eventually a house will be found where there is no one on the waiting list. (Housing NZ staff will be crunching data to see if such homes exist. (I recall Nick Smith found 3 or 4 such homes in the last term and they were sold to private owners)
    Expect the clarification to be something like ex-state and new housing being managed by property developers and property managers who will be the owners and social housing providers the tenants who then sub-contract to people in housing need . This will all be supported and wrapped around by a PPP because I anticipate we will be told ‘social housing providers don’t have the capacity and skills’ to do this alone.

    The final nail is when the media portrays those who have spoken out at this stage- progressives, social housing providers as hysterical and alarmist. Property developers and property businesses meanwhile are just biding their time and waiting for the contracts to fall like ripe plums into outstretched hands.

    For Nationa this a it. Business as usual. A rough game that they play very well with capital and the media at their left and right elbows should they falter.

  5. Chooky 5

    It makes sense if you look at the Neolib self interested economics of the present John Key Nact govt politicians who see opportunities for developers monetary interests…hence …..an artificially created need for NZ housing and monster motorways and infrastructure ( Money , Money Money opportunities!)

    1.) first sell off all existing NZ State housing to overseas investors and new immigrants who can afford them at artificially created high prices

    2.) thereby creating a huge housing need for a large underclass of the New Zealanders.

    …hence the existing NZ poor and NZ youth , the under- thirties saddled down with huge tertiary education debt and /or jobs which can not fund them into high price NZ home ownership,

    3) ….add to this Housing need a mass influx of new immigrants and refugees from Boris’s bankrupt bankers’ London and elsewhere

    4) Bingo! …new huge wealth creation opportunities for John Key Nact govt friendly developers

  6. millsy 6

    Ironically, if we put all this aside, I think we need to give credit to John Key for admitting/accepting, in a roundabout way, is that people get out of poverty faster when they have to pay less of their income in rent (ie an income related rent). Though it could very well be a ploy to ‘sell’ this plan. I have noticed both Key and Bennett emphasising the expansion of income related rents in the past few weeks whereas, before the election, Smith was talking about these NGO’s giving ‘wrap around support’, and that is why we need to give all these state houses away to them — and here is the kicker: The NGO’s will be go to the banks and burrow money against the state houses to be able to buy/build more housing — so, in a round about way, the banks will end up in effective control of our state/social housing portfolio.

    • Nic the NZer 6.1

      The governments also been producing evidence that giving more money to beneficiaries results in them being able to get off the benefit.

      http://www.stuff.co.nz/national/politics/10696074/Minister-says-3k-job-scheme-a-clear-winner

      Not that the facts have gotten in the way of the rhetoric that, ‘giving more money to beneficiaries is not the answer’.

    • ghostwhowalksnz 6.2

      Dont be fooled by the NGO window dressing. They are used as a front to run the service, it will be a private financial group that own the houses. May even be a bank thats the provider of the money and who will the own the houses for long term untaxed capital gain.

      In the US private equity/hedge funds have been big buyers ( 1000 per month) of houses that have been sold as mortgagee sales. They arent in a social housing role but will flick the houses on when the market improves.

      One of the worst things about Englishs scheme is that the houses will be sold for below market value as a ‘trade sale’
      Much like the power generators were, with all sorts of gimmicks to make the optics look good ( and thus get airhead Mike Hosking raving how good is this)

  7. Tom Gould 7

    The big question they are studiously avoiding is what will they do with the $5 billion? Someone suggested another free irrigation scheme for hard-up dairy farmers. The real problem is there simply are not enough affordable houses to either rent or buy, and the obvious solution is simply to build some more of them.

  8. Jay 8

    The success of a scheme that pays a 3K subsidy to keen and resourceful people in return for taking up work doesn’t therefore prove that increasing benefits will somehow have a long term benefit. That conclusion makes no sense at all. Why even say stuff like that.

    • Nic the NZer 8.1

      Oh, boo hoo for you, the economy doesn’t work according to National party rhetoric.

    • Murray Rawshark 8.2

      I suppose that’s progress. You’ve accepted that beneficiaries can be keen and resourceful people. What about giving them all a $3K lump sum, so they can afford to move, buy a car, or fix whatever else is holding them back?

  9. Ad 9

    This is just cruel.

    The housing policy area is still the combined Oppositions’ best hope for National’s substantial undoing.

    But Key is pulling strong and thick nationalist ropes across his theatre: will the great foreground veil of militarised security be enough to camouflage the background of housing, homelessness, and middle-class housing shut-out? To pull this off, Key is rolling out policy guns into the wings that have not been fired since WWII.

    in short: the Great Game is security v poverty.

  10. Atiawa 10

    State ownership of houses for those for whom all else fails offers stability.
    Under the first Labour government and just about every government since, it wasn’t just about the government providing the housing. The reason why the state is best placed to do so is because it also provides continuity. With the government as your landlord, you won’t find your home taken from you in a mortgage sale, or sold up because the owner has just decided they’ve had enough.
    Just like its change’s to Industrial Relations law, this government wants us to go back to the 1920’s. Placing state housing under the ownership of private landlords destroys the basic principle of continuity and stability.
    Give us a break!

    • Stuart Munro 10.1

      Never mind the 1920s, this government is headed for the 1820s – before all those pesky things like the universal franchise and the Truck act.

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