Key’s housing plan “moronic”

Written By: - Date published: 2:51 pm, June 1st, 2016 - 25 comments
Categories: housing, john key - Tags: , ,

On RNZ today – PM’s housing plan moronic – economist

Prime Minister John Key’s suggestion that Auckland Council could be forced to free up more land for housing whenever homes became unaffordable in the city is already being criticised as misguided and unlikely to help the city’s housing woes

Mr Key hinted a price-to-income ratio could be used to force local authorities to release land for new housing if house prices climbed too far out of people’s reach.

He told Morning Report such a tool could be in the pipeline.

But critics said more land was not the answer to Auckland’s woes.

Economist Shamubeel Eaqub said using a price-to-income ratio to control house prices was “moronic”.

“I don’t think it will work. The real challenge is, how do you pay for infrastructure? And how do you make sure that the land that is being released is being built on?”

There was already plenty of land supply but not enough homes and what was required were concrete ways to encourage more homes to be built, Mr Eaqub said.

It’s moronic because it isn’t a housing policy at all, it’s a blame deflecting plan – Housing game-changer: Spreading the blame

What’s become clear is that Auckland’s problem is no longer a land supply problem, it’s a house supply problem. The Special Housing Areas have opened up over 50,000 sections according to the government, but only 1000 houses have been built. Even Auckland Council estimates six and a half years worth of land is ready to build on. What’s missing is a will (or requirement) to build, tradie capacity and, arguably, a government commitment to a mass building programme.

Instead, what we’ve got from National seems to be an admission any fix on Auckland house prices is years away and what matters to them now is spreading the blame.

Blaming the council doesn’t build any houses and doesn’t get any families off the streets.

25 comments on “Key’s housing plan “moronic””

  1. Lanthanide 1

    When the council releases a block of land to a developer, charge the first years rates at the normal amount.

    2nd years rates are double, if no house is built or no active development underway. 3rd years rates are triple. 4th years rates are 4x, etc.

    Pretty quickly it becomes uneconomic to land bank.

    If linear scaling isn’t enough, use quadratic: double rates, then quadruple, then octuple, then hexidecituple etc.

    • Rocco Siffredi 1.1

      That’ll have some interesting unintended consequences…..

    • AsleepWhileWalking 1.2

      Great idea.

      I’d like to see the government actively reclaiming houses that remain unoccupied for extended time periods.

      We have use to every tool we can to prevent further social harm.

      • dukeofurl 1.2.1

        Too stupid for words. The PMs stupidity shouldnt be followed by more of the same

    • Chris 1.3

      Does Key really believe that people won’t see through his cronyism?

      • Mosa 1.3.1

        On RNZ he doesn’t think there is audience so he just makes up crap and lefties don’t count I mean it’s not ZB and Horrible Hosking or a dumb ZM station its RNZ.

    • Treetop 1.4

      Great idea.

  2. Ad 2

    If the Prime Minister keeps pulling this mess closer to himself, and then makes the spectacularly dumb move of suspending the 2016 Auckland elections, he will have simply have generated the largest government entity outside of the NZDF.

    And then all the hard work of actually running a city becomes his. All the blame for housing becomes his. All the blame for transport becomes his. All the blame for rates becomes his. All the blame for the prioritisation and setting of budget becomes his. All the corporate governance of Watercare, ATEED, Auckland Transport, the port, the airport shareholding, etc etc.

    The downside of nationalising Auckland – because that’s the effect – is that John Key himself will hold the lightning rod for the entire thing.

    John Key had better be very careful what he is asking for.

    • dukeofurl 2.1

      Creating SHA areas was like asking farmers to grow more rice. But the farmers soon found if they stockpiled the rice…. the value went up.

      Last year they said any SHA that hadnt proceeded within 2 years would be cancelled.
      Apparently they have recently backed down on that as they just faced a ‘development strike’ till they did an backflip

    • Kevin 2.2

      One of his first moves would probably be a fire sale of the city’s assets. After that, he probably wouldn’t care. He has done what he set out to do.

      • madtom 2.2.1

        Sad but true. For our current rulers, any and all kinds of turmoil are just great looting opportunities.

        Solving problems isn’t half as profitable as creating and exploiting them. At least not if you’re only looking at the dollars in your secret accounts, hidden from the taxman and your countrymen.

        • madtom

          Has everyone forgotten who designed the unworkable structure of the “Supercity” government? And who imposed it on us all with zero consultation and no way to vote on it?

          But of course all its problems are our fault, not his.

          So we get to pay in dollars, lost local control, and hours wasted crawling along the overcrowded roads. While somebody, somewhere, buys luxury houses in Hawaii with our ripped off dollars.

  3. TC 3

    Selling state houses would seem moronic also putting aside the fact they lied at the GE about not selling anymore state assets.

    Have they not been paying CT’s bills as I expected some quality smoke n mirrors by now rather than snarky dictatorial shonky.

    Time someone showed him how much akl got ripped off by the last national govt in terms of tax taken on RUC etc v infrastructure spend. Or he could ask williamson who presided over it.

  4. Barfly 4

    “Business as usual”

  5. AmaKiwi 5

    Builders make big profits on large, lavish houses. They make very little on small, bare bones houses that lower income people can afford.

    Affordable basic houses will only be built by the government itself or with government incentives. Key can’t do that because it’s neoliberal blasphemy.

  6. save nz 6

    Key’s housing plan “moronic”

    Yep!!! +100

    And now the threat of dictatorship on Auckland. How much more interference can this government make on Auckland? We have already had the supercity disaster.

    This government are incompetent control freaks.

    • greywarshark 6.1

      save NZ
      This government are control freaks. That is their main competency,. It is utilised very religiously, into controlling the people to disable them, but enabling the control of money to advantage themselves, friends, their general moneyed class clan and temporarily useful persons.

  7. Hmmmm…. health , housing… unemployment ….

  8. Philj 8

    It’s a veneer of government. If it looks,smells, tastes like corporate interest then that’s what it is.

  9. greywarshark 9

    Housing provided by our government for its needy citizens! This shows Nick Smith’s interest in doing that, even in his home electorate. Like nil. Till enough people start making a fuss. What else can we make a fuss about!

    Nelson Mail 1 June 2016
    After eight years sitting empty and more than $500,000 in renovations a Child Youth and Family (CYF) home in Nelson will finally be tenanted.
    The eight-bedroom house at 71 Green St in Tahunanui was leased by the Ministry of Social Development to the Nelson Tasman Housing Trust last week to use for social housing purposes.

    With the exception of a few months in 2009 and 2010 when it was used by an Open Home Foundation foster family, the house has been unoccupied since 2007.

  10. Jack Ramaka 10

    Land prices have got so expensive in Auckland it is not economic to build low cost housing and costs of development are too high with exorbidant Council costs $130k to subdivide plus additional funding costs due to Council delaying tactic, the risk of building is high and the banks don’t like taking the risk either?

    • AmaKiwi 10.1

      It is NEVER economic to build LOW cost housing.

      The big profits are in building big, opulent houses.

  11. M. Gray 11

    that’s what happens when you open the flood gates and we are open for business as our dear leader has told the world who cares if Kiwis are living in their cars its there own fault yeah right !

  12. Smilin 12

    What do you expect from a PM who’s never done anything but make money for a fraudulent system an borrowed and sold the country into the poor house and bolstered his ego with wimpy sound bytes on the MSM until we are all screaming
    Fuck off we want our country back

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