NRT: Wealth transfer

11 comments on “NRT: Wealth transfer ”

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1. Ian H 1

   5 November 2014 at 10:22 am

   Every intervention provokes a market reaction – usually an undesirable one.

   Paying rent support props up rents and can become a subsidy for landlords. The worst case is that rents rise until the subsidy is totally captured by landlords and those at whom the subsidy is targeted are no better off.

   But building more State houses also provokes a market reaction and can destroy the low cost housing market. Who will build and rent cheap apartments when they face being undercut by the government building and renting at below cost. The worst case is the kind of distorted market often found in communist countries where prices are artificially low but there is a massive waiting list and a shortage.

   Strange that you can see the potential negative effects of National’s policy but can’t see the potential problems with Labour’s.
   • Molly 1.1

     5 November 2014 at 10:50 am

     What “low cost” housing market?

     And surely that is the point of private business, to see opportunities when they arise and provide a good or service to meet that need, not to have a fundamental requirement for good quality of life (affordable, healthy homes and communities) be underprovided by a myriad of government policies so that they can run a profitable business?
   • NickS 1.2

     5 November 2014 at 11:27 am

     What low cost housing market? Do you mean the one that doesn’t exist in any of the main centres, or is it the multi-hour commute, middle of nowhere rural market?

     Because what public housing does is target the slum housing market and make it so the poor having a decent, weathertight and usually warm (especially these days, or with a insulation retrofit in the older ones) house that is cheap to live in and usually well sited vis amenities, transport and work. Fuck, before state housing was brought in NZ had slums of poorly maintained, overcrowded houses and the charities couldn’t cope even with significant donations.

     But hey, why give a shit about people who are in a tough situation when they can provide a tidy profit to slum landlords instead? And lets just ignore all the health and other costs of such a situation as well, because teh market is so totes more important than such things T_T
     • b waghorn 1.2.1

       5 November 2014 at 7:09 pm

       Keys no fool a large number of his voter base owns rentals he knows he only has to keep 37% of the population happy
   • BassGuy 1.3

     5 November 2014 at 11:52 am

     You appear to be suggesting that competition doesn’t work in the housing market by asking “Who will build and rent cheap apartments when they face being undercut by the government building and renting at below cost?” State housing is meant to provide a safety net – it’s an option for those who can’t afford anything else, it’s not there to offer cheap accommodation to those who can afford suitable housing at market rents.

     I also doubt that too many landlords build their own properties. From what I’ve seen, they mostly buy and rent existing housing, which appears to be one cause of the current problem.
   • greywarshark 1.4

     5 November 2014 at 11:57 am

     @ Ian H
     Woe is me. Wise sage say nothing ever works perfectly. We are helpless in the face of the force of nature which is the market!

     We have only just enough brains and nous to introduce this economic system which acts to siphon off money and advantage to a small percentage of the population. But then no brains left to manage the system to meet everybody else’s (the majority’s) needs.

     It’s Hairy Macleary off with all the sausages, followed by all the bloodhounds
     and none left at the butcher’s shop for the rest of the population. Oh we could provide sausages for the others but we wouldn’t have enough. So we won’t do anything practical to bridge the problem. We might have to ration them and have something else temporary for other needy ones in the meantime, but that’s a lot of work and requires decision making and co-operation. Those aren’t nice neo lib practices, which prefer serendipity, thieving-magpie-looking-for-shiny-opportunities behaviour by speculators, otherwise called wealth creators.

     Funny story, this child’s play economy we live in. Then after we build houses three little pigs will come in and blow them all away. The profit motive, the abandonment to private enterprise of public policy planning and infrastructure, and the willingness to adopt Depression austerity on the poor, strugglers, those unconnected to the closed Pneumatic Tube System that sucks and transports money from one site to another.

     These tube systems might be useful again for some businesses.
     http://buispost.eu/pneumatic-tube-system/what-is-a-pneumatic-tube-system
     • Ian H 1.4.1

       5 November 2014 at 3:04 pm

       I like the way you used Hairy Maclary, the Three Little Pigs and Pneumatic Tubes to make your argument. Very creative. However you seem to be suggesting that I believe things that I do not. Markets are not Gods and I’m not one of the fools who worships them. There was a market for slaves once. However markets can be powerful tools if used properly.

       We have a market economy and Labour has not advocated changing that. If Labour wants a centrally controlled economy like the one they had in the old USSR then it should say so, so that we’ll all know not to vote for Labour. A market economy complicates things because you have to consider not only the direct effects of any government action but also the indirect effects due to market reaction.

       At the moment the housing market isn’t delivering the kind of outcomes we all want. National wants to intervene in one way. Labour in another. Each has merit and each has potential negative effects due to market reaction. Neither provides a perfect answer. However both approaches would help in the short term. The better solution though is to figure out what is currently broken in the low cost housing market and fix it. Why is it that we don’t we see the large scale construction of low cost apartments in our cities like you see elsewhere in the world?
       • b waghorn 1.4.1.1

         5 November 2014 at 7:17 pm

         re figureing out whats broken .how about banks lending way more than houses are worth there buy inflating prices for a start
2. tricle up 2

   5 November 2014 at 11:04 am

   Proposed measures like this are just floating confidence filling a gap in time.Turning the problem a little bit sideways doesn’t help it need to be turned right around with some regulations on the free market .Control does rest with us but with our masters who think for us. Why shouldn’t they tackle the hard act of re-balancing or is the issue about balancing popularity and government cash.What a dinosaur these tax cuts have been, play money for the well of who’s freedom to gamble up has manifested on our social structures . toxic money in the system.
   • Ian H 2.1

     5 November 2014 at 1:57 pm

     How will regulations on the free market help with the housing shortage? What type of regulation would you suggest to compel the construction of more housing.
     • Murray Rawshark 2.1.1

       6 November 2014 at 1:50 am

       I don’t want regulations. I want a huge state house building program. I do not want a country where unscrupulous pricks can rent out caravans and garages and that becomes the best option for many people. The free market needs castration. All it does is breed misery, violence, and crime for an increasing number.

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