Open mike 25/05/2024

62 comments on “Open mike 25/05/2024 ”

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1. SPC 1

   25 May 2024 at 10:34 am

   Let's grant Damien the courtesy of a reply to his latest effort at demonstrating the ineptness of what passes for thinking out loud by libertarians.

   He first notes that most of the income received by Kainga Ora for housing its tenants comes from a government rent subsidy top up.

   And suggests because the amount paid by tenants is so much less than that for private market rentals, it would be better for both government and tenants, if they were gifted ownership of their property.

   Thus the government would lose $30B ($45B of asset to remove $15B of debt).

   He seems to fail to note that government can afford the cost of subsidising rent and borrowing to build more housing, because its land and property assets are rising in value – does he know nothing about the value of CG via ownership? How landlords acquire more and more property via leverage?

   Most of our populations wealth is in the rising value of the land and yet he pretends to fail to understand.

   It shows he just does not care about the health of government finances. And wants to divest government of its assets and capability.

   Bill English just wants the coalition to do the same more slowly – less new debt and rising property value portfolio for Kainga Ora and transfer of taxpayer money to other social housing providers.

   https://www.stuff.co.nz/politics/350287662/what-do-problem-kainga-ora
   • AB 1.1

     25 May 2024 at 10:50 am

     It shows he just does not care about the health of government finances. And wants to divest government of its assets and capability

     Yep – and and also true for Luxon, Willis, Seymour etc. The scary talk about debt is just to garner popular support for their real agenda

     Bill English just wants the coalition to do the same more slowly – less new debt and rising property value portfolio for Kainga Ora and transfer of taxpayer money to other social housing providers.

     Yep – and just wait for the definition of social housing providers to be radically widened beyond what the popular imagination would normally consider to be such a thing. It's likely to encompass private sector mega-landlords showing their commitment to something called "the community" through participation in the Government's "social investment strategy" – aka Billy's Boondoggle.
   • mikesh 1.2

     25 May 2024 at 10:54 am

     Perhaps the calculations would be different if the government gifted the house but retained ownership of the land, which they would then rent out to the tenant. That rent could be kept relatively low with respect to the household income, and would take take into account the fact that the house was no longer included in the rent.
     • Descendant Of Smith 1.2.1

       25 May 2024 at 1:29 pm

       I've long argued that housing could be much cheaper if government owned the land and all you had to do was buy the house.

       Put the land on 99 year peppercorn leases – after all if it is good enough for Taranaki farmers…..
       • Craig H 1.2.1.1

         25 May 2024 at 7:14 pm

         Very Singaporean!
     • SPC 1.2.2

       25 May 2024 at 3:28 pm

       Not with state houses, but to help people into first homes (also hopefully Kiwi Saver and NZSF move to provide long term rentals).

       That would allow more into a home than the First Start deposit (given rising land values).

       And the rising land value would be a government asset.
   • Craig H 1.3

     25 May 2024 at 7:16 pm

     I don't have a problem personally with giving tenants the house eventually, but would do it after 12 years of paying 25% of income as rent regardless of income (so no maximum rent) since after that, the tenant would have paid 3 year's worth of income as rent.
     • SPC 1.3.1

       25 May 2024 at 9:03 pm

       Not with the land, the government needs the rising land value to borrow against to build more new state housing.
       • Craig H 1.3.1.1

         25 May 2024 at 11:24 pm

         Could be set up as peppercorn (or no) leaseholds, and probably a clause in the contract or legislation that gives the Crown first right of refusal on sale at a reasonably low value to avoid it being on-sold at high profits.

         That said, does the Crown need to retain the land? If it wants to borrow, it can do it via A grade bonds backed by a sovereign currency with no history of defaults. It doesn't need to land as collateral.
         • SPC 1.3.1.1.1

           25 May 2024 at 11:39 pm

           1.giving people land ownership while others were paying market rents (and unable to afford to buy) would be unwise.

           2.this is why I prefer assistance to those paying market rents into home ownership on leasehold land and continuing with income related rent for state housing.

           3.debt to assets is an important part of government accounts (across time).
2. ianmac 2

   25 May 2024 at 10:35 am

   The Technology Institutes had embarked on Reform by unififying the content so that experts in soil management for example would design a universal program so that each Institute could use the same plan.

   No! No says Penny Symonds. De-Unify this minute!

   Reading programs were designed by teachers using a wide range of methods.

   No! No says Erica Stanford. Unify the teaching of Reading and we will call it what the Dyslexic Association named it, Structured Literacy.

   Does this sound like a coherent consistent plan or does it sound like a shambles?

   (Incidentally, 80% of children do learn to read using the previous systems, but it is true that the 20% who can't, do need specific help, but bath/baby spring to mind.)
   • weka 2.1

     25 May 2024 at 11:54 am

     as a general principle, we should do both. We need national standards, but we also need those to be adaptable to local situations. All good sustainability design arises out of the environment in which it will be applied, because the local environment is what we have to work with.
     • ianmac 2.1.1

       25 May 2024 at 1:25 pm

       The trouble with National Standards Weka, is that no two people learn at the same rate. We might say that the average class of 10 year old reads at the 10year Reading age. But some of those children read at the 15+ RA and some are reading at the 7y RA with all the others sprinkled between. Those below 7y RA need specific assistance. And they always had needs as the NZ long tail has shown. (Dyslexia.)

       NZ has always had majority of children reading very well above "average" with a significant number weighing the average down. In UK there was (is?) a test day so cunning Principals asked certain kids to stay home so that their averages stayed higher.

       (Note: Just because a 10 year old has a RA of 15+ doesn't mean that they should read Adult books because their interests are still that of 10 year olds.)
       • Descendant Of Smith 2.1.1.1

         25 May 2024 at 2:15 pm

         (Note: Just because a 10 year old has a RA of 15+ doesn't mean that they should read Adult books because their interests are still that of 10 year olds.)

         I dunno bout that. By 10 I was reading stuff like Robert Ruark's – Uhuru, Edge and Adam Steele westerns, Robert Heinlen's – Stranger in a Strange Land, loads more scifi.

         Even just looking at stuff now I got for Christmas that I can find – Black Beauty at 5, Dog Crusoe at 7, Huckleberry Finn and Ivanhoe at 8. I distinctly remember outgrowing the traditional children stuff and moving to adult books post the Ivanhoe / Three Musketeers era – somewhere in that period was Wilbur
         Smith as well – though I think I was about 15 when I realised that Sean was not pronounced "seen". Sadly I also read the Erich von Däniken stuff about then as well.

         11 to 12 was reading Sven Hassell (became interested after reading The Blue Max to read more books about the opposition's perspective of the war), Anne McCaffrey, etc etc

         The point is, is that there was nothing in any of that that was not able to be read and understood and worked through – sex, violence, religion (for and against).

         I read plenty of non-fiction too and magazines like my uncles Mind Alive.

         I'm not sure what you mean by interests of 10 year olds. Just let people read what they are comfortable with. I suspect there may be some stuff I didn't fully understand at the time but not much – and if I didn't understand it it likely didn't matter. Just like so many people don't pick up on what Lola by The Kinks is about ….
         • Belladonna 2.1.1.1.1

           25 May 2024 at 2:33 pm

           I, too, was an extensive reader (and borrower of books from the adult section of my local library) – lovely librarians who were delighted to help me find new authors.
           I think that I would have been bored silly by the 'books suitable for 10-year-olds' then (and even more so, now, when the literary level has been lowered even further).
           If I was (and I was) interested in historical fiction, then the natural progression from Rosemary Sutcliffe, Cynthia Harnett, or Elsie Locke (all, BTW, probably too 'advanced' for today's 10-year-olds) – was Jean Plaidy, Mary Renault, or Robert Graves (or even Georgette Heyer). – from the shelves of the adult collection.

           I will admit that I entirely skipped over the YA novels – which seemed to be entirely concerned with relationships or social problems – neither of which I was interested in.

           If something came up in one of the novels (or non-fiction books) which I didn't understand – I could always discuss with my family (dinner-table conversations about torture, martyrdom, abuse, political shenanigans, etc.).

           As an aside, I vividly remember the first time I asked my Dad something he didn't know the answer to (What was the Babington Plot) – and he said 'I don't know, but let's go and find out' – leading to consulting an encyclopedia, and a further trip to the library to look into Tudor history – no Google in those days).

           It made a huge impression on me. Not only that adults didn't know everything, but that it was OK (even praiseworthy) to admit it, and go and find the answer.
           • Descendant Of Smith 2.1.1.1.1.1

             25 May 2024 at 2:51 pm

             A L Rowse's book on The Tudors was fascinating.

             We'd all gotten used to death and destruction I guess quite early on reading the bible from cover to cover anyway. Pretty sure I knew what killing people, stoning people to death, adultery, eternal damnation and being prejudiced was about quite early on in the piece. As well as the good bits. Focus on the good bits……..
             • Belladonna …

               25 May 2024 at 2:57 pm

               My 8-year-old was horrified by the killing of the first-born (reason for the Jewish Passover). The Bible is not for the faint-hearted!

               The Wars of the Roses was the inspiration for Game of Thrones – those of us familiar with Medieval history were not surprised by any of the blood-thirsty dramatization.
               • SPC …

                 25 May 2024 at 3:45 pm

                 As was Scottish history.

                 George R. R. Martin has stated many times that the Massacre of Glencoe, along with the Black Dinner at Edinburgh Castle in 1440, is what gave him the idea for Game of Thrones' most infamous scene – the Red Wedding.

                 And the wall and storms of winter coming from the north.

                 https://blog.nms.ac.uk/2019/02/14/exploring-the-true-history-behind-game-of-thrones-at-the-national-museum-of-scotland/

                 As to the bible stuff, the acts of god are just exaggerations of abuse of power judgment (beyond the capacity of empire, let alone mere kings). And there is no evidence any of them were real (not even a conquest of Canaan and decimation of the population). It can be explained as the shock and awe narrative of cult myth making.

                 Though belief in such inspires real acts of dubious morality by those of Christian, Moslem and Jewish faith.
         • ianmac 2.1.1.1.2

           25 May 2024 at 3:30 pm

           "(Note: Just because a 10 year old has a RA of 15+ doesn't mean that they should read Adult books because their interests are still that of 10 year olds.)"

           I too read anything and every thing. What I meant was that teachers who read a 15+ RA should not thrust adult books on kids as part of the reading program. There is heaps of stuff available for challenging instruction. (I remember a book from the National Library Exchange whizzing around a class of 10 year old girls. Judy Blume wrote for younger kids but this particular book that excited the girls, was the book aimed at adolescents experimenting with sex. RA 15+.)
   • Belladonna 2.2

     25 May 2024 at 2:15 pm

     I don't know where you're getting your figure of 80% of kids learning to read under balanced literacy (the current MoE approach to teaching).
     We don't have any figures – AFAIK – measuring this for primary age children.

     The only independent measure has been the pass rate at the NCEA literacy test – which has been hovering around 65% for reading.

     https://www.rnz.co.nz/news/national/499391/ncea-numeracy-literacy-test-results-show-55-percent-student-pass-rate

     Meaning that around 35% of kids are functionally illiterate at age 14-15.

     The PISA test found that 21% of NZ 15-year-olds were 'reading' at the lowest level (either completely or functionally illiterate)

     https://www.rnz.co.nz/news/national/516423/using-a-structured-literacy-approach-to-teach-reading-what-you-need-to-know

     Note: this is *after* any interventions such as Reading Recovery, and/or expensive tutoring programmes (for higher wealth families).

     Given that, I'd put the success rate of balanced literacy approach in actually teaching reading in the classroom- closer to one third (which aligns with overseas results)

     https://www.scientificamerican.com/article/two-thirds-of-american-kids-cant-read-fluently/

     Yes, of course, *some* kids learn to read under balanced literacy. They will also learn to read under structured literacy (phonics based) – and would probably learn to read with no actual teaching at all (all those anecdotes of people teaching themselves to read as preschoolers).

     Yes, of course, *some* kids will not learn under structured literacy in the classroom and will need further intervention. But – all the research shows, that it's a lot fewer of them (and the current Reading Recovery programme won't teach them either)

     The point is that structured literacy has a whole string of research-based evaluation – everything from neuroscience (what's going on in your brain when you learn to read), through to practical classroom-based results (including in NZ) – to show that it's a better methodology for teaching *all* kids to read.

     Time for the NZ teachers unions and the MoE to get on with implementing best-practice, rather than trying to defend their previous (failing) systems.
     • ianmac 2.2.1

       25 May 2024 at 3:53 pm

       The assumption is that "35%" of children based on the offered data cannot read.

       Yet Pisa stated 21% of 15 year olds reading at the lowest level. That leaves 79% at some reading skill through to above age levels. Included in the below to high group is a group of kids who have mono-syllabic language language skills, deprived backgrounds where going to school is not part of their survival skills. I do not think it is possible for every kid to be above average. If they were then average would have no place.

       The structured learning program was designed for the dyslexic kids who were failing, by the Dyslexic association and good on them. (Spectacles help poor sight so will we give every person a pair of spectacles?)

       We will look forward to seeing if the quality of reading that we enjoyed, will translate from the mechanics and dissection of the bits of words into meaningful language. (I helped an adult man recently who could read the words but had never learned to understand the wholeness of the language.)
       • Belladonna 2.2.1.1

         25 May 2024 at 4:38 pm

         And your evidence for the 80% of kids learning to read through the current classroom balanced literacy approach has still not been provided.

         The difference between the PISA results and the NCEA ones can very easily be explained by a difference in evaluation (I would assume that the bottom and next to bottom PISA results would be equivalent to the NCEA result – covering those kids who have some level of literacy, but are functionally illiterate when measured against NCEA standards)

         Note that the PISA results absolutely do not include those kids who are not present at school, and I would strongly argue, don't include many kids who are noticeably struggling with learning. PISA evaluation is an 'opt-in' programme- and not all schools opt in (and not all students at those schools participate).

         The structured learning programme may well benefit Dyslexic kids – but it also benefits many, many other children. There is zero evidence that only dyslexic kids are failing to learn to read using the current system – indeed thousands of kids, with no identifiable learning disability (apart from failing to learn to read), are being sent to Reading Recovery. Which makes this whole argument, a red herring.

         The proof is, as always, in the pudding. But NZ schools which have already transitioned to structured literacy (at their own cost, and against MoE pressure) have reported significantly improved results for their students in learning to read.

         https://www.nzherald.co.nz/nz/education/schools-footing-the-bill-to-teach-teachers-new-literacy-approach/3SMWSF3BSOCO5LJ76733SMBIOQ/
         • ianmac 2.2.1.1.1

           25 May 2024 at 5:15 pm

           Thanks Belladonna. Your thoughts are well informed and useful. In my time teaching NE to year 6, most of the kids could read from a bit below to 15+ but now in my 80s, so perhaps I need a wee lie down.
           • Belladonna 2.2.1.1.1.1

             25 May 2024 at 5:33 pm

             Appreciate the discussion Ianmac. Reading and literacy are a subject that I care deeply about. And the reality that too many Kiwi kids can't read worries me a lot.
             Not so much reading for pleasure (although that's been a lifelong recreation for me) – but I recognize not everyone gets their kicks out of books.
             But being able to read full stop. It's a huge barrier to employability (no driver's licence for example, or not able to read safety briefings), and to participation in society.

             Well-researched and successful changes to teaching practice are absolutely worth trying.

             I supported this under Jan Tinetti (although I doubted that she'd get it across the line against the MoE). And I support it under Stanford.
             • ianmac …

               25 May 2024 at 5:37 pm

               All good.
3. Incognito 3

   25 May 2024 at 11:40 am

   Does Chris Luxon shave? The answer is No! because he doesn’t have the balls to stimulate the growth of any facial hair. The reason is that he’s been politically castrated and neutered by his coalition buddies in a messy coup d’état.

   But if/when he does grow some balls shit will hit the fan and the most likely scenario is that he’ll be replaced to keep the coalition alive.

   But it’s hard to imagine a scenario where the Prime Minister overrides his co-deputies to mete out the same clear and swift retribution suffered by National Party MPs and ministers. It’s unlikely the coalition would come out of that unscathed.

   https://newsroom.co.nz/2024/05/22/christopher-luxon-the-disciplinarian/
   • Drowsy M. Kram 3.1

     25 May 2024 at 2:59 pm

     But if/when he does grow some balls…

     Unlikely – who needs balls when you're juggling seven properties. The whole governance thing is tangential to getting 'our' country back on a landLord's track.

     'No cause' terminations remind renters 'they are at the whim' of landlords
     [11 April 2024]

     Who chooses to be a tenant in NZ? Imagine what it's like for, say, a family with children to always be only 90 days away from eviction – that’s the 'stability' rent will buy.

     https://rentersunited.org.nz/

     In Vienna, the Renters’ Utopia [10 Oct 2023]
     Soaring real estate markets have created a worldwide housing crisis. What can we learn from a city that has largely avoided it?

     That's what differentiates Vienna. Perhaps no other developed city has done more to protect residents from the commodification of housing. In Vienna, 43 percent of all housing is insulated from the market, meaning the rental prices reflect costs or rates set by law – not "what the market will bear" or what a person with no other options will pay.
     …
     The mean gross household income in Vienna is 57,700 euros a year, but any person who makes under 70,000 euros qualifies for a Gemeindebau unit. Once in, you never have to leave. It doesn't matter if you start earning more. The Government never checks your salary again.

     Vienna is also the city with the shortest working week, ~29.5 hours on average, and the 7th most productive city in the world. Vienna shows that planning/regulation to minimise landLord greed is possible. And, with what's in the pipeline, imho NZ govts would be stupid to stay on a landLord's track. Just hope we don't run out of time.

     Three great forces rule the world: stupidity, fear and greed. – Einstein

     Lacking Incentives, Not Information. Why Politicians tend to be Less Responsive to Lower-Income Citizens
     [19 Feb 2024]
     The principle that democracies give all citizens an equal voice is challenged by scholarly work showing that policies tend to be biased in favor of the more wealthy citizenry.

     Govt policies tailored for the wealthy, not the people – Greens [19 May 2024]

     https://www.greens.org.nz/ending_poverty_together
     • Incognito 3.1.1

       25 May 2024 at 3:10 pm

       If only prospective tenants could find out the history of bonds lodged for a given rental address – dates only would suffice, but actual dollar-amounts would be a bonus – then this could serve as a warning bell not to touch it with a barge pole. Knowledge is power and tenants need all the power they can get in this lopsided environment.
       • Drowsy M. Kram 3.1.1.1

         25 May 2024 at 3:22 pm

         although that info might be ruled off limits due to 'commercial sensitivity'
         • Incognito 3.1.1.1.1

           25 May 2024 at 3:41 pm

           Yeah, that excuse is wheeled out way too easily and often, IMO. A rental agreement is a legal (commercial) contract between two parties and both parties should be able to do full due diligence, e.g., make it a pre-requirement before lodging the bond. This could be seen as the equivalent of obtaining a LIM report, title check, and builder’s report when buying a house – one could call it a RIM report.
4. joe90 4

   25 May 2024 at 11:50 am

   Man or bear?

   .

   There’s no time to think, so I operate on instinct. My task is ridiculously complex. I need to deescalate any signs of aggression, guide the man into a state of emotional balance, and exit the situation safely, all at once. This process requires all of my attention, energy, and intellect. It’s really hard.

   I’ve been in this position so many times that it exhausts me just to write about it. Sometimes, it’s not that I’m afraid of men; I’m just really, really tired.

   https://bikepacking.com/plog/man-or-bear-debate/
   • ianmac 4.1

     25 May 2024 at 1:52 pm

     When confronted with a bear here is what you should do. Run like mad. It will give you something to do in the last minutes of your life.
     • Descendant Of Smith 4.1.1

       25 May 2024 at 2:19 pm

       Best advice I ever heard was to never, ever take your pants off and climb a tree. If you do you'll always have a bear behind.
5. Subliminal 5

   25 May 2024 at 1:00 pm

   The ICJ has now formally agreed with the SA application for urgency in dealing with Israel's ongoing genocide in Gaza by demanding they cease operations in Rafah, open the Rafah crossing to allow the quantity of needed aid into Gaza (at last count, perhaps 10 trucks – pictures showed these only half full, perhaps due to the instability of a floating platform – had delivered aid to warehouses, a big zero to acrual Palestinians), and to allow any investigators of appropriate UN bodies in.

   Of course, the chances of this occurring so long as the US remains staunch in its support for genocide, approaches zero. With regard to ICC warrants, Germany has conceded that should Netanyahu or Gallant visit after the warrants have been issued they will be obliged to arrest them.

   The US is now increasing the depth of its complicity with law changes enabling US citizens in the IDF to claim the same benefits as US servicemen. It is estimated that around 20,000 US citizens serve in the IDF. One of the benefits accrued will be immunity from prosecution for war crimes.

   In effect, H.R. 8445 is a measure designed to ensure U.S. legal and financial protections are being extended directly to U.S. citizens on the ground in Occupied Palestine as they assist in the ongoing colonization, ethnic cleansing, and genocide of Palestinians.The amendments it proposes formally bring U.S. citizens fighting in a foreign military into the fold, opening up further incentives for becoming an active participant in the Gaza genocide.

   In addition to those serving in the IDF, US citizens have a large footprint in Israeli cotrolled areas.

   This figure is bolstered further by the reality that an estimated 600,000 Americans were living in areas under Israeli control, including illegal West Bank settlements, prior to October 7. These settlers play key roles in advancing Zionist and, by extension, U.S. imperial interests. As such, it is no surprise that they have been consistently enabled to travel and settle in Occupied Palestine, being joined by billions of dollars in U.S. military and economic aid.

   https://mondoweiss.net/2024/05/new-bill-seeks-to-extend-u-s-military-benefits-to-americans-serving-in-the-idf/
6. Incognito 6

   25 May 2024 at 1:10 pm

   Albeit a little late, this is much-needed funding from central government to add to allocation by local government to clear choked and blocked waterways in greater Auckland of debris.

   https://www.rnz.co.nz/news/national/517790/funding-boost-aims-to-clear-auckland-waterways-of-debris

   With increased housing density and in-fill housing one wonders if these clean-up efforts are going to be enough to prevent future flooding and major infrastructure damage caused by natural events. Probably not.

   https://www.rnz.co.nz/national/programmes/ourchangingworld/audio/2018936992/how-much-of-our-extreme-weather-is-due-to-climate-change

   People could help by stopping littering, taking waste to waste & recycling stations, and by reporting major blockages in/of waterways by debris.

   People who recycle should be paid instead of charged a recycling cost. I used to help my primary school collect old newspapers because they could earn money by selling it for recycling. In the Netherlands there’s a container deposit on glass and plastic bottles and cans and customers/consumers receive their deposit back upon returning the empty containers; many Dutch love it!
7. ianmac 7

   25 May 2024 at 1:36 pm

   Interesting if we were to collate the malfeasance of the Government because bit by bit they slip bits through. So guess what. In Nick Rockel's Korero he has published Gerald Otto's compilation, from the side bar:

   "Threads of Corruption."

   https://nickrockel.substack.com/p/threads-of-corruption
   • ianmac 7.1

     25 May 2024 at 4:00 pm

     More on Corruption this time from Gordon Campbell:

     https://www.scoop.co.nz/stories/HL2405/S00075/on-blurring-the-lines-around-political-corruption.htm
     • Incognito 7.1.1

       25 May 2024 at 4:11 pm

       Another appropriate meaning of CoC.

       This government is shaping up to be the most PC government in NZ history.
8. SPC 8

   25 May 2024 at 4:34 pm

   Footnote: Further to that “independent” review of Kāinga Ora by Bill English whose departing record in his final year in office ( o.e. minus 1500 state houses) somehow qualified him to damn Kāinga Ora, which was well on track to build 4,800 to 6,000 state houses a year. Despite its allegedly “unsustainable”forecast debt of $9 billion debt, Kāinga Ora was actually building up housing assets worth tens of billions

   The salient detail is that the coalition of chaos was/is trying to imply that Kainga Ora''s operational management was the concern as per growing debt forecasts, when this was mostly related to the build up planned.

   https://www.scoop.co.nz/stories/HL2405/S00075/on-blurring-the-lines-around-political-corruption.htm
   • Traveller 8.1

     25 May 2024 at 5:14 pm

     "The salient detail is that the coalition of chaos was/is trying to imply that Kainga Ora''s operational management was the concern as per growing debt forecasts, when this was mostly related to the build up planned."

     That is a political red herring thrown up by Labour. The assets being accumulated mean nothing, if the organisation can't generate sufficient cash flow to service and pay back the debt.

     KO is forecasting losses over somewhere around $2.5bn over the next 4 years. Interest costs exceeded the net operating income for 2023 and are forecast to do the same for 3 of the subsequent 4 years. KO is facing negative net operating cash flows such that they will have to take on even more debt just to pay its interest.

     KO has been poorly governed – it doesn't matter which way you slice this.
     • SPC 8.1.1

       25 May 2024 at 5:18 pm

       Landlords who leverage do just fine. They become multi-millionaires.

       Some farmers operate at a loss for years too, provided the equity grows they survive.
       • Belladonna 8.1.1.1

         25 May 2024 at 5:42 pm

         Landlords who are unable to pay the mortgage – either from rents or supplemented with other revenue – do not do 'fine'. They either sell the loss-making house, or the bank forecloses.

         Some may well run at an interest-only mortgage for some time (although banks are fairly wary about these, with the potential for a dropping housing market). And many may just break even (or even make a technical small loss – although they can not set that off against any other taxes).

         I don't have an issue with KO having borrowed money to build the houses. But there is indeed an issue if the interest repayments are increasing substantially – with no way to offset these by increased income.

         Note that money spent on repaying interest is not available for other uses. And if that amount of money increases a lot over the next few years, then what do you think the government should cut to pay for it?

         Landlords at the very least, have to ensure that their outgoings on interest, are balanced by their income on rents.

         The argument that they make their profit when they sell (assuming it’s outside the bright line period) – is indeed true. But not relevant to the government – unless they are proposing to sell off this state housing (which I think, we’d all say is not desirable)
         • SPC 8.1.1.1.1

           25 May 2024 at 6:02 pm

           Any landlord having a problem paying a mortgage out of rent income can just borrow more against the property (as farmers do in any year where cost is higher than profit). Using growth in equity (CG).

           Landlords were doing this because of rising interest payment liability coinciding with the full realisation of Labour's end to deduction of this cost against rent income. There were not any mortgagee sales.

           And now with the CoC in power they will be back buying more.

           An organisation with $15B in debt and $45B in assets was well set to add thousands of new builds each year.
           • Traveller 8.1.1.1.1.1

             25 May 2024 at 6:28 pm

             They can’t just borrow more if they can’t meet the costs of servicing the loans, and if they have no foreseeable ability to repay the loans.
           • Traveller 8.1.1.1.1.2

             25 May 2024 at 6:31 pm

             There were not any mortgagee sales.
             Do you rent? Did you notice what happened to rents?
             • SPC …

               25 May 2024 at 9:09 pm

               Rents go up because of a shortage of supply.

               Landlords were able to ride the rise in mortgage cost because they had equity from CG (did you not notice the rise in property value 2019-2021).
               • Traveller …

                 25 May 2024 at 9:23 pm

                 Property sales peaked in mid 2021, and the market peaked around November 2021. Since then, landlords equity has been declining.

                 Rents go up by more when landlords costs go up in a market where supply lags demand.
                 • SPC …

                   25 May 2024 at 9:59 pm

                   Landlord equity is higher in 2024 than in 2019, much higher – so this can be borrowed against to manage a temporary rise in mortgage cost.

                   Rents go up when there is a market shortage, the constraint is ability of the tenant class to afford the rent (and desirability of the landlords property vs others)
                   • Traveller …

                     25 May 2024 at 10:34 pm

                     Landlord equity means nothing if landlord income cannot fund the debt.

                     As far as rents are concerned, market pressure from excess demand is going to be exacerbated when landlords have additional costs imposed on them. And we know that from the data. From 2008 through 2017, the median weekly rent in NZ increased by just 4% per year. From 2017 through 2023, the average rise was 6%. In 2023 alone the increases was 9%! That's the impact of government policy right there.
                     https://figure.nz/chart/dnQKC3FHjhAE6Kqw
                   • SPC …

                     25 May 2024 at 11:45 pm

                     Maybe the high level of migrant labour inflow 2022-23 has an impact on rent demand.

                     Anyone whose equity has gone from 40% to 66% can borrow money rather easily (banks know higher mortgage rates are temporary).
                   • Traveller …

                     26 May 2024 at 1:20 pm

                     Maybe the high level of migrant labour inflow 2022-23 has an impact on rent demand.

                     And in adding that level of demand, the government just made things worse. Add costs to suppliers, and then throw extra demand on top.

                     Anyone whose equity has gone from 40% to 66% can borrow money rather easily (banks know higher mortgage rates are temporary).

                     Where do those figures come from? You're also forgetting that interest rates have risen substantially. Any landlord who purchased in the year or so up to November 2021 will have seen their equity decline.
                   • Belladonna …

                     26 May 2024 at 1:39 pm

                     Anyone whose equity has gone from 40% to 66% can borrow money rather easily (banks know higher mortgage rates are temporary).

                     Really? You have evidence that people with an increase in equity, but not increase in income (either current or projected) can "borrow money rather easily"?

                     Perhaps you could share the source of your information.
           • Belladonna 8.1.1.1.1.3

             26 May 2024 at 1:07 pm

             No. Banks require landlords to prove that they have a reasonable expectation that income will grow to meet the mortgage repayment requirements.

             So, yes, the banks may agree to an interest-only period to meet a specific crisis: e.g. someone loses their job, a serious operation (requiring an extended period of convalescence) or the house needs to be gutted and refitted after being trashed by a tenant. Or, as you say, a bad farm year (with future projections being positive). All of those are time-limited issues. If things don't improve (i.e. income doesn't increase) after this period – then the banks will move to foreclosure. [Note that many farms operate on an entirely different commercial reality – with annual mortgage payments, rather than the regular fortnightly ones that most of us experience]

             Banks may also agree to a reverse-mortgage. Although this is usually not for landlords.

             Banks are now stress-testing additions to the capital sum borrowed at something around 9%. And, if you cannot afford this, they will not increase the capital sum they lend to you. They certainly won't loan you more, if you cannot pay interest on the amount you already owe!

             This has nothing to do with the amount of equity you have in the property. It has to do with your ability to pay the interest and repay the capital.

             But, if you cannot meet your interest repayments (setting aside capital repayments) the bank will indeed force foreclosure. From their perspective, a quick mortgagee sale gets them their money – and the prospect of a new loan to someone better able to pay.

             Mortgagee sales rose substantially in 2023.
             https://www.oneroof.co.nz/news/cheap-as-2023-the-year-of-price-slashing-mortgagee-sales-and-1-reserves-44381

             But, in any case, comparing private individuals and even companies with state owned housing is entirely pointless.

             Unless you are envisaging that the government is going to sell off state housing in order to achieve the capital gain, the 'assets' have no commercial value. The liabilities (the debt) however, is indeed real, and the government needs to find this money in order to pay off the lenders (interest and capital). If the income generated by the 'assets' isn't sufficient to match the liabilities (and we're just looking at debt here, setting aside maintenance, repairs and rates) – then there is a major issue for the government to manage.

             If these repayments are ballooning because of increased mortgage rates – then this money has to come from somewhere. And means that the government has to cut spending in other areas. There is no money tree.

             Historically, this was why governments issued bonds, rather than borrowing.
             I suspect that the last government was over-persuaded by the very cheap capital available at the time, and didn't consider the long-term consequences if/when that situation changed.
     • Nic the NZer 8.1.2

       25 May 2024 at 7:38 pm

       There you go, so it is all about Kainga Ora being profitable. According to some psycho the only way NZ should expand social housing provision is at a profit.
       • Traveller 8.1.2.1

         25 May 2024 at 7:55 pm

         There is no money tree Nic. KO has a funding model that enables it to build new housing and manage social housing stocks. When it is governed well, that works. When the organisation allows its borrowing and operating costs to balloon out beyond what is sustainable, it doesn't.
         • Nic the NZer 8.1.2.1.1

           25 May 2024 at 8:21 pm

           If the government wants to expand social housing that is a non-issue, if it wants to reduce social housing this is a convenient excuse. That is all that is going on here.
           • Traveller 8.1.2.1.1.1

             25 May 2024 at 9:25 pm

             The KO funding 'model' has been in place for years. And social housing can expand under that model.

             What changed is that under the governance of KO, operating costs and borrowing were allowed to spiral out of control.
             • Nic the NZer …

               25 May 2024 at 9:48 pm

               You can read that the KO funding model changed just from the report. The conditions include operating surplus within two years (That's what is known as profit in private sector terms, by the way) and it became clear that the boards expectation of increased borrowing (needed to expand social housing) was not going to be reciprocated.

               The governance of KO didn't change, they were sacked for holding onto ideas of the previous government, after the government changed.
               • Traveller …

                 25 May 2024 at 10:12 pm

                 The funding model did not change. The way KO is funded is still the way it was funded under the previous government. And BTW, an operating surplus is not the same as a profit in private sector terms. In private sector terms terms 'profit' includes deduction of the cost of funding. The operating surplus examined in the KO review does not include funding costs.
9. SPC 9

   25 May 2024 at 5:17 pm

   "Kieran's claim is wrong. We're funding 1500 new homes for people in need. The vast bulk of those will be new houses."

   $140M for 1500 new homes.

   Bishop is now claiming the "vast" bulk of the funded 1500 new "homes" will be new houses.

   It cannot include ownership of new land for housing. So it would have to be homes within existing or new building. One still wonders who can build a house for under $100,000 (a bed sit within a group house maybe)(otherwise factory sourced small build).
   • Incognito 9.1

     25 May 2024 at 5:29 pm

     Please use the link when quoting next time.

     https://www.newshub.co.nz/home/new-zealand/2024/05/south-auckland-woman-living-in-car-with-two-kids-gets-emergency-accommodation-from-ministry-of-social-development.html
   • Belladonna 9.2

     25 May 2024 at 5:57 pm

     The announcement is pretty light on detail (to be expected, I guess, pre-budget). The detail is supposed to be released on the 30th of June.

     https://www.hud.govt.nz/our-work/social-and-transitional-housing

     The delivery window does run over two years (so I guess the potential of additional funding in the second year).

     The intention is that a large chunk of this is emergency housing (or it seems so) – operated by community housing providers (I guess the Sallies, etc.) I imagine, to free up the money currently being spent on motels.
     Another chunk is for longer term housing – but very little detail on this.

     Some verbiage about it not necessarily being built in the areas where there has been other social housing investment. I've no idea what they mean by that – unless it's a veiled hint that it will not be Rotorua!

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