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Questions on Key’s housing sell-off

Written By: - Date published: 7:12 am, January 30th, 2015 - 71 comments
Categories: housing, john key, national - Tags: , , ,

When is an asset sale not an asset sale? Why – when Key says so, of course. But it’s not all going smoothly for Key’s planned state housing sell-off. It simply doesn’t make sense to sell our houses at a time of urgent need. Why is he breaking his word (yet again)? Why didn’t he put it to the electorate last September?

These are not the only inconvenient questions being asked. Here’s Armstrong in The Herald:

‘Market’ swept under social housing rug

One particular word was noticeable by its absence from the Prime Minister’s speech yesterday detailing his Government’s complex and contentious plan for the future of what National now calls “social” housing rather than state housing.

That word is “market”. That officials from the Treasury and the Ministry of Business, Innovation and Employment talk endlessly in papers prepared for Cabinet ministers of the need to construct a “market” for social housing obviously gives John Key the heebie-jeebies – and, quite possibly, his new Minister of Social Housing, Paula Bennett, as well.

Like Key, she realises “market” is now a very dirty word in politics. It carries highly negative connotations. It jogs people’s memories of National’s asset sales. It suggests National is putting profit first and the needs of the poorest members of society a long way second.

“Market” is a dirty word – ouch. And as for “National is putting profit first and the needs of the poorest members of society a long way second” – well yes, that is self-evidently what they do, as a certain famous author recently observed.

As no one has yet come up with any hard evidence that community-based providers will necessarily do a better job than Housing New Zealand, it is difficult to erase the suspicion that the policy is motivated by ideology as much as anything else.

They won’t do a better job. “Community providers” can’t afford the houses, they have to partner with banks and developers. Banks and developers want profits. In what way is that consistent with better or more affordable housing?

In particular, Key is promising more people will be accommodated in social housing over the next three years regardless of whether that accommodation is supplied by the state or private providers.

On what possible basis can Key make such a promise?

See also 3 News last night:

John Key defends housing sell-off

The Prime Minister’s been forced to defend his social housing reforms, giving an assurance state houses will not be flogged off to line the pockets of developers.

Why would developers get involved if it didn’t line their pockets?

Proceeds from the sale are supposed to used, in part, for further rent subsidies. What happens when the money is spent (and the asset is gone)? (Aren’t Nats opposed to distorting a market with subsidies?).

Community providers thinking of buying into the scheme have raised concerns too, questioning whether there’s enough support from the Government or if the reforms will help at all.

Excellent questions indeed.

“Mr Little says community housing groups are “free to sell properties if they decide they no longer need it, can’t use it or can’t manage it”. However Mr Key disagrees. “In principle that can’t happen because we wouldn’t allow it to happen.”

How is Key going to prevent it? How will this be monitored and enforced? At what cost?

Monte Cecilia Housing Trust executive David Zussman says he doesn’t think the reforms will address their desire for an overall increase in housing.

How could it? – there’s nothing in the proposals that relate to building (it isn’t in National’s DNA to build things – they only sell things built by others). Final question I guess – are they going to get away with it?

71 comments on “Questions on Key’s housing sell-off”

  1. Foreign waka 1

    This is a sell off of assets and this time its taking the roof over the head of the most needy – literally. I so hope (cross my fingers, pray, have faith in the kiwi sense of justice) that this is seen for what it is. This is an exercise to get a surplus on the books, at all costs with the poor will have to give their last shirt, literally – no matter what.
    If someone can explain how this will help housing the ones that need it most, the disabled, elderly, very young coming from circumstances not of their making, unemployed due to health issues, the list is endless and yet – the accommodation is being reduced. If this is not a clear outward sign of the famous statement: Let them eat cake – I don’t know what is.
    By the way, I don’t want to see any more of that smug grin of this awful women Bennett. She is the lowest of the lowest, getting up the letter crawling on the warm bodies of the ones suffering.

  2. fisiani 2

    “It simply doesn’t make sense to sell our houses at a time of urgent need.”
    Interesting use of “our”. Does that also make them “mine”
    Selling empty houses to the Salvation Army to house poor families simply doesn’t make sense? Puts a different perspective on the sky is falling Chicken Little hysterics.

    • Sacha 2.1

      They won’t be selling currently-empty houses (supposedly wrong place and size to meet need) to community orgs. They will go to private developers, especially if they are in clusters that can be redeveloped.

    • scotty 2.2

      Thats right fizzer “yours’

      While most of us are happy for ‘our houses ‘ to be used by the less fortunate.
      Some like yourself – seem envious of the poor and resent them sheltering in’ our houses’.
      Why is that ?

    • Ch-ch Chiquita 2.3

      If there are empty houses and people in need why can’t the government house those people?
      If the houses are in the wrong size and wrong place how will the Salvation Army be able to house people in them? After all JK have just said they are in the wrong size and the wrong place so standing empty.

      • Treetop 2.3.1

        I suppose if a state house is not offered as a rental it will stay empty. Good enough to be sold, but not good enough for a person who applies to rent a state house to live in it.

        The market rent could be too low for the government in some small towns (like everything else the government does, unless it pays they try to get rid of it).

        As well the government know that there is not much chance of getting work in a small town and to offer a decent stable home to a family is being far to generous.

        • Sacha 2.3.1.1

          Such houses would be redeveloped if they are sited near others, or sold to private owners if not. Some of the proceeds will go back into housing, and Blinglish will pocket the rest to prop up his budget.

    • Foreign waka 2.4

      Fisiani, yes, they are – yours and mine and every other NZlander. Since they have been paid for via taxpayer money, they are essentially assets. Can you not see this? Is your blind loyalty to a doctrine really that strong?
      Any civilization has recognized that society and its social cohesion is strongly dependent on having a place that is a home, individually or collectively. That binds to the country, the community. BTW, it is also the strongest emotional pull by the military to “defend”.
      As for the people who need social housing homes, a roof over their head, consistency and security if not safety of all things, these are the groups no one is talking about. The forgotten ones, you know the mentally disabled, the poor and recovering from dependance or sickness, the solo mothers, the victims of circumstance and pensioners whose partner has died and the money is not enough to life on but too much to die with. I am sure there are more examples.
      Open your eyes, dare to be human in this sea of greed and glee on other people suffering.

    • tricledrown 2.5

      And selling some to Banks John Key said in his statement but had not mentioned it since.
      U turn I suspect!

    • Murray Rawshark 2.6

      They belong to all Kiwis, fishy. You’re African though, aren’t you?

    • DoublePlusGood 2.7

      The Salvation Army shouldn’t be entrusted with state social services, given they’re horribly bigoted.

  3. wyndham 3

    Key is claiming to have an even stronger mandate than ever but I can’t recall any pre-election mention of selling off state (oops sorry “social”) housing.

  4. vto 4

    The policy is simple empty-headed..

    Betcha even Key doesn’t even know how it could benefit “social” housing, let alone explain it.

    How does it benefit people who are at he bottom of the housing heap? Anyone know? Gosman? Fisiani (hopeful I know as have never seen anything of value from said chump)? David Farrar? Biscuitbarrel?

    Has anybody headr an explanation of how this will, in practical and commonsense ways, help those at the bottom of the housing heap?

    I just see emptiness

    • Gosman 4.1

      The proposed policy around selling some housing stock to non-governmental social service providers will have little impact overall it is true.

      There may well be an argument that the social service providers would be more responsive to tennants needs given they are closer to them and less bureaucratic than Housing Corp. That has yet to be shown obviously.

      What the government would argue is providing additional support in terms of accommodation supplements (which was also announced) would provide far more help to those at the bottom of the heap.

      • vto 4.1.1

        Is that it?

        Still a retreating zero fulla

        • Gosman 4.1.1.1

          That is how it will likely be sold to the general electorate. National doesn’t need to convince the likes of you as you would never vote for them.

      • framu 4.1.2

        shame they are saying it will increase the number of houses then isnt it

        • Gosman 4.1.2.1

          Where did they state that the number of social houses will increase as a result?

          • framu 4.1.2.1.1

            oh come now – are you saying that this message hasnt been in public and the nats have made attempts to correct such an incorrect claim?

            theres more that gets said than whats in the policy and you bloddy well know it

            • Gosman 4.1.2.1.1.1

              If you can refer me to somewhere that it has been stated in public then you have a case. Do you have a link to someone making this claim?

              • freedom

                “Mr Key says that collectively the amount of social housing available to those in need will increase.”
                http://tvnz.co.nz/national-news/up-8-000-state-houses-could-sold-under-john-key-s-radical-plan-6225215

                that took two seconds on google search using “number of state houses will increase”

                Why do you bother making statements you know people will prove wrong?

                • Gosman

                  In which case then more social housing will have to be built and/or bought by either the State or other social service providers, If this doesn’t happen you then you are correct that National is wrong on this matter.

                  • freedom

                    Why are you incapable of simply saying
                    ” I was wrong ”

                    it’s called being a grown up Gosman. It doesn’t belittle you or mean you are somehow less of a power in the universe, it just shows you are a rational person who admits to fallibility. Try it sometime, you may be amazed how positively people react. Shit, you may even learn something about yourself.

                    • Gosman

                      I never claimed that they didn’t state that. I asked who mentioned that. I also gave you my take on what I thought the rationale behind the policy was. Nowhere was I wrong.

                    • freedom

                      I suppose if you screw semantics down as tightly as you are inclined to do then sure, you are never wrong in what you say
                      because really, you never say anything

                • Sacha

                  “Mr Key says that collectively the amount of social housing available to those in need will increase.”

                  Watch the wriggle-room. This can also be achieved by tightening what counts as ‘need’. Hence the announcement of a broader review of current tenants and no doubt the 5000 waitlisted applicants. That’s alongside an actual reduction in funded housing, either HNZ or otherwise. How else can this govt deliver what they’ve just promised?

      • Skinny 4.1.3

        This is a strategic move by a disingenuous Key. Expect landlords to profit by higher rents. I thought National were opposed to handouts as it’s not a hand up.

        Of course it does depend who is getting the ‘handout’ from this corrupt outfit.

      • tricledrown 4.1.4

        Gooseman
        Your daily trumpeted demand and supply model.
        Shows how much of an idiot you really are.
        Paying more accomadation supplements(rent subsidies)will push rents up in a market where supply is decreasing.
        Corporate welfare goostepper for landlords and the banking Cartel.
        Yesterday you were saying that you can’t interfere in the market.
        Increasing the supply of houses is the only answer.
        Immigrants should have to build a new house or apartment to move to Auckland,The govt should be building 10,000 new houses and apartments per year to catch up with demand.
        The Market is only interested in making money,doing nothing is maximizing profits especially for the Banking Cartels!

        • Gosman 4.1.4.1

          Supply is not decreasing. That is simply not true.

          • Barfly 4.1.4.1.1

            semantics Gosman…is supply decreasing relative to demand?

            • Gosman 4.1.4.1.1.1

              Wouldn’t it be more accurate to state supply is not keeping up with demand?

              • tricledrown

                Gosman so you agree with what I have said.
                Allowing for semantics of economic’s speak.

                • Gosman

                  Not really. If supply was decreasing it would be a bigger issue. Supply not keeping up with demand does lead to increased prices but can have multiple solutions including dampening of demand. Part of the problem may also be that supply of suitable accommodation versus supply of houses generally. In short this issue is far more complex than your simplistic statement I was responding to made out.

                  • tricledrown

                    Goostepper doubling down on the Bullshit now cut and pasting Nick Smiths&John Keys spurious spin.
                    Shifty shyster.
                    You are lying again.
                    Utter Bullshit.
                    Supply not keeping up with demand.
                    Can dampen demand.
                    Utter bullshit.
                    Painting yourself into corner.
                    Again.
                    Your supply of BS is keeping up with your handlers demands.
                    Yesyerday you were claiming leave everything to the market it will fix supply.
                    It has failed just like your pathetic propaganda!

                  • freedom

                    OK You have to explain to us idiots in the cheap seats how ‘ supply not keeping up with demand can dampen demand’

                    ????????????

                    Is it to do with an increased suicide rate from the stresses of homelessness?

                    Is it the growing number of car dwelling families who have decided, now their toddler has worked out the best way to sleep in the glove-box, they won’t bother pestering HNZ for further help?

                    Is it the generosity of landlords allowing families to double up in the garage for only a further 50% increase in rent?

                    is it the constant re-jigging of qualifying conditions and management protocols that provide ever shifting data-sets which can no longer be used for comparative analysis, so the bosses simply declare whatever they decide the current numbers mean?

                    Yes the comments above are a tad facetious though each is based in reality and yes they have no citations, so you can ignore them (as you would anyway regardless of the presented data) but c’mon Gosman, just this once, front up and explain your rather astounding declaration “Supply not keeping up with demand does lead to increased prices but can have multiple solutions including dampening of demand.”

                    Remembering of course, we are discussing Social Housing, not cartel strategies for selling cereal.

              • McFlock

                No. The meanings are equivalent.

                Are the statements true?

            • Kiwiri - Raided of the Last Shark 4.1.4.1.1.2

              Supply of bullshit from Key is definitely not decreasing.

          • Sacha 4.1.4.1.2

            “Supply is not decreasing.”

            Dude, when you sell 8000 houses, build 3000 and add 3000 subsidies, what else would you call that? We’re talking supply of housing for those most in need, not the general housing stock, which, yes, is increasing.

      • Murray Rawshark 4.1.5

        “What the government would argue is providing additional support in terms of accommodation supplements (which was also announced) would provide far more help to those at the bottom of the heap.”

        Landlords are hardly at the bottom of the heap.

  5. aerobubble 5

    Key looks bad on housing. When Key loks bad he needs to be seen to doing something.

    Housing is not going to get solved, but something will hapen to help Key push his agenda.

    ACT said nothing about charter schools, but Key looks bad on education, so ACT sudden had a policy, pushing money into provate providers let Key fund existing private schools more.

    My guess is crime. Police can now seize assets of crime. Govt can now access data across depts. Seek and Peek gives 24 hour fishing expeditions. Now housing can be sold to private housing groups. Add it up. Gangs. Gangs with huge funds are able to
    launder money buying and selling homes, homes where the gangs always own, homes that provide say good views of other properties they own, that can be used as lookouts to signal of pending state raids. crime is terrorism, terrorism is crime. Now how does government remove gangs from communities without surveilliance, without seizure, without placing property out of the hands of gangs. Gangs should wake up, and sell, distance their activities from assets because smarter gang behavior has led to more draconian govt. Of course once the gangs are moved on and the property is in the hands of private providers, then the laws are still on the books, if they can keep the reason for the laws from us, by misappropriation of the housing crisis, then they leave us open for dictatorship.

    • vto 5.1

      Even if Key announce that they would build a bunch of houses and then sell them off… even that would help. Key could use the government’s bargaining strength and help. Key could get the government to do something… anything ….

      but instead Key gets the government to do less than nothing. He gets the government to go backwards on housing.

      Such an epic fail.

    • Gosman 5.2

      Act has had a policy around greater school choice for as long as the party has existed as far as I am aware. Certainly the Partnership school proposal is entirely consistent with the general ideology of the party.

      • framu 5.2.1

        shame they are to chicken to actually campaign on it then isnt it

        • Gosman 5.2.1.1

          I am pretty sure they campaigned on it. Why would they not? It certainly isn’t the most controversial Act policy that I am aware of.

          • framu 5.2.1.1.1

            then im pretty sure you can show they did

            and not whats on the act website or something gibbs muttered at an AGM – public announcements in main stream media or widely reported speeches please

            • English Breakfast 5.2.1.1.1.1

              ACT’s charter schools policy was widely debated last year…google “acts charter schools policy” and you’ll return plenty of public discussion. Also, if a policy is published on a party’s website, then surely that party can be said to have campaigned on that policy. Not sure what point you’re trying to make?

          • Lindsey 5.2.1.1.2

            Please give me an example of the Epsom candidate standing up and saying that ACT would get rid of the Grammar Zone!

        • aerobubble 5.2.1.2

          Key hijack education to push charter schools AND raise the amount given to private schools. Get it. Most want better general education yet key locks in a naff policy that does not deliver and that does stuff he wants that was not adverized.

          Now he hijacks housing, failing do anything about it. As it just gets worse, low oil price fuels car use, fuels car sales, clogging auckland up which pushs up the price of homes close in. If govt is to facilate economic growth doing nothing while the problem gets worse is bad economic governance

          And where is Labour, sitting around wait for key to turn in the lock and lock himself out. Labour aint no opposition, they act like a spare govt. The true opposition are the Greens no baubles for them.

          • English Breakfast 5.2.1.2.1

            At the risk of sounding like an ACT supporter (heaven forbid), Charter Schools is a policy worth pursuing, and the early indications are that they are delivering. The hysteria around the opposition to them seems decidedly misguided thus far.

            • aerobubble 5.2.1.2.1.1

              throw more money and you will get results.
              This could have been accomplished in existing schools.
              And would have exposed the rise in support for existing private school s,
              and take away oversight that means claims of success are harder to sustain.

  6. mpledger 6

    1) The rent subsidy does not benefit the renter, it benefits the landlords. It’s effectively a govt benefit for the rich.

    All it does is create demand by landlords for property and the extra demand pushes up house prices … and then rents and the cycle begins again.

    2) You can see all sorts of trouble with this…
    Will the homosexual couple be able to get a Salvation Army rental? Will White Supremacists be the be able to get an Iwi rental?
    Whose side will the Salvation Army rental agency take if SA tenants and atheist tenants are in dispute? Especially when it gets to 50/50 calls.

    3) I don’t see any of this working well – the cost to the NGOs will be too high – firstly to buy and then to manage. All I see is that the ownership of these homes will bounce around from group to group with the stock deteriorating and losing value at each sale.

  7. Barfly 7

    I think that most people here are looking at the “squirrel” and arguing the toss about the colour of it’s imaginary coat….this asset stripping is about faking a surplus for Bill English
    ………..just like the previous asset sales
    ………..just like the running down of government services
    ………..just like the underfunding of the health system
    ………..just like ACC’s overpriced levies
    ………..just like ACC’s corrupt reducing of long term claimants
    ………..just like soo much else that I’m frankly too tired and depressed to articulate clearly

    and they need to fake a surplus because they introduced systemic cuts to the tax system by cutting the top tax rate in a deliberately unsustainable manner.

    they have borrowed an insane amount of billions to fund these tax cuts and are now continuing on in the process of asset stripping the country for the purpose of deceiving the people as to their true motivations and actions

    my apologies for my somewhat rambling post….frankly this government is really bad for my chronic depression

    • framu 7.1

      heh heh – the first words out of my mouth when this was announced was

      “So thats where they are going to magic bills surplus from then”

      • Kiwiri - Raided of the Last Shark 7.1.1

        Who and what else are they going to throw under the bus for Bill’s surplus?

    • Treetop 7.2

      Yep, nothing proactive is being done e.g. housing, health, jobs, education.

      The government are obsessed with reaching a surplus. The less they spend and the more they sell, the more they have for those who vote for them.

      No apology is required.

  8. Grim 8

    What is the real issue?
    watch this first: Nick Hanauer – Beware Fellow plutocrats, the pitchforks are coming

    http://tinyurl.com/ks9g8lg

    Then think about it,
    – if you agree,
    -then think about how this will effect money supply
    -the knock on effect on the value of the kiwi dollar,
    -effect on trade
    -role of government

    to increase wages within a country and remain competitive in international trade, you effectively reduce the value of your countries assets and resources.

    Unless your government enforces tariffs on exports (or taxes whatever wording you would like to apply)

    This explains the push for globalization, the removal of sovereign control over trade,
    and privatization of state assets.

    Raising wages increases money supply, either your products increase in cost and become uncompetitive, or you devalue your dollar, leading to asset stripping by trans-global corporations, it’s a cunning trick, all possible once you remove a countries sovereign control over trade.

    Governments can only aid the prosperity of it’s citizens by enforcing wage values within their local economy, but to do so they need to be able to place a barrier between the local economy and the international economy.

  9. heather 9

    The whole thing is a nonsense, community groups do not have the funding to purchase large groups of state houses, they will have to borrow money from banks and finance companies.
    I have worked in the community sector for many years, other than very big organisations like the Salvation Army community groups would not be able to contemplate such a purchase.
    It is the same with councils owning public rental housing, there are always those who see it as a quick buck to sell them and the pensioner housing off to whoever may buy it.
    Manawatu District Council set an example by forming a Community Housing Trust for their pensioner housing, works very well.
    Paula and John don’t seem to be on the same page, they almost seem to be making things up as they go along.
    In the end with the Fire Sale of these State Assetts some one will make a profit and continue to make money from them.
    The sickening thing is seeing the empty houses now which people could move into next week, but they are forced to live in their cars, camping grounds, streets and garages.
    I am ashamed of this government.

  10. Incognito 10

    Another question is what happens when a community provider folds, merges with or gets acquired by a third party? A contractual nightmare I’d say. When a community provider goes bust don’t the banks have first pick?

    Are they going to get away with it, you ask. Yes, IMO they will go ahead with selling 1,000-2,000 state houses next year if not for any other reason than to get the books into surplus. And because they can, of course, just to stick it to the nay-sayers and opposition.

    • NZJester 10.1

      National can never really get the books into surplus as they have run up such a huge debt. Any so called surplus in their books is fools gold made to look like real gold with smoke and mirrors. Labour was the only government to ever really run a true surplus by paying off our debt the majority of it run up by previous National governments.

  11. Observer (Tokoroa) 11

    Hi there

    Lets hear it for John Key and Bill English! Legends in their own life time – doing what seems to come naturally to them. Namely, wasting New Zealand away.

    There were warnings. The New Zealand Herald ran an article on May 13, 2011 flagging the horrific rise in National Debt run up by Key & English.

    “For 15 straight years until the recession of 2008-09, the New Zealand Government ran surpluses and paid down debt.”, said the Herald.

    REF: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid..

    AT the end of 2008, When John Key and Bill English took over, New Zealand’s National Debt was $!0 Billion. In January of this year 2015, Key and English have racked the Debt up to an inglorious $98 billion.

    REF: http://www.nationaldebtclocks.org/debtclock/newzealand

    These two flounderers show no sign of stopping their bizarre behaviour. Watch for yet another big sale of Assets and big windfalls for their wealthy friends, coupled with Tax reductions for the same wealthy acquaintances.

    The more mess the merrier. They have the mighty Sky City quagmire to give even more grants to. Utter Wastrels. The two of them. Key and English.

  12. Treetop 12

    The words market and social could have an effect like mixing electricity and water (being shocked). The market rents of the 1990’s for state housing had to be reversed. The dividend lost to the government by privatisation is nothing to crow about.

    Not hard to see why the word market is best avoided.

    I would like to see what all the other political parties would do about state housing. Perhaps the TS could ask them to do a column.

    • Murray Rawshark 12.1

      Great idea. I’d love to see columns from Seymour, Dunne, Winston First, Greens, Mana, and Labour. Maybe even the Maori Party.

  13. NZJester 13

    First they sell the houses off to various groups that will very likely include property speculators and give subsidies to them for the tenants in them while the money is available. Once most of the money for those subsidies runs out Labour is in very likely to be in power and will have to spend money buying the houses back at high market rates which National will pan them for doing.
    National is looking at this as a win/win situation for them and their supporters and a loose/loose situation for Labour and it’s supporters.
    Once the subsidies run out the subsidised tenants will end up unable to afford the rent and will be kicked out. The properties will be up on the market at full market prices and not the discounted amount National will sell them off at. If Labour can not afford to buy them back then developers and overseas absentee landlords will get them. Either way for a 3 to 4 year investment the initial buyers are likely to get a very big payday out of these houses by buying them from the government.

  14. Murray Rawshark 14

    National are sellers, not builders.

    That’s one of the best slogans I’ve seen lately. The problem is that Labour has also been tarred with the same brush since 1984. Tories use what the nation has built to enrich their mates. That’s all they are capable of.

  15. Clemgeopin 15

    I have just one word for this pro wealthy, pro corporate government, the destroyer of our values and our country :

    BUGGERS.

  16. Philip Ferguson 16

    “The existing workers’ housing shortage is critical and nothing short of mass occupation of houses by the poor will begin to turn it around.”

    Veteran activist Don Franks at: https://rdln.wordpress.com/2015/01/31/10809/

    Phil

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