How can NZ incomes be lifted to match housing costs?

One of the more useful things in recent weeks in the debate about housing is the clarity of Jacinda Ardern’s position,

Prime Minister Jacinda Ardern says she would like to see small increases in houses prices, acknowledging most people “expect” the value of their most valuable asset to keep rising.

Two things there. One is that the government has no intention of dropping or even preventing further increase of house prices.

The other is inferred, that Ardern sees property as investment as more of a priority than housing being primarily for homes. It also says to me that protecting the investor classes is more important than raising people out of poverty.

This more than anything else I have seen from her or Labour tells me that they are governing for the middle and wealth classes. With kindness for other classes of course, but still.

I can see a kind of rationale for her position in that we need a strong economy to support the underclass, and with the impacts of covid, eg halving tourism, we need the property market to prop up the economy. But it’s still very much let’s prevent people from dropping down a class and doing that at the expense of the people already at the bottom.

Even if that made sense as a strategy it doesn’t explain the lack of support for beneficiaries, for which there is no plan at all for increases in income, including the tens of thousands of New Zealanders who are in no position to ever take advantage of Labour’s main strategy of ‘work will save us’.

So I’m hoping the people that believe that instead of dropping housing prices we could raise incomes might explain how that might happen. Not a vague let’s raise wages and benefits explanation, but an in-depth, number crunching, evidence-driven explanation. Where is it?

Such an explanation would centrally need to take into account Accommodation Supplement (available to beneficiaries and people on very low wages), and benefit rises, because of the way that increases and AS tend to end up in the pockets of landlords. I’m curious if that happens with minimum wage increases too.

And while indexing wages and benefits to house prices might help once the massive gap between income and housing affordability is lessened, I’m yet to see any good explanations for how we get to that more even playing field starting point.

Maybe I’ve missed them or maybe I’m pointing to the Emperor’s state of undress.