Earlier this year, National attacked the Greens’ Progressive Ownership housing policy, a ‘rent-to-own’ scheme that effectively gives first homebuyers access to the Crown’s low cost of capital (like State Advances used to do). Nat fanboi John Armstrong said “It is a dog of a policy. It should be put out of its misery”. Now, National’s nicked it. The problem is, they’re just doing it on a token scale.
The Weymouth project announced yesterday will see 282 houses built, with 113 for sale at affordable (by Auckland standards, at least) prices. And buyers will be able to pay a basic rent to cover the cost of capital on the houses, the purchase equity over time as they can afford it. That’s the Greens’ policy, with the only difference being it’s community groups providing the rent to own scheme (which means it’s more expensive because of their high cost of borrowing compared to the Crown’s).
The problem with Weymouth is it’s tiny. 113 houses to be completed and sold over four years. We need at least a hundred times that amount. Labour plans nearly four hundred times as many over four years. And that can only happen if the Crown leads. At Weymouth, the Crown is putting up less than a third of the build cost. We need more than that.
Remember, these projects are cost-neutral to the builder – the people living in the houses cover the cost of capital through rents and buy the equity over time. And the net debt effect is neutral because while money needs to be borrowed to fund the builds that’s offset by the creation of a financial asset – ie the rent-to-own agreements.
There’s no excuse for the Government to not do more. Unfortunately, it looks like National’s objective is just to be seen to be ‘doing something’ on affordable housing because the issue is hurting them politically; they’re not interested in doing enough to fix the problem.
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