On the tip of his tongue

Written By: James Henderson - Date published: 9:26 am, October 30th, 2012 - 36 comments
Categories: bill english, housing - Tags:

It was almost funny listening to Bill English on Checkpoint. He had identified all, or at least most of, the problems with housing in Auckland: in short, nobody’s building affordable houses, the prevelance of bespoke houses pushes up prices, and speculative capital raises them even more. But his solutions were all, well, not solutions. Try to make consenting (which is quick by international standards) even quicker, more sprawl.

He was particularly funny on the bespoke housing issue. I’ll paraphrase because I can’t be bothered transcribing but, basically, he said ‘the problem is, we don’t have much in the way of large scale developers’. Hmm, I thought. If only Mr English knew of a large organisation, say the largest homeowner in New Zealand, that has historically taken the lead in development. Then, English reiterated his line that no-one’s been building entry-level homes since the 1970s. And I thought, hmmm, I wonder who was building all those entry level homes before the neoliberal revolution and whether that organisation might still be around. To round it off, his lamented that there was no-one with the capital needed for this scale of work and that there was a danger that, left to the private-sector developers, Christchurch would be rebuilt with expensive sprawl housing that no-one could afford to buy.

It was funny because the answer was right in front of him – as finance minister it is literally at his fingertips – but his ideological blinkers prevented him from seeing them.

Get the bloody government to do it, Bill. You own plenty of land, you’ve got the capital, and the State isn’t (or shouldn’t be) out to make a quick buck so it can do low-return affordable housing. Just do what the State used to do – come up with a few dozen (energy-efficient, eco-friendly) modular designs and get building.

With efficiencies of scale, you can get the homes built for around $200,000 each (that’s what a basic eco-home from Lockwood costs). Think of the number of houses that a billion a year could build – and that’s chump change to a government that has spent $280 billion in four years. And how many jobs would that create?

It’s sensible, simple, and we’ve done it before the neoliberal revolution (in other words, just the kind of idea that sends Granny Herald into fits). But English just can’t go there. It’ll work but he would rather come up with his ‘do nothing’ plan and fail, just as he has on the economy.

We need a government that can go there, that can adopt sensible, economic, and sustainable solutions on housing.

36 comments on “On the tip of his tongue ”

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vto 1

30 October 2012 at 9:36 am

Good post James.

100 to 120 m2 houses at around $1,500 m2 – you’ll get them done for under $200,000. No need for fancy this and that, just straight forward build. Don’t need a garage.

Bill English is either thick or ideologically blind.
- One Tāne Huna 1.1
  
  30 October 2012 at 9:43 am
  
  either thick or ideologically blind.
  
  The former probably begets the latter.
  - Draco T Bastard 1.1.1
    
    30 October 2012 at 12:27 pm
    
    +1
- aerobubble 1.2
  
  30 October 2012 at 9:48 am
  
  Worse. English made the open promise that he would do nothing about it when he said it will take years to turn around (i.e. not on his watch buddy). When added to the obvious he’ll do nothing to change the macro-economic incentives (CGT) or deal to the micro-economic problems (since that Auckland councils problem). The only thing that changed was he was moved to recognize the problem, wait, how long has he been in government, how long has the housing bubble been on the radar? No, worse! English is essentially admitting Key’s government will lose the election because obviously Key’s finance minister would not be out in front undermining Key so spectacularly. Reminds me of the other English bid to undermine Key, when he commented on the costs of imprisonment.
  
  Key is a pathetic PM. PM serve all the people, and young people need homes, so start building them damnit, rich people want profits, young need homes to have families in so that rich people can make profits.
  - vto 1.2.1
    
    30 October 2012 at 9:55 am
    
    Yep aero, it seems Bill English could learn a lesson or two from Henry Ford who was credited with improving the lot of the poorer…. so that they could buy his cars!
    - aerobubble 1.2.1.1
      
      31 October 2012 at 2:17 pm
      
      Hey! Ford was a capitalist, he knew he needed higher wages for his consumers. English and Key are their lordships, as long as their Lordships are earning who gives a toss that the serfs aren’t getting enough food, or living in damp ghettos.
- Rob 1.3
  
  30 October 2012 at 4:17 pm
  
  Lets hope they would be an improvement on the un-insulated , asbestos – fibro planked long stilt houses from the 70’s.
  - McFlock 1.3.1
    
    30 October 2012 at 6:00 pm
    
    and the leaky black mould incubators of the 1990s.
- infused 1.4
  
  30 October 2012 at 5:26 pm
  
  Have you built a house recently? My dad just finished his. He said to me, building it yourself, you save nothing.
  
  They are building cheap houses around where I live… they basically have a 10 year life span. go go cheap housing.
  - Rob 1.4.1
    
    31 October 2012 at 2:21 pm
    
    Really , a 10 year life span, so they dont comply with the Durability Clause in the building code where all structural items must have a durability of 50 years. Interesting.
ianmac 2

30 October 2012 at 9:53 am

Decades ago the State Advances loaned money for basic housing at about 3% interest. As long as basic restrictions were followed the house was built. Whatever happened to that and could the Government restart it? Maybe a good platform for Labour/Greens? It was possible capitalise the Child Allowance too which was a step up. But no Child Allowance these days.
- the pink postman 2.1
  
  30 October 2012 at 4:18 pm
  
  ianmac.
  
  A wonderfull scheme .Labour should have bought it back as soon as they were returned.Rather sad that they did not . Let’s hope the next Labour led governmment does bring something simular back
  and enables working people to buy a decent house with out going bankrupt. A whole package is needed that makes loans payable has insurance and makes sure the house is built without faults like leaking aand lax building practice .Older members will rememberv the building inspectors State Housing loans had attached . No building fault passed their beady eye . Result well built comfortable houses owned by working people. The envy of the world. Bring it back..
  - PlanetOrphan 2.1.1
    
    30 October 2012 at 4:22 pm
    
    +1
ianmac 3

30 October 2012 at 9:56 am

The Key/English Plan? Cartoon Herald tells it all.
http://www.nzherald.co.nz/news-cartoons/news/article.cfm?c_id=500814&objectid=10843766
vto 4

30 October 2012 at 9:57 am

This government is providing up to $400 million for a few farmers to irrigate their land in Canterbury.

So how about a similarly large scaled building programme of housing?

The poor are not their voters that’s why.
- tracey 4.1
  
  30 October 2012 at 4:00 pm
  
  while selling our eco systems down the river (pun intended)… farmers who choose to run dairy cows on land that is subject to drought or is arid deserve no assistance… this is subsidising bad business choices.
  - Glg 4.1.1
    
    30 October 2012 at 5:46 pm
    
    And they were warned years ago the land could not sustain intensive farming.
shorts 5

30 October 2012 at 10:23 am

all well and good and I agree with your points… but will the opposition parties be doing or promoting such solutions? Or will it just be financial tinkering (capital gains tax et al) to address the over pricing issue they push?

I’d suggest any policy that gives those on lower incomes a chance of home ownership and some basic security might just get many who didn’t vote last time round out and voting again – ie actual real hope for a better future for them and their kids
karol 6

30 October 2012 at 11:06 am

If Bill can’t quite find the words for what to do, he should talk to Paula Bennett. According to Mana, they want a Paula Bennett Housing Policy. It goes like this:

In an interview early in her political career Social Development Minister explained her circumstances to a journalist who reported it like this:

“When she was only 19, Paula Bennett was on the Domestic Purposes Benefit but was able to buy her own home in Taupo with a Housing Corporation loan for $56,000. Bennett said she’d worked part-time but that she “pretty much fell apart because I was exhausted and I went back on the DPB”.”

I would go for the increase of state housing option, and provide more homes for rent generally at affordable rents.
Draco T Bastard 7

30 October 2012 at 12:26 pm

You own plenty of land, you’ve got the capital, and the State isn’t (or shouldn’t be) out to make a quick buck so it can do low-return affordable housing.

The state doesn’t need a return – just enough to cover maintenance. That’s why the capitalists don’t like the government doing stuff as they will lose out as everyone goes for the much cheaper and just as good government supplied houses.

We need a government that can go there, that can adopt sensible, economic, and sustainable solutions on housing.

So, one with neither National nor Labour leading it.
ghostwhowalksnz 8

30 October 2012 at 1:34 pm

You could build a house for $1200 to $1400 per sq m if you sought out and paid for each sub contractor yourself.
A major builder charges about $2200 per sq m for the same work. And they can get even better prices than above. Effectively its a 50% markup just for managing the site and paying the bills
- KJT 8.1
  
  31 October 2012 at 12:35 pm
  
  That is bollocks.
  
  A builder is lucky to get 10% over wages, for himself, on a build.
  
  Not really a good return for chasing up all the contractors and holding liability for the guarantee.
  
  You are looking in the wrong place.
  
  Houses are cheaper in Australia even though builders get nearly double the wages.
  
  However it is possible to build a decent 3 bedroom for under 150k.
  
  Or it was when builders were allowed to design.
  
  The right answer to affordable housing is above. Return to State houses. Preferably financed by ourselves, not overseas borrowing.
  Getting rid of the building supplies duopoly wouldn’t hurt also!
  
  Worked a treat from 1935 until the neo-liberal thieves decided to de-construct our society.
s y d 9

30 October 2012 at 1:52 pm

Nothing to do with housing, all to do with LAND…..the whole affordable housing issue is simply a means by which the current landholdings of a few VIP’s (and former MP’s) can be compulsorily re-zoned from rural to residential, providing a short term massive windfall profit (e.g Tauranga land values – rural $10/m2 residential $70/m2 current land values) for the current land shark owners.
See Bob Clarkson’s supposed ‘affordable’ housing scheme on the outskirts of Tauranga……700% returns!! any takers??
tracey 10

30 October 2012 at 3:57 pm

I’m sitting in an office dealing on a daily basis with issues involving, inter alia, large scale developers… they definitely exist. Not sur eif that is a good thing…

I heard him on Checkpoint last night, at least she held his feet tot he fire. I almost got the sense she gave up, could almost see her rolling her eyes. It was another example of

– it doesn’t matter what the question is, my answer will be [insert policy spin here].

Interesting to hear this morning that now it appears affordable doesn’t mean cheaper… just not more expensive… SO with people struggling now on wages that aren’t going up anytime soon, how will this be affordable?

I would also like to see the directors of development companies giving 10 year personal guarantees on their developments. Builders now have to give a ten year personal liability guarantee (by virtue of being Licensed Building Practioners) so why not the developers who make the calls about quality by virtue of the money calls they make… but take profit, wind up company, open a new company and start a new project.

I see NO political will to make this simple change in eithe rof our main parties.
- Draco T Bastard 10.1
  
  30 October 2012 at 4:12 pm
  
  I see NO political will to make this simple change in eithe rof our main parties.
  
  Holding the rich accountable? Not going to happen.
  - tracey 10.1.1
    
    30 October 2012 at 4:29 pm
    
    SIGH – I know it.
- KJT 10.2
  
  31 October 2012 at 12:43 pm
  
  I would like to see building suppliers held to the same warranty.
  
  It would help if those responsible for the last “de-regulation of the building industry” to “cut red tape” were held liable also.
  
  Imagine if politicians, lawyers, company directors and managers and organisations such as f– farmers were held to the same standards of personal liability as builders and ship’s officers??
  - tracey 10.2.1
    
    31 October 2012 at 4:08 pm
    
    +1
    
    Easy enough to do. Make alaw change, they have no problems changing employment law at will.
tracey 11

30 October 2012 at 4:43 pm

Why does Billkeep letting himself carry the can… he’s not housing minister, or good-time minister where are the housing minister and smiling Dunnokeyo to front this GREAT policy to help the poor get homes (like John’s mum)
Richard Down South 12

30 October 2012 at 8:00 pm

Indeed, the govt would make the money from the taxes off PAYE…
peter martin 13

30 October 2012 at 8:10 pm

And why is there not enough capital,Minister?
Because of your short-sighted interest rate policy that you have prescribed for the reserve bank.
Now,if you got the reserve bank to increase interest rates to a level that would attract savings you would at long last see some domestic investment capital being accumulated.
And look,it would also have the not inconsiderable side benefit that you would not have to battle those objectional people that object to you selling our assets overseas.
In other words,Minister,it is the answer to several of your problems.
Willie Getonwithit
Georgecom 14

30 October 2012 at 8:39 pm

English and his Govts whole approach to solving housing can be described this way:

They attempt to make the problems sound like a solution. That is, by explaining at some length the problems with housing affordability, they try to pass that off as their ‘plan’ to combat it. ‘We have identified the issues, therefore, we have explained our plan to overcome it’.

Really, however, yet another example of a ‘do nothing government’ that has plagued NZ for the past 4 years on the issues that really count. A lot of effort spent recounting the issues yet precious little actual solution.
- tracey 14.1
  
  31 October 2012 at 4:11 pm
  
  ….you are right and forgot to add, they cana ct very quickly on employment law changes… then tell us to be patient on others.
Dave Kennedy 15

30 October 2012 at 11:52 pm

Some seventy years ago New Zealand was in a similar situation and one Michael Savage had the solutions. It is about time we learned the lessons from our history: http://localbodies-bsprout.blogspot.co.nz/2012/06/lessons-in-history.html
Morgan 16

31 October 2012 at 9:08 am

The National government also ditched Labour’s assistance to first home buyers, and an act which allowed Council’s to use inclusionary zoning – which requires new developments to include a proportion of affordable housing.

As someone who has worked in government (mainly HNZC) for a while, it is very depressing to see successive governments continually re-identify an existing problem as if it is something brand new, take years to get around to doing something, usually just in time for the government to change and start all over again.

The answers to affordable housing are easy to find, but hard to implement. This is all nothing new, it is not unique to NZ, and has been addressed overseas. And as plenty of people note in the comments – it’s been dealt with here in the past too.