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Key Govt asset stripping state housing

Written By: - Date published: 7:56 am, April 25th, 2014 - 54 comments
Categories: assets, class war, cost of living, housing, labour, mana-party, phil twyford, poverty, Privatisation, Public Private Partnerships, same old national - Tags:

Simon Collins in today’s NZ Herald reports on some damning revelations that Phi Twyford exposed via an OIA (Official Information Act) request for documents.

National government state house sales Tamaki Housing Group

Some of the intent to use finance gained at the expense of the government’s run-down of state housing never eventuated.  However, there is evidence that the government is planning to continue running down state housing to the benefit of non- government entities, including some from overseas.

Housing New Zealand considered using an insurance payout for Christchurch earthquake damage to meet an unexpected demand to pay higher dividends to the Government in 2011, official letters disclose.

The heavily edited letters, provided to Labour housing spokesman Phil Twyford under the Official Information Act, show that the corporation also slowed down its repairs and maintenance to fund an unexpected $45 million jump in the dividend required that year – from $63 million agreed in the agency’s statement of intent to $108 million.

The documents also reveal that Housing NZ plans to raise $383 million in the three years to June 2016 by selling or leasing state houses to community and iwi groups and “the possible introduction of third party equity via possible overseas providers”.

This is the first time anyone has mentioned foreign companies being involved in planned state house sales, and Mr Twyford said it might point to possible public/private partnerships to redevelop state housing.

“They have reduced the net number of state houses by 700 in the last 12 months. They are using it as a cash cow in the middle of a housing shortage.”

This clearly shows the government approach to state housing: to run it down at a time when housing unafforability is hitting those on low incomes the hardest.  And the plan is to hand over more of the operations of “social” and other rental housing to non-government or private entities. This will increase the unaffordability of housing for those on low incomes.

I would like to see the Labour Party match the Mana and/or Green Partys’ policies of increasing state housing.  The Green Party policy states:

* Increase acquisition and building of state housing units by at least 3000 units a year for the next 3 years.

* Maintain an income related rental policy of 25% of income for Housing New Zealand Corporation tenants.

The Mana Party policy states:

* Build 20,000 more state houses within the next two years.  This will start to deal with the current crisis in housing availability for low income people, and will also create jobs and training opportunities.

* Maintain income related rents at no more than 25% of income for state, local government and community and iwi social housing.

Good work Mr Twyford on the OIA.  I’m still waiting to see a strong commitment from Labour to increase the state housing stock.

state housing

Micky Savage crowd

 

54 comments on “Key Govt asset stripping state housing ”

  1. Sacha 2

    Govt finding a way for global financiers to clip the ticket again at our expense. Charming.

  2. greywarbler 3

    A worthy subject for Anzac Day karol. The men and women who died or were wounded in the wars that we have fought were fighting for a NZ that was a good place to live in where people had rights and weren’t under the yoke of harsh oppressors. Unfortunately the actions of successive governments have resulted in their falling into this category, for many in NZ. And their first thought is not for the betterment of all NZs, including the absolute need for secure and warm housing.

    Housing that provides secure and comfortable living and amenities is a basic need, second only to food and water for people who are part of society. Without a place of their own, even a secure room with additional attractive amenities attached, people become outsiders.

    And about private interests. This happened in Britain and there were notable cases of corruption some years ago. Private landlords creaming off money and having neglected slums for poor and needy people. We know what will happen. And right wing governments don’t care to do a better job for their electors than the private rankrenters do for their customers.

    Labour – you have to start doing something immediately you get in about this. Not just promise 10,000 new houses a year. Work with the bad system and take out the pus.

    • the pigman 3.1

      The situation with ex-council housing in London is atrocious. I spent 2 years living in such a place owned by a witch, paying 1600 quid a month for a 2 bedroom place in Bethnal Green. She had picked up numerous other Council flats in the area/Hackney and took almost 2 months to send someone when the washing machine broke down. She would regularly threaten us with eviction for (very quietly) playing music after 8pm because it upset the mentally-disabled guy downstairs. Such a powerless and soul-corroding experience.

  3. tc 4

    Another willing destruction of public assets for a few sheckles to try and plug the hole they punched in crown revenue with the fiscally negative tax cuts.

    Any dividend should be ploughed straight back into hew housing stock so they’ve done this knowing it will impact the state of our already low public housing numbers, so it’s cynical and focused on areas that don’t vote for them.

    Good work Mr Twyford now how about getting this fact out and about to wake the sheeple up to the nats

  4. James 5

    Ah the good old 10000 houses a year that they still have not costed or given sale prices, or proved that they can be built for x unless it’s miles away from the cities (where the jobs are). Yeah the thinking public really believe that is going to happen (esp in Auckland where it is most needed). Is laughable

    • Plan B 5.1

      you could build them in Devonport, plenty of government land available. close to the city.

  5. Karen 6

    Labour really do need to announce some policy that supports an increase in the number of State houses if it is serious about getting children out of poverty. Children need to grow up in decent, stable housing as a basic need, and without it their health will suffer and they will do badly at school. State housing should be available in every suburb – not just in deprived areas. Rents need to be based on income. I was brought up in a state house in a suburb that had a very wide range of housing with state houses scattered throughout. It was a brilliant scheme that meant the local schools didn’t just have really poor kids with all the problems that can accompany poverty.

    Of course I’d prefer to get rid of poverty but that will take much longer. In the meantime, let’s make sure there is decent hosing for all.

    • Descendant Of Sssmith 6.1

      Labour have no interest in it’s old socialist principles.

      8 hour working day
      40 hour working week
      Right to strike
      progressive taxation
      plentiful state housing for life
      regional development
      decent benefit rates
      free secular education
      free childcare

      “In the meantime, let’s make sure there is decent hosing for all.”

      Both national and Labour do that to the poor.

      • Mary 6.1.1

        It’s time we abandoned Labour. Cunliffe was full of it when he talked about all this wonderful change. They’ve had almost three terms in opposition to get its welfare and housing policy sorted out and despite pressure from the Left have done nothing. We can only take from that that Labour will do nothing again. I’m sick to death of them. It’s time the Left gave Labour the boot and put energy into the Greens and Mana even if it means another three years of the nactoids in the meantime. Labour’s so stuffed that if that’s the price we have to pay then so be it. When will the Left reaslise that Labour no longer cares about the poor? We’ve been such suckers to keep hanging on thinking that one day they’ll change. Labour won’t change and it’s time to cut them loose.

      • greywarbler 6.1.2

        Decent hosing! We are already suffering a regular dousing from both God and the NACTs always at inappropriate times and places.

      • mikesh 6.1.3

        “In the meantime, let’s make sure there is decent hosing for all.”

        Soak the poor, ya reckon?

  6. captain hook 7

    so whats new? its the policy of all National Governments to reap where they have not sowed.

  7. Paul 8

    Savage’s dream being ripped to pieces by the puppet of international capital.

  8. Will@Welly 9

    Savage, Lee and all those who lived through the depression era knew the value of decent housing. That’s why state housing was introduced. The by-product was jobs and training. After the second world war, would New Zealand’s economy really have coped without state housing?
    The answer is no. The reason for that is as we can see today, as that department has been run down by successive governments, New Zealand now faces a housing crisis.
    As for overseas entities coming in to take over “social housing” what a joke!! New Zealand pioneered so much, now under the most corrupt Government the country has seen, our sovereignty, our way of life, our culture, our very being, is being sold off to any one for whatever as long as it benefits the Tory oligarchy.

  9. Descendant Of Sssmith 10

    And wtf is with a government who wants profit, let alone an increased profit, out of a government department who runs housing at a time there is a housing shortage.

    So they are taking an extra $45 million dollars out of housing.

    At the same time they are reviewing 800 tenants who are near market rent to kick some of them out. As they will be the higher paying tenants this will further reduce their revenue streams ( logically they will be replaced by lower earning tenants) so where will this money come from.

    At the same time they are going to start subsidising private landlords (through social housing ) which will take further money off HNZ. As if private landlords don’t already get enough subsidsation through accommodation supplement and the tax system.

    So three actions designed to destroy state housing.

    Align that to the separation of assessment of need from the delivery and the maintenance of the houses themselves, look back at the 80’s and 90’s and you would reach a logical conclusion that if National gets in next term the whole housing stock will be up for sale. – cause you know there’s no f’n alternative.

    Completing what Labour started – the complete destruction of the state except for politicians, policing and imprisonment.

    Remember part of the strategy will be to make it too expensive (in theory) to get the housing sold off back or to rebuild. Just like Labour bulldozed the hospital wards or the railway workshops as quickly as they could once they closed them.

    These pricks know how to destroy.

  10. RRM 11

    People complain that old state houses are damp and cold.

    So the Govt sells the old state houses to fund the construction of new better state houses.

    And what message does the left take from that?

    “ZOMFG John Key is SELLING STATE HOUSES!”

    For goodness’ sake…

    • Descendant Of Sssmith 11.1

      The housing are being sold to pay an increased dividend to the government.

      Along the way some new houses are being built.

      The total state housing stock continues to decline.

      You don’t need to sell a house to make it warm or to rebuild it.

      Most state houses aren’t cold or damp and they have done people very well for generations.

      The state housing stock should have increased in line with population growth but has not.

    • TeWhareWhero 11.2

      Ah, so the government is selling damp, cold State houses to poor people or to landlords who will rent them to poor people. That’s as sensible as it is humane.

      “….to fund the construction of new better state houses” – you clearly know something I don’t.

      The sale of social housing is another one of those monetarist practical jokes.

      So that poor people can get onto the housing ladder, the State sells them something that they already part own. The poor people borrow money from private banks thus making themselves perpetual debtors and paying a fortune in interest and opportunity costs, and hostage to interest rates. Unless they can make a significant capital gain on selling the house (unlikely unless they have been able to improve it and the neighbourhood in which it’s located) they are worse off than they would have been in social housing – or even in a good quality private rental.

      A lot of social housing is sold on a ‘buy to rent’ basis, and all those reality TV programmes that talk up the buy to rent boom as a great thing are careful to avoid giving any air time to the slum landlords and those who have made squillions from buying social housing in prime locations. Their function is to perpeutate the notion that it’s all about empowering the ‘Mum and Dad’ investor – another one of those chimeras.

      • miravox 11.2.1

        “So that poor people can get onto the housing ladder, the State sells them something that they already part own.”

        They can’t even get a chance to buy the houses they already part own. Even if the poor could get the mortgage they needed for their first home the property vultures snap houses up far too quickly.

    • Jackal 11.3

      There’s a few paragraphs you missed out there RRM.

      People complain that old state houses are damp and cold.

      But instead of making those houses watertight and liveable again for the thousands of eligible New Zealander’s needing assistance, National decides to have a fire sale. They also cut the amount of state houses being built and spin this socially destructive policy with their usual propaganda that is happily promoted by a compliant and biased media. The forced evictions see very little coverage and because they predominantly affect people who wouldn’t normally vote for the Natz anyway, they simply don’t care.

      So the Govt sells the old state houses to fund the construction of new better state houses.

      However the government only manages to sell a few state houses to their rich mates that are in prime locations leaving many thousands of houses empty after their forced evictions. Some of these get vandalized making them even less desirable for investors and house hunters. Many of these former homes are then demolished and not replaced by any type of new build. That’s why the overall amount of state houses is in decline under this right wing government.

      Between 2008 and 2011 the overall state houses available declined by 171. National also managed to increase the amount of vacant state houses by a whopping 471 in the same time period. 256 houses were demolished.

      But don’t let these facts get in the way of your blind devotion to John Key RRM…egg!

      • RRM 11.3.1

        “However the government only manages to sell a few state houses to their rich mates that are in prime locations leaving many thousands of houses empty after their forced evictions.”

        State houses should not be in prime locations. They should be in cheap locations, so that the available funds can stretch to as many state houses as possible. The goal of state housing is to provide roofs over needy heads, not to provide a swish lifestyle to those who can’t afford to pay for it.

        “But don’t let these facts get in the way of your blind devotion to John Key RRM…egg!”

        I have a small framed photo of Dr Cullen in the living room of our house, because without Kiwisaver we would never have got our deposit together in the time we did, and we’d still be renting right now.

        We also have a coarse mat outside the front door, where visitors can wipe their prejudices off their boots before they com inside. Egg.

        • RedLogix 11.3.1.1

          State houses should not be in prime locations. They should be in cheap locations, so that the available funds can stretch to as many state houses as possible.

          Which indeed they originally were as a rule.

        • Te Reo Putake 11.3.1.2

          Jeez, learn some history, why doncha. The first wave of state houses were built in areas that were, at the time, far from being prime locations. Many still are in lower socio economic areas, but, as our cities have grown, some state house areas have become prime real estate indirectly and unintentionally (cf Orakei). If this Government was into selling the now desirable houses in order to build many more, I’d be Ok with it. But they ain’t. They despise the poor, something you probably have in common with them.

        • Jackal 11.3.1.3

          Segregation based on income isn’t very forward thinking RRM.

  11. RRM 12

    “The poor people borrow money from private banks thus making themselves perpetual debtors and paying a fortune in interest and opportunity costs, and hostage to interest rates.”

    Oh, I see, you’re a child. It all makes sense now.

    Houses cost what they cost. If you can’t afford to pay cash for one, (and who can?) there is a competitive market of banks who will loan you a hell of a lot of money, if they like the look of you, and the interest rates on this have NEVER been lower.

    If you don’t want to be a part of that, then don’t. Some of the most astute young guys I know are renting as cheaply as they can, staying out of debt, and putting their savings into shares or managed funds or other things rather than paying off a mortgage just because that’s what other people do. Do you know WHY you want to buy into this owning the roof over your head lark? Are you sure?

    Don’t be a victim, don’t pretend your woes are all due to some malign big bastard pulling the strings, that belief will get you nowhere.

    • RedLogix 12.1

      Well I remember that my parents purchased a very nice house in a very good part of Epsom about 40 years ago for $18,000. (And when I mean nice I mean that I my paper boy run cut through Government House.)

      Now if I apply the CPI over those 40 years General Inflation has increased about 10 times, wages about 13 times and the value of that house about 110 times. Where do you think all that extra money came from RRM?

      And here is the fascinating thing. That house originally cost about 1300 Pounds to build some 70 years ago. The section would have been a few hundred quid. Yet in the intervening years the banks have taken in a total mortgage interest on that property in the order of many, many millions of dollars.

      A very peculiar system really.

      • joe90 12.1.1

        Same, in 1981 earning $157 a week and a first home at $23,000 was three years nett income. The same house is on the market today at $265,000 – eight years nett income according to the inflation calculator.

        • dave 12.1.1.1

          you got it Joe house should cost no more that 3x income that is affordable debt can be serviced
          us housing market collapsed at 5 x income Auckland is at 10 x income jesse columbo has got it right kaboom is coming!

    • TeWhareWhero 12.2

      “Oh, I see, you’re a child. It all makes sense now.”

      Out of the mouths of babes and all that.

      The rest of your post doesn’t make much more sense.

    • blue leopard 12.3

      RRM,

      There is a social issue involved with high house prices and decreasing ownership.

      Those that rent are more likely to fall under the poverty threshold.
      Those who are using mortgages to buy when house prices are high – have less disposable income – are putting their money into banks (banks profit) – this means less custom for businesses.

      The Poverty Measurement Project discovered that if you are retired and don’t own a house you are more likely to be under the poverty threshold. Therefore this issues feeds into the whole issue of the financial cost of ensuring retired people are well catered for.

      i.e. This issue of increasing house prices, speculating on houses so that an individual (or one family) profits, and decreasing home ownership is at the expense of many and the county’s economy as a whole – it is leading to greater levels of poverty and increasing inequality.

  12. Marius 13

    Marcus Lush asked John Key in an interview a couple of days out from last Christmas if it is a busy time of year for the Key family. ‘Yes’ replied the pm – ‘Bronnie’s putting up the Christmas tree which is always a busy time – but that’s ok, a couple of guys from the store are delivering it and will help her set it up’. Waaaahhh the stress.

  13. Jim47 14

    First of all I want to say that I saw D.C on tele this morning at the ANZAC service so that should encourage him that he was not left out .(poor we thing).
    Second when you report on news paper articles you should report on the whole article and not be shifty like your leader .
    When referring to diverdents the article pointed out that under labour they were higher than under national.
    Also it said that the selling of the houses to build better ones ,that money was not part of the diverdent nor was the insurance money from the earthquake .
    As far as Micky savage and co was in the thirties they would not have bar of what the Labour Party is today as a matter of fact they would be rolling in their graves.
    My grandfather was an original member of the Labour Party and what he and my grandmother told me as I grew up is nothing like you are presenting now.
    Any way to harp back to the thirties in the hope that you will get some votes isn’t going to work.
    I started voting labour but never again.
    This country needs an effective opposition and we have not got one.
    The worry is that it is going to be the greens soon and that is more concern than what we have now.

    [lprent: Perhaps you should read the post. It was written by karol who isn’t a member of any party and generally couldn’t be regarded as a Labour party supporter. So trying to suggest that she regards David Cunliffe as her “leader” would have to be one of the more pig-ignorant statements by a concern troll that I have seen recently.

    Looking through the rest of the waffle in your comment. It shows the same care and attention to detail. For instance it was talking about some letters in 2011.

    Basically I’d say you are simply lying through the whole thing – just as you have in the past under other names.

    We really do need to encourage a better informed level of trolling ]

    • greywarbler 14.1

      Jim47
      You’re a twit – why don;’t you go out and dig the garden like your wise old parents taught you to knowing that you would never be one to make it relying on your mental acumen.
      My grandfather was an original member of the Labour Party and what he and my grandmother told me as I grew up is nothing like you are presenting now.
      Any way to harp back to the thirties in the hope that you will get some votes isn’t going to work.
      I started voting labour but never again.

      Yet so many commenters here are harping back to what their wise old grandfathers and mothers and fathers et al told them and Labour don’t know what they are saying or doing and the Greens might overwhelm us and oh dear i don’t know how we had the strength and bravery as a country to fight in two world wars because we are so scared of people like the greens who would like to save our environment and our country from being a waste land and us all becoming unemployed and barefoot as so many did during the Depression. That needed a World War to get through to our drongoes of right wing politicians. The cure is as bad as the disease. Wouldn’t it be good if we could do things better now Jim47?

      Here is a song about this sort of thing, not to play with the gypsies in the wood! If you are too slow to pick up the analogy, the gypsies are in this case like your attitude to the Greens.

  14. greywarbler 15

    The religious fellow was talking about housing at the memorial service I went to! It would be ‘naice’ to hear some real negative emotion about war and approved killing at these ritual remembrances, and also about a happy future to aim for, caring for each other in a practical way by organising jobs and housing as was done for the returned servicemen.

    John 14.2
    New International Version
    My Father’s house has many rooms; if that were not so, would I have told you that I am going there to prepare a place for you?

    (Did others hear the interview about the background to the book The Land Girls about the wonderful young women, facing dislike, suspicion, prejudice at times, who went and learned to do the hard jobs helping to grow the food so desperately needed?)

  15. Awww 16

    Here is an interested TM discussion regarding commercial lending rates for residential landlords. Sounds like people owning more than 5 properties have already found ways around this so that it hasn’t actually discouraged people from owning multiple properties (and therefore pushing the price up due to demand) after all.

    http://www.trademe.co.nz/Community/MessageBoard/Messages.aspx?id=1418559&topic=21

  16. greywarbler 17

    Red Logix may like to comment on this from Awwwv at 16.

  17. RedBaronCV 18

    What’s with this government and leaving large amounts of state housing empty? Generally they seeem to be saying it is not up to earthquake standard, and I’m sure they are not up to the new earthquake standards, along with needing insulation and yes they may be houses nearing the end of their life. But if chimmnys are taken down, as they a major earthquake worry, then surely these houses are still better and safer than a garage, the back of a car, staying on in a refuge, another overcrowded house etc.etc amd would provide a better and surely cheaper roof over people’s heads than many of them now have?

    For goodness sake private owners and landlords are not clearing themselves or tenants out of houses for earthquake standards.
    Looks like NACT excuses not a real reason.

  18. Ad 19

    Top work Twyford.

    If a new progressive govt spent much of its political capital tilting NZ real estate capitalism through Capital Gains Tax, foreign owner restriction, house building policy, and reforming HNZ, that would be a fair terms’ work (would have to be root and branch and HNZ).

    All power to you Phil.

  19. Thanks for posting on this Karol. Just had a chance to catch up with it. Some responses to various points made above:

    The important thing here is that since it came to office National have made a net withdrawal of $216m from Housing NZ, and are budgeting to take out another $252m over the next three years. They are asset stripping Housing NZ in the middle of a housing crisis.
    Nick Smith’s defence that Labour took out a big dividend in one year ($176m in 2002) is pathetic. During its years in office the 5th Labour Government made a net injection of $430m.
    The OIA documents show Housing NZ intended to fund the dividends Ministers were demanding by using money from the Canterbury earthquake payout, cutting front line staff shutting offices and making tenants use an 0800 number to contact the organisation, and delaying repairs and maintenance of state houses.
    National have also reduced the total number of state houses by 700 over the past year. Waiting lists have blown out to 5000, and there are about 3000 state houses lying empty.
    They are taking away security, perhaps the most important aspect of state housing – rolling out tenancy reviews for all state house tenants including pensioners, the sick and disabled, and families with young children.
    Under National, Housing NZ have undertaken a series of “redevelopment” projects in Glen Innes, Maraenui and Pomare where tenants have been evicted with no commitment that they will be able to return to their community.
    We need more state and social housing. Labour will announce policy on this in the next few months.
    We will also:

    * implement a Capital Gains Tax excluding the family home
    * restrict purchase of residential property to NZ citizens and residents
    * build 100,000 affordable homes for first home buyers
    * legislate minimum standards for heating and insulation for all rental properties.

    • miravox 20.1

      <a href=”http://www.stuff.co.nz/national/9980030/Priority-family-living-in-tent>Meantime, a brighter future

      Great to see Phil commenting and I applaud the policies that will improve housing affordability. However, Murray Olsen (below) is right, imo. A concerted effort to provide better social housing is urgent. I’m saying this from a position to compare the 60% social housing in the city, rent controls, long-term leases and proactive housing research and State-led development for future housing needs in Vienna with the free-for-all developers and landlords and decline in social housing in New Zealand.

      Any housing policy that can’t urgently address the housing needs of the Houia family is unconscionably lacking. Just appalling. I cannot believe that people will vote for a government that will not address the basic need of people for affordable, safe housing. Basic, basic stuff.

    • karol 20.2

      Thanks for the added information and clarification, Phil.

      I am pleased to hear that Labour will be announcing something about the need for more state and social housing. I am hoping it will include a substantial state housing building programme.

      Good work on the OIA.

  20. Murray Olsen 21

    The housing problem is urgent and I can’t see any way out of it other than a large state house building program. This would also have payoffs in terms of health, employment, and education. There is no downside. Programs helping young professionals into ownership of $300k or $400k just don’t cut the mustard and may actually do a lot of harm by pushing minimum prices up. Capital gains tax is also just playing around the edges, as is cutting back on foreign speculators. Even without them, prices are already so high because of the perverted distribution of wealth in Aotearoa that many people will still be locked out.

    In the meantime, an IRD actually interested in catching tax evaders could maybe read Trademe and arrange for the people boasting about their trickiness to have a chat with the Serious Fraud Office. A few confiscations of the proceeds of crime, including digging into trusts, would soon see these creeps on their best behaviour. However, taking money off beneficiaries who’ve dared to accept an air ticket seems to be much more of a priority.

  21. Treetop 22

    As an interim measure the accommodation supplement needs to be increased, (those who are really struggling would benefit the most).

    The housing stock (both public/private and single/family) needs to be increased without further delay. Single accommodation targets those with complex health needs and an aging population. Family accommodation keeps children at school, away from the GP/hospital and carers of children can reduce their stress due to reduced accommodation costs.

    In every aspect of housing the government has not delivered and they will continue to go backwards due to their USELESS housing policies.

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