Redeveloping Public Housing

Written By: - Date published: 8:07 am, July 26th, 2018 - 116 comments
Categories: housing, human rights, labour, phil twyford, Politics - Tags: ,

I have this sneaky sense that we are up for some quite muscular land development by the New Zealand state.

HLC (previously Hobsonville Land Company) have put out a tender that redevelops simply massive areas of Auckland. And this is not your greenfields unimpeded realm of Hobsonville transforming a flat grass runway into a new town with public transport and schools and farmers markets and ecologically designed streets and parks.

No sirree. This set of initaitives takes most of whole existing suburbs, such as Northcote (1,200 homes), Mount Roskill (9,500 homes), Mangere (10,000 homes), and Oranga (1,200 homes). Done in just over a decade. Like getting a row of bulldozers together and going: we’re going to build New Plymouth, Whangarei, Blenheim, and Wanaka, done before your baby gets to Intermediate School. Start.

HLC are looking for long term commercial partners that will work with them on:

  • demolition and removal of existing buildings and houses
  • site remediation and site investigations
  • civil works, urban design, and landscaping
  • consents related to earthworks and infrastructure
  • all the infrastructure and landscaping
  • stakeholder management

This is going to be a very long term partnership whoever takes it on. They will also need master planners, architects, builders, and all manner of government agencies to help. And experts who can move tenants to new places while all this is going on. They will need anyone left who can hold a hammer.

Now, it’s not like this wasn’t public. It’s been well signalled for a long time.

But this is going to hit a lot of people who have been in state houses for quite a while.

The Mangere one, for example, is going to need to integrate with the light rail project coming down SH20. That will take some impressive design and operational cooperation between HNZ and NZTA, which hasn’t been tried in living memory.

Phil Twyford said signing off on the business case for the Mangere redevelopment was one of the first things he did as Minister.

Now consultation with affected families has been undertaken, we can lay out the plans publicly. Over a period of 10-15 years, 2,700 worn-out state houses will be replaced by 10,000 new homes. This will comprise approximately 3,000 new state houses, 3,500 new KiwiBuild and affordable homes, and 3,500 market homes. This is 3,000 more homes than the initial plan put to me when the Government came to office.

Stage 1a of the redevelopment is underway. Thirty-five state houses are being demolished to be replaced by 66 more state houses and 100 other homes, at least half of which will be KiwiBuild and affordable. Building of the first new state houses will start in the next few months and are due to be finished mid-2019. The first KiwiBuild and affordable homes will be complete towards the end of 2019 and early 2020.

I am determined that the local community benefits from this re-development and are not priced out of the new homes. HLC are working to keep the prices of KiwiBuild homes as low as possible. Prices and exact numbers will be finalised as building contracts are agreed. Long-term rent and shared equity options are also under development.”

IMHO Minister Twyford is the most effective Minister this government has. He came into office with a plan for both housing and transport, rolled those plans out from day one, and it’s already showing. It’s his agencies in housing and transport that are struggling to keep up with him. As challenges go that’s a helluva lot better than being led by your departments as Ministers usually are, but it’s still a challenge. He’s seeking to rebuild executive machinery between the public and private sectors long since rusted with decay.

In its beginnings what used to be VicUrban was pretty controversial, but it is now a massive public-sector co-developer of very large bits of Victoria. You can look up the war stories that went with it. The new version, DevelopmentVictoria, really does alter the entire built form of Melbourne and beyond.

DevelopmentVictoria is where I’m seeing this going. And it’s huge.

I have a few sneaking suspicions that Auckland Council are going to need a rocket if they are going to consent at the speed that this government and Aucklanders need these homes done. Christchurch Council will be the same. I also suspect that we are in for a bit of legislative tweaking to ensure that those who are benefitting from a rail system near them actually start paying their share. Way, way back in the day, that’s what occurred through the Hutt Valley Lands Settlement Act 1925.

As longstanding tenants get shifted on and houses get demolished, there will be a bit of debate. There will be at least a decade in which people are shifted, houses are demolished, new town centres are formed, and new people shift in – all at the same time. That means sustained media focus over three electoral terms at least.

The Tamaki version, Tamaki Regeneration, took some hits in the media.

In political, emotional, social, and financial costs, this stuff can get hard.

But there are, finally, some HNZ Board members who actually understand such costs.

This is a government committed to taming the most rapacious economic force in this country: real estate capitalism, for the good of people.

116 comments on “Redeveloping Public Housing”

  1. DH 1

    I can agree on Tywford being ok but the rhetoric is still irritating, it’s all just welfare for the middle classes. They’re gentrifying low-income areas which deprives the existing inhabitants of (almost affordable) housing.

    An investor I knew showed me around a house she’d bought in Otara in 2003. It was a typical 3brm low cost 80’s box on a cross lease section, nothing special but not run down either. She paid $135,000 for it and it wasn’t a bargain or anything unusual, that’s what cheap houses in deprived areas of Auckland sold for at the time. She rented it out for $235 week.

    I have no idea of its present status but looking at current prices I’d assume it’s now worth over $500k and rent pushing $500 week. Low income people have been hit the hardest of anyone by housing inflation and this so-called ‘affordable’ housing is just an insult to them.

    • Ad 1.1

      What evidence do you have that Mangere people are insulted?

      • DH 1.1.1

        What evidence do you have that low-income people in Mangere can afford any of these houses?

        • Ad 1.1.1.1

          That’s for the market to determine once they are built. A wee way off. That is the point of the state intervening in the market.

          Your landowner friend is going to feel more “insult” than any other sector of society.

          • AsleepWhileWalking 1.1.1.1.1

            “The Market” couldn’t sustain this level without the 2 billion in subsidies each year.

  2. SaveNZ 2

    “Over a period of 10-15 years, 2,700 worn-out state houses will be replaced by 10,000 new homes. This will comprise approximately 3,000 new state houses, 3,500 new KiwiBuild and affordable homes, and 3,500 market homes.”

    Yep those 300 new state homes over 10- 15 years will solve the housing crisis alright. SARC

    The 3000 new Kiwibuild in 10 -15 years against the 39,000 who have already applied.

    And the market homes are taking public assets like land and tax payer money to privatise the land – it’s insane!

    The 2nd most worst policy after their TPPA stance for Labour is their pathetic Rogernomics housing policy.

    Essential workers can’t even afford the Kiwibuild houses because they are not affordable.

    Government should actually look at where the greatest need is, (renters) and have every house and piece of land they own available for an affordable rent. Then people can actually save money to get a deposit to buy a house for themselves! That would be a better strategy as the rents can cover over time the cost of the new builds just like private rental developers would do it.

    Leave the new builds to the public sector with their own money and land!

    Of couse it is also cheaper and quicker to renovate the existing state houses. If you turn on your TV then every day there are numerous “The Block” type programs where amateurs seem to be able to transform derelict housing within a few months! Sadly the most logical and practical approach seems beyond those, who stand to profit much more from the Thatcher methods.

    People are between a rock and a hard place and with this insane Rogernomics approach by Labour. Remember 60% of people now are on wages so low they can barely survive, seriously long term why would they vote Labour?

    The only reason Labour scraped in, was that Jacinda’s womb distracted from Labour’s terrible housing policy, they got rid of capital gains which kept the homeowners happy and Labour didn’t “champion” housing, for the last weeks before the election which benefited them greatly in the polls!

    Only the Blairites and construction and financiers like Labour’s housing policy and they don’t vote Labour!

    • joe90 2.1

      If you turn on your TV then every day there are numerous “The Block” type programs where amateurs seem to be able to transform derelict housing within a few months!

      Oh, that’s right, when amateurs transform homes that collapse.

      /

      https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12035532

      • SaveNZ 2.1.1

        You link finds the relocation company the faulty party not the Block. So not sure what your argument is.

        Professionals signed off by council and engineers seem to make entire blocks of houses, inhabitable, aka Bella Visa… have a look around Auckland and count how much is actually remedial work! A lot!

        • SaveNZ 2.1.1.1

          And practically all the building’s failing and needing remedial work have been signed off by ‘building experts’ and “engineers” and “councils”. So something somewhere is very very wrong with those experts

          Nor do they seem to suffer personally when anything goes wrong so that might be half the NZ issue, the remedial work falls on the victims to pay for aka the homeowners and the ratepayers of the council!

        • joe90 2.1.1.2

          So not sure what your argument is.

          Amateurs aren’t builders, they’re makeup artists with tiles and floor coverings and wow factor kitchens who lipstick on a pig, and when someone tried to move the pig, it fell to pieces.

          • SaveNZ 2.1.1.2.1

            ????

            • KJT 2.1.1.2.1.1

              The amateurs do not do the building, or even the bulk of the work in those programs.

              We built one years ago. The contestants came along in the weekend and put on some wallboard and paint. You don’t seriously think a few amateurs can rebuild a house in a few weekends of filming, do you?

              The funniest bit was when they wanted to film the roof going on. We had to stop work while some more photogenic TV staff carried some iron to the house, for the cameras. Then stop for another hour, to treat their cut hands.

      • Draco T Bastard 2.1.2

        That doesn’t appear to be the problems caused by the amateurs.

        But this:

        Justice Gordon found that O’Neills breached its obligations to Perry.

        The judge ordered the three defendants – Auburn, Jeremy O’Neill (a director at O’Neills) and O’Neills Building Removals – to pay $208,000.

        O’Neills Building has since gone into liquidation.

        Bet the poor woman didn’t get a cent but the three defendants still have their trusts and are living well.

    • So…. Your idea?? More of the “Same old same old” which caused prices to skyrocket.
      Your comment about Jacinda shows your mind set and sexist attitude.
      There is no Rogernomics in this. People who need a state house will get one, New home buyers will have a chance (freeing up rentals) as will people wanting an affordable home. Win Win.
      You seem to be suggesting that Labour killed capital gains…. rubbish.. it is the cycle.

      • SaveNZ 2.2.1

        People who need a state house will get one…. according to Ad’s figures there are 3000 state houses being built over 10 – 15 years REPLACING 2500 old ones. Difference is 300 new state houses over 10 – 15 years.

        Wish I had your confidence there will only be 300 extra state houses needed in that time and where the state tenants will go once their 2500 houses are demolished…Tamaki does not seem to be a good look.

        “In April 2016 Housing New Zealand gave away 2,700 state houses to Tāmaki Redevelopment Company (TRC). TRC then transferred them to Tāmaki Regeneration Ltd, an organisation established to evict tenants, demolish their homes, and sell the land to private property development companies.”

        As far as I am aware zero state houses have been built yet in Tamaki only expensive houses and none are occupied by state housing tenants since the land was given away in 2016.

        It helps to use Maths rather than ideology when projecting housing demand.

        • It was not this Government in 2016 that gave 2600 state houses away. This build is one of many planned by the current Government, and this does not factor in those State houses kept for refurbishment, which were to be sold off previously.

          Granted this is planned to be over time, but that is to assist tenants. This revamp has seen an increase in homes. So under that last projection, those 300 you are moaning about wouldn’t even have eventuated. It will provide 3000 more homes.

          So what math were the previous govt using? The math of scarcity to keep prices high????

    • Molly 2.3

      Government should actually look at where the greatest need is, (renters) and have every house and piece of land they own available for an affordable rent. Then people can actually save money to get a deposit to buy a house for themselves! That would be a better strategy as the rents can cover over time the cost of the new builds just like private rental developers would do it.
      Agree. State housing available for renting would be the most effective start to addressing the housing crisis. Not more of the same.

      • SPC 2.3.1

        The government is not able to choose the option of renting out the KiwiBuilds, as the programme is re-financed by sales, sale of the first build to finance the second build, sale of those to build the third.

        Financing 100,000 homes would cost $50B otherwise. That’s $5B pa.

        • SaveNZ 2.3.1.1

          SPC – weird how the government seems to think private landlords are making a killing on rentals, yet somehow the state doesn’t believe they can make a modest profit to pay for the state house upgrades, even though Housing NZ was in profit and making a dividend?

          Who is going to be renting our rentals in the future, cos I’m not sure it’s going to be the private sector… and the state does not seem very interested either in spite of making rental quality such a big issue.

          The average wage is $21 p/h and a one bedroom affordable home with 39000 applying for them so far is $500,000, so that’s A LOT of people not being able to afford those “affordable” homes and still be renting.

          • SPC 2.3.1.1.1

            You seem to be advocating the state owns and rents out more property. Merely renovating existing property, and a limited (by lack of finance) increase in state housing stock by new build or buying up private rentals.

            That’s Blairite tinkering.

            KiwiBuild using existing state housing land to increase the housing supply is the best option.

            If landlords find the new rental criteria onerous, they can put their property on the market, and allow prices to ease back. It’s preferable if home ownership rates began to rise rather then the number fall to lower than it was back in 1950, as it is on current trends.

            • SaveNZ 2.3.1.1.1.1

              SPC, as the landlord puts their home on the market, it does not ease prices because there are 35,000 new residents and work permits being given out who compete against existing tenants and buyers, record tourism and our privatisation of education (with bonus 20% of foreign students can get a “job” and gain permanent residency to buy up those aforementioned new houses).

              If you increase the demand 10 times more than supply and demand is depressing wages downwards so people can’t afford to live then, the right wing concept does not work.

            • AsleepWhileWalking 2.3.1.1.1.2

              You seem to be suggesting debt is the best option (as KB requires debt)?

              Where are the sweat equity schemes? Much better to build a house in stages. Kitchen/bathroom first, then add a room as you go.

              • SPC

                KB is a supply solution first. S,, not an affordability one

              • SPC

                KB is a supply solution first (and not really debt as all are sold). Second it is an affordability one – not building large stand alone homes on sections.

                Sure it does not cover the equity/finance side as well.

                In terms of process that’s the later stage issue, when they are built ….

                There is the land leasing side of equity share – where the government builds on former state housing land this is an option (no debt involved). Prefab builds of a one bedroom type with extra bedrooms later would increase the front up affordability.

          • Patricia Bremner 2.3.1.1.2

            SaveNZ Yes some may have a wait to achieve their dream of a home, but it will be possible. The fact 39000 applied tells Phil and the Government they are on the right track and this model will suit a large number of people.
            Public rentals (State houses) and private rentals are two different beasts.

            To qualify for a State home (Public rental) a tenant will need to be on a limited income or have special needs.
            To qualify for a private rental a tenant needs to be able to meet the market rental price.
            Those between the two extremes will qualify for a rental supplement.
            With the advent of more houses and a greater variety, rental costs will stabilise, and those home owners in it for quick turn around will not prosper.
            Those in housing for the long haul will want stable tenants there for years. Also as rents stabilise, people’s incomes will again allow saving for a deposit, coupled with Kiwi saver deposits it should work, to allow modest income people to achieve the dream.

        • Molly 2.3.1.2

          However, they are able to harness the build programme to create and run apprenticeships, and develop communities, and get an SROI that would make any investment in the houses a good one. They could also directly invest in designing and manufacturing well-designed kitset homes to reduce the build cost.

          They choose instead to follow the same pattern that has contributed to rising housing costs for all, whether renting or buying.

          It is not solving the underlying problem of inflation of housing costs while wages and income remain stagnant.

        • The State houses are different to Kiwi build and different to the Affordable homes, and ofcourse private builders etc. Phil is considering “shared equity” “Leasing” and other ownership models.

    • SPC 2.4

      Renovating 3000 homes does not increase the supply of houses. It perpetuates the status quo where property values so high people cannot afford to own, and rents too high for many.

      Sure, replacing the 3000 costs more, but using the same land to bring in 7000 more homes has the desired impact on supply, will bring down land values and rents.

      State intervention in the market on this scale is not “Blairite”.

      • SaveNZ 2.4.1

        Maths does not work there SPC nor is the practical reality.

        If ASB are right and 25% of houses are being bought by foreign buyers in Auckland driving up prices then that is the practical starting point of control, rather than evicting vulnerable state tenants so richer homebuyers who may have just arrived in NZ can fight against 38,999 other applicants in a free for all.

        The government should be helping those at the bottom with housing, not being amateur developers for the middle classes.

        Before the national government did their damage, houses and land were half the price.

        Controls on new builds via building controls aka 10% have to be affordable, or immigration controls so that Auckland isn’t sliding down the OECD scales every year with poverty, might be more appropriate than promising a pitiful amount of houses trickling out over a decade which are not aimed at those in the worst straits.

        • SPC 2.4.1.1

          1. No one is going to be evicted. There will still be the same number, if not more state houses.

          2. Foreigners are not able to buy KiwiBuilds, nor any existing property in future.

          Your leave it to the market, and clip 10% of affordable to that is the Blairite option. The 10% would cost no less than KiwiBuild by the way and there would be less of them and thus the market would remain overpriced.

          In the end, all you propose is less immigration – how much less than the government?

          • SaveNZ 2.4.1.1.1

            Permanent resident can apply to buy Kiwibuilds to become a permanent resident all you need do is be in NZ for 2 years. You could just be a foreign student and convert to permanent resident visa for example…

            “Permanent Resident Visa
            If you’ve been a resident visa holder for 2 years or more, and can show a commitment to living in New Zealand you can apply for a Permanent Resident Visa. Once granted, you can live and work in New Zealand permanently and come and go from New Zealand without travel conditions.”

            With this visa you can

            Live, work, and study in New Zealand.
            Travel to and from New Zealand any time you like.
            Include your partner, and dependent children aged 24 and under, in your visa application – if you included them in your original residence application.

            Kiwibuild should have at least been aimed at people who are more deserving as a criteria aka essential workers who work in Auckland or those who had contributed to the community or faced hardship growing up in NZ and could do with a break…

            • SPC 2.4.1.1.1.1

              Yes, it could/should have been restricted to citizens. But we are a country that does offer much the same to permanent residents, as citizens, in other areas as well.

              There is a case, I suppose, for having a favoured buyer cateogry for essential workers – but then many of these may not be in a position to save a deposit to buy and still need help remaining in the city, so another approach should be used for them.

              The prime purpose of KB is increased supply of housing. So much so, it has a very high income cap, to guarantee homes are sold off quick as. So there is money to build more.

              • SaveNZ

                What is the point of increasing the amount of housing by such a pathetic amount aka 10,000 if they even do that, when each year 35,000+ new residents and hundreds of thousands of work permits are being given out on $20p/h for construction etc to make the aforementioned houses and luxury hotels? Does not make any sense to then make the Kiwi residents pay for this folly and evict the state house tenants on top as well as pay for the health and congestion.

                The government has become a welfare provider for poor business and lost their way.

                They should be providing housing for those who need it most aka renters before they even look at people on $120 – $180k with a deposit…

                Or they do those schemes where they take an equity share to get someone on the ladder…

                There are many ways to help in housing, giving away public land, should not be one of them. I would be more supportive of Kiwibuild if the land was leasehold with very low government leases. At least the land gets paid for and provides income for the government.

              • Molly

                “But we are a country that does offer much the same to permanent residents, as citizens, in other areas as well. “
                Such as the right to vote. Why is that?

                And the response does not give a justification as to why that should be the case in regards to providing housing.

            • SaveNZ 2.4.1.1.1.2

              With immigration the first thing is to tighten up permanent residency – we have people just flitting in and out, using our health system and resources or even like this guy committing a crime https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12077932!

              Should have to be here 10 years with 3/4 of time in NZ and meet a criteria of good behaviour (and visa is revoked after being convicted of a crime) and taxes paid to qualify for free health care for example or Kiwibuild in NZ.

              It’s not like Kiwis are actually really well off… many are struggling and should not be working 60 hours a week so that someone wealthier who does not work In NZ, can sail in and out of NZ getting free everything as they often have little taxable income, while the locals pay their taxes for them.

      • SaveNZ 2.4.2

        Also demolishing 3000 houses immediately worsens the housing crisis as seen by what the Natz have done and it’s taking years and years for the new state house to arrive in their place, not even sure if any have yet, only the $800k private sector ones! Are Labour going to follow the Natz path?

        • SPC 2.4.2.1

          The plan is not to empty all the land of houses before building anything. It’s a phased operation, done in installments – to minimise impact on existing HC tenants.

    • Draco T Bastard 2.5

      Government should actually look at where the greatest need is, (renters) and have every house and piece of land they own available for an affordable rent. Then people can actually save money to get a deposit to buy a house for themselves! That would be a better strategy as the rents can cover over time the cost of the new builds just like private rental developers would do it.

      If the government house you live in has a lifetime lease why bother buying?

      Really, the big problem is actually buying houses at all. If all housing was state housing with appropriate rules then we wouldn’t have the problems caused by a housing bubble.

    • Adrian Thornton 2.6

      @SaveNZ +1

      “That’s for the market to determine once they are built”..spoken like a true new labour blairite.

      Turn Labour Left!

  3. DH 3

    This is an affordable house;

    Asking price: $98,000
    https://www.trademe.co.nz/property/residential-property-for-sale/auction-1675277336.htm

    And this;

    Asking price: $195,000
    https://www.trademe.co.nz/property/residential-property-for-sale/auction-1531934449.htm

    As everyone in property knows it’s the land that people can’t afford and if this Government really did want to make houses affordable the solution is obvious.

    • David Mac 3.1

      When there are many 600k houses for sale that $195,000 house you speak of will be $180,000.

      Affordable kiwibuild homes aren’t being built for Service Station cashiers. They’re being built for a Police sergeant and his senior theatre nurse partner. Benefits for low income earners aren’t in brand new Kiwibuild houses, they’re in the glut of rentals hitting the market as those that can afford to move into their new $600k places do so.

      Steam escaping from punctures in the housing bubble eases the pressure on all of us.

      • DH 3.1.1

        I think you might be a tad optimistic there David. The housing market has always been auto-correcting, any sign of a glut and developers stop building new houses & wait for prices to go back up again. With immigration-driven population increase a near certainty it’s simply a matter of time for any glut to dissipate.

        Kiwibuild still relies on the rest of the market to keep building houses and Kiwibuild will almost certainly cause the market to build less houses. People aren’t stupid, they’re not going to build houses to lose money.

        State housing worked because state houses were outside the market.

        • David Mac 3.1.1.1

          For developers, the money for nothing is in high end builds. They prefer the 30% mark-up on $5000 tapware over $2500 tapware.

          I think Twyford is trying to make it worthwhile for them to aspire to build $600k houses rather than $1m ones.

          They don’t stop building because they feel we might be approaching a glut. They stop building because to do so is to go broke. Twyford has the power to have a degree of control over that by doing what he is doing. eg: Easing financing pressure with a Govt guarantee to buy off the plan etc.

          • DH 3.1.1.1.1

            Will all due respect that’s nonsense. Construction companies and builders build houses, developers buy land and develop it. People keep confusing houses with ‘houses’. You build a house, you buy a ‘house’ which is a combination of house and land.

            Kiwibuild houses are $600k not because they’re expensive to build but because the land is expensive. For house prices to fall the land price must fall and Kiwibuild isn’t bringing down the price of land.

            • David Mac 3.1.1.1.1.1

              I think you’re being pedantic. Yes, when I say developer I’m talking about those that collectively walk into a paddock and walk away leaving a new suburb.

              Yes, we agree re: the gravitational pull of ‘The price of consented land.’

              Developing regions is one way a government can have a bearing on that. 10 acres for housing around a revitalised Whangarei Port vs potential for homes around Auck Port.

              You picked me early on, I am a hopeless optimist, seems to work best for me. I get more of a kick looking at how to make things work than I do looking for why failure is inevitable.

              • DH

                Not pedantic. People landbank when house prices start falling, they care not if the builders & speculators go broke.

                • David Mac

                  Yeah, I think the landbanking is a by-product of flat or reversing housing market conditions:

                  When house prices flatten or reverse, housing land mirrors the movement.

                  I think you’re right re: all the $ are in the land DH. What do you think we can do to ease that pressure or lighten the load. The solution in almost every heavily populated world city seems to be: build up.

                  • DH

                    From the state perspective it seems obvious to me the solution is to remove land from the equation.

                    Kiwibuild could be (perpetual) leasehold land where the state retains the title and permits people to build their own house. Charge a peppercorn rent for the land.

                    Covenant the title so if people sell their house or rent it out the ground rent goes up to market rates. That would prevent anyone from making a capital gain and keep the speculators out, restricting it to only those who need/want a house to live in. They’d get a cheap house but at the cost of not making any capital gain, those wanting that can buy in the normal market

                    It’s that simple really. The economcis would probably add up too, over time they’d do away with accommodation supplements which would probably pay the interest on the money borrowed to buy the land.

                    • David Mac

                      I think that’s an idea with potential DH. I wonder if it’s close to some programs that are building houses on Iwi land. A traditional hurdle with that has been banks reluctance to finance a build on land owned by 100’s of people. If the payments stop, selling-up the asset problematic.

                    • DH

                      Finance wouldn’t be an issue, it would have state backing.

                      It would be the same as the affordable houses I linked above, only difference being the (nil) ground rent for the first owners. There’s nothing new or complicated about it, leasehold land has been around for centuries.

                      The only hard bit is keeping out the profit seekers but that’s not so bad, would just need occasional fine tuning.

                      You could expand on it but the core principle is it would be genuine affordable housing and not the sacharine excuses we get fed. It wouldn’t hurt the regular housing market much because that’s for freehold land and this is for leasehold land.

                    • greywarshark

                      If state owns the houses and Maori own the land, the houses being removable if the terms are flouted unreasonably, there could be Maori housing installed by the state, and paid for by mortgage to a State Advances Corporation as we used to have.

                      At the same time there would be a package of training and jobs to enable the people to pay for their houses. That seems a way around the problem of not being able to receive bank loans. It would succeed probably on a 70/30 basis and that would improve over the years. NZ would benefit greatly, even though there would be problems and failures. Can’t guarantee success with every step but the journey of 1,000 paces starts with one after the other.

                • Gabby

                  Pedantic or ‘pedantic’?

          • greywarshark 3.1.1.1.2

            Or government could tax the empty land. And not allow losses of one building to balance out that of another, or reduce income tax or whatever.
            Housing is important, and each piece of land or house and land could be a separate entity and require its own tax number. Once it was so girded up with bureaucratic gunk and nothing could be hidden the profitable game would have to shift to selling us something else we need.

        • That is true, State houses will be outside the market, as will Kiwibuild homes. You and your mates will have to compete to build the homes dearer than the “Affordable homes” ….you know, the two to twenty million ones.

    • dV 3.2

      This is an affordable house;

      Except that the ground rent is $400 pw

      • DH 3.2.1

        Which was exactly my point dV. Houses are affordable, land is not.

        If you were genuinely wanting to make houses affordable what would you address, the house or the land?

        • Draco T Bastard 3.2.1.1

          If you were genuinely wanting to make houses affordable what would you address, the house or the land?

          Density and getting people to move out to the regions by developing the regional economies.

          Making more land available on the outskirts of a large city just makes living in that city cost more.

          • Patricia Bremner 3.2.1.1.1

            That is why Phil is looking at a corridor of transport coupled with homes Go Phil.. “Lets do this!!” The wonderful thing is planning and stoic vision. Go Phil.
            Stoic, because National have said he’s a twerp. Developers hate him, but everyone else says “Yes, do this for us Phil”

    • joe90 3.3

      Asking price: $98,000

      Yeah, nah.

      The perpetual renewable 21 year lease is currently fixed at $20,800pa until 2029.

      Asking price: $195,000

      Again, nah.

      With leasehold pay a small price plus $530 pw which is fixed until 2029 and renewable thereafter.

      edit: dV snap!

    • SaveNZ 3.4

      DH, that is the right wing argument aka it is the land that is the issue, until they changed the zoning with unitary plan and encouraged offshore investment everywhere, houses and land were half the price.

      Also weird that the free land from the public still makes a 1 bed Kiwibuild apartment $500k?

      Not sure how you explain that? Apart from routing from tax payers.

      • DH 3.4.1

        Again that’s my point SaveNZ, it’s not free land the state is selling it for market price. They can’t really discount it the way they’re doing Kiwibuild now, that would be gifting windfall capital gains to the buyers.

      • greywarshark 3.4.2

        Routing from taxpayers.
        Is that where taxpayers are utilised as raw material to make up for the lack of proper planing of resources to be kept for THIS country’s citizens. So taxpayers and assorted citizens ie horizontally, in a herringbone pattern and the spaces between filled with flexible cement so we are routed, but can get free to go to our part-time temporary work to enable us to keep our body mass firm, and then come back and lay down in our reserved space!

        Some might prefer that to sleeping in doorways on sheets of cardboard, or in cold cars. The spaces could even be sublet if the citizen happened to get a night-time job.

        It sounds ridiculous but when there is so little concern about the wellbeing of so many by so few, it is not impossible that people could be used as resources for things not dreamed of now.

        This was interesting. They would have a place for people on the move, or waiting for a flight out of the city etc. but not to be used by a mechanical government working on how to efficiently deal with the citizens it doesn’t want to bother with.
        Sleeping pods
        https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11913700

        https://www.stuff.co.nz/business/property/96311581/move-to-stack-auckland-renters-eight-to-a-room-in-pods-worries-industry

    • AsleepWhileWalking 3.5

      Leasehold is not affordable or as liquid as freehold.

      Good grief.

  4. Gabby 4

    Unless the glut of rentals spurs an even madder rush of poor people into Auckland of course.

    • SaveNZ 4.1

      The poor people are already here Gabby and being imported in at alarming rates so that others can profit on the difference between their labour and the contract price… or even make them pay for the job.

  5. mauī 5

    Labour’s $650,000 “affordable” house scheme.

    Mana Party and Hone would have built 40,000 state houses by now if they were elected in 2014 and a major part of Government.

    I know what I would rather have.

  6. greywarshark 6

    This is a major complication. Bugger these old sayings that remain true – You can only reap what you sow’ – and we have not been doing any groundwork on our needs for years under darling Gnashional and smiling smart donkey.

    http://www.radionz.co.nz/national/programmes/morningreport/audio/2018655266/sky-high-nz-construction-costs-here-to-stay-expert

    money housing
    8:15 am today
    Sky-high NZ construction costs ‘here to stay’ – expert
    From Morning Report, 8:15 am today
    Listen duration 3′ :09″

    Staying with building, the construction industry is warning there is no end in sight to the high costs that are holding up some building projects.
    Industry insiders say building materials and labour costs are rising and that’s caused some jobs to stall.
    Their comments follow complaints by the hotel company Sudima that its ridiculous the cost of building in New Zealand is almost 40 percent more expensive than in Australia.

    If someone knows of an in-depth piece on the causes of this from start to result, perhaps a link could be put up to see how many pigs have their hooves in this trough. A trough leading to the Slough of Despond that someone should feel.

    (wikipedia – The Slough of Despond – “swamp of despair”) is a fictional, deep bog in John Bunyan’s allegory The Pilgrim’s Progress, into which the protagonist Christian sinks under the weight of his sins and his sense of guilt for them. )

    • dukeofurl 6.1

      Sudima is talking about the smaller pool of contractors who do these jobs. Sydney being much larger with ongoing high rises has a bigger pool of contractors to bid.
      Auckland has a reputation of being a rigged system amound the medium sized contractors.
      Our wages are still not as high as Sydneys and for bigger builds local contractors can bring in steel , etc from oversea

      • SaveNZ 6.1.1

        Perhaps not having to rebuild half the housing due to bad workmanship, planning and poor materials could also be addressed. Seems to have got worse since the 1980’s and relied on the Rogernomics trickle down, deregulation of building and cheap hires and foreign investment…

    • RedLogix 6.2

      40% dearer than Australia is a conservative estimate. For most ordinary residentials I’d put it closer to 100%. It’s little to do with the size of the market, similar to say Victoria, nor shipping which is incredibly cheap these days.

      The thing which truly gets me, it’s the same damned suppliers in most instances.

      • Draco T Bastard 6.2.1

        The thing which truly gets me, it’s the same damned suppliers in most instances.

        And probably using the same supply – NZ timber.

        As I’ve said – need to stop exporting our resources so that we can use them here and thus keep prices down.

        • McFlock 6.2.1.1

          Yup. Which is why the regional development fund is behind a timber prefab plant in Gisborne.

          • Draco T Bastard 6.2.1.1.1

            And how does that stop our resources being exported?

            • McFlock 6.2.1.1.1.1

              Because the production scale means we can use them more cheaply so the finished products are more profitable.

              It’s not that we’re outbid on pinus radiata by exporters that’s the problem.

              We don’t have large enough fabrication producers here that have production economies of scale so now shit can be exported, bodged together overseas, and imported again for cheaper than someone trying to get a plant up and running. Not to mention trying to break into supplying a few construction players who deal in larger scale purchases and already have existing supply chain relationships.

              But a decent sized modern facility would be able to supply the NZ market with prefabricated parts at a competitive price, lowering construction costs.

              • KJT

                Nope. It’s because we only have two bulk suppliers of building materials in New Zealand. Just as we have only two major supermarket chains.

                Once we were getting radiata 4 x 2 ‘s from a local mill for a quarter the price of the building suppliers. Didn’t last long. The mill was told to stop supplying us, or the building suppliers would stop buying from them.

                • McFlock

                  True, that’s the flipside of the bulk building suppliers.

                  But I think the new prefab factory will help bypass some of that.

        • KJT 6.2.1.2

          It is!

      • Hongi Ika 6.2.2

        Fletcher’s have to make a profit on the supply side to cover the losses on the commercial construction sector, also limited suppliers in the marketplace.

  7. Gabby 7

    Maybe the State needs to get back into sawmilling.

  8. Herodotus 8

    Building 9k of houses in this armrest is great , yet why replace 3k of state houses with 3k of state glhiises, sure kiwibuild is great but why not INCREASE the no. of state houses in the area say 4.5-5k then we have added dramatically to the state stock, achieved a good no. of kiwibuild and part funded the project with 1-1.5k houses sold to the market ? everyone wins

  9. The Fairy Godmother 9

    This is housing intensification. There will be the same or more capacity of state housing but that will be about one third of the houses built. There will be one third low cost and one third market. State housing tenants are being consulted and needs taken into account. They will be moved into a home nearby so they can continue to attend the same school place of worship etc. However if the tenant says they would rather move somewhere else they will. There is much more consultation and info being given to tenants this time round. Once the first stage is done it will be an easy matter of moving tenants into Nrw homes. There is a mix of small apartments and larger homes. It seems like the mistakes of Tamaki have been taken into account. The home are modern and warm and dry.

  10. greywarshark 10

    The problems of lack of housing and other goods for returned servicepeople after WW2 forced thoughts about innovation. Perhaps going ‘back to the future’ is necessary after this present proplonged period of austerity and cost cutting brought about by comfy armchair economists who can’t bear the sharp shock of reality beyond the padded arms or the whirly office chair.

    http://nzetc.victoria.ac.nz/tm/scholarly/tei-WH2-2Hom-c17.html
    ‘The Home Front Volume II’
    p.807
    In the election campaign of 1943 both parties promised houses. Labour reminded that it had built 15 000 State rental homes before the war closed in, and promised expansion at the war’s end which would complete 16 000 dwellings a year.62 Holland declared that houses would be priority number one if the National party were returned. He held that rents were too high and proposed that tenants should be able to buy State houses.63

    During 1943, the inflation of house prices was curbed by the Servicemen’s Settlement and Land Sales Act, which established the Land Sales Court, a court of record, the consent of which was necessary for all land transactions. It worked through local Land Sales Committees which settled prices of house properties based on the value in December 1942, increased or reduced to a fair value according to improvements or changes….

    p.805
    There were distressing cases. A woman, her three children and husband returned after five years in the Air Force, were living in one room. A returned soldier, whose wife was pregnant, was paying 25s for a room 10ft by 12ft, up two flights of stairs, the bathroom shared with 12 other tenants. Another, whose four years in the Army had included Greece and Crete, was living with his wife on the sunporch of a five-roomed house occupied by four families totalling nine adults and two infants. A couple lived in a basement flat with no fireplace, poor ventilation, continual dampness and a bedroom 6ft 6in high. An ex-serviceman was living in a ‘garage’.51

  11. Draco T Bastard 11

    This will comprise approximately 3,000 new state houses, 3,500 new KiwiBuild and affordable homes, and 3,500 market homes.

    I do wish that they’d realise that they shouldn’t be selling any of those homes. Make them all state houses all the time with some discernment of who lives in them from those desperately in need to professional people.

    I am determined that the local community benefits from this re-development and are not priced out of the new homes.

    That’s actually really easy to do if you don’t sell them.

    • greywarshark 11.1

      True. DTB +100

    • Herodotus 11.2

      Whist agreeing with you sentiments, if part of this intensification of HNZ land is not utilised to also accomodate in part Kiwibuild, where will the govt. find land that can also fulfil this undertaking and within the (increasing) price bands?

      • greywarshark 11.2.1

        Horrors, unconventional methods might have to be used. An area from a larger section than a state house needs might be fenced off, and two or three tiny houses to provide for couples with only one child, to get them settled somewhere. Ideally they would all meet and agree to a set of guidelines plus some definite conditions first so as to enable reasonably harmonious and tolerant living standards.

      • Draco T Bastard 11.2.2

        find land that can also fulfil this undertaking and within the (increasing) price bands?

        What undertaking? Producing affordable housing that people can buy?

        They won’t be doing that at all and shouldn’t be.

  12. greywarshark 12

    Further
    p.811
    (‘Churchill’ housing)
    In March 1944 Churchill promised to bridge the housing void for the people of Britain with, among other measures, half a million prefabricated houses.86 Not surprisingly, some New Zealanders hoped page 811 for a similar solution to their own immediate problem. At a meeting of South Island local bodies, the Mayor of Christchurch urged, in view of the likelihood of science in the next few years producing cheaper and better building media, that the government adopt a scheme like Britain’s for cheap houses that could be erected quickly even if they would have but a short life. Other speakers also favoured factory-built houses in the emergenc

  13. greywarshark 13

    p.804
    Wellington was not alone in such investigation. Early in 1943 a Christchurch City Council survey of 4122 dwellings, 639 apartments, 97 boarding houses and 394 combined dwelling and business page 804 places found 49.35 per cent to be satisfactory, 45.9 per cent unsatisfactory but repairable, 0.7 per cent overcrowded and 4.13 per cent due for demolition.

    Many houses which looked attractive enough from the street were divided into rabbit warrens, and rents for rooms containing a bed, small table, chair, sink and cooker ranged from 6s to 27s 6d. A single block of apartments contained 99 units housing 116 people; they had eight lavatories, five wash-basins, seven baths and two wash-houses; one room measured 8ft by 7ft 3ins.

    This survey deduced that many recently built flats were too expensive for men with families on £4 to £6 a week, who perforce had to share dwellings.42

  14. SaveNZ 14

    You can get a kitset 3 bed house for $120,000 and tiny houses for less… … seriously the government is being ripped off and blind. It has land and could just add on to existing state houses extra flats and add other housing onto sections. Especially when their plan is so weak aka only increase state housing by 300 in a decade.

    I’d prefer to see the nurses get a pay raise than free public land given away and taxes paying for expensive houses and flat developments, that our taxes have paid for.

    • No-one here has mentioned the infrastructure. Piping in Auckland is needing replaced, or extended.

      • SaveNZ 14.1.1

        Don’t worry Patricia, the infrastructure is being paid for by the rate payers not the developers as our officials don’t expect the construction industry to pay their own bills when the ordinary folks can be forced to do it for them.

        As for the infrastructure there are ways to have completely self contained dwellings off the grid in both electrical, water and sewerage… and if somebody really was interested in solving the affordable housing crisis they could already have done so and then made a longer term plan. This is more using the Natz approach to sell off public assets and keeping housing prices high.

        Under Kiwibuild 2/3 of the state house land will be sold off and only 300 extra houses planned in over a decade.

        Weird how so many are blaming land prices for housing prices then ok with the government giving away 2/3 of their state land holdings under these Kiwibuild models so developers can profit from it.

        So in a decade when government need more state houses with the increased population, the state has to buy back land for state housing at great cost after giving it away. Sounds like the high country tenure in the cities!

        Not only that I’m pretty sure that you can get more affordable 1 bedroom apartments in the CBD for under $500k and then you don’t have to commute, so it’s actually increasing the lowest house prices as well as giving away prime land! Crazy!

  15. Stuart Munro 15

    Ultimately the scheme is compromised by a slavish devotion to failed neo-liberal values.

    The whole edifice depends on selling into the market for continued finance – but a large proportion of those needing housing are presently excluded from that market by recent real estate inflation. Because of its dependence on market finance no structural solution to the financial causes of the housing crisis is contemplated.

    It will pass over those most in need, and ultimately not achieve a change on the scale required to resolve a problem quite properly described as a crisis.

    Remember Rogergnomics? It was going to make us all rich. I was richer when I left school, before I did all those 116 hour weeks.

    Labour need to go to the mattresses on this one – and the mattresses means Savage, not Douglas.

  16. KJT 16

    The answers, as we all know, is CGT, restrictions on foreign buying, tax treatment of housing the same as other investment, restricting immigration to the same levels as the USA or UK, wealth taxes, inheritance taxes (We can exempt up to an average price house per family), and most of all, building thousands of low priced State rentals.

    We all know that land prices have to drop. Too much of our GDP is disappearing in bank interest, for loans to buy land. Private debt, is out of hand.

    Half of most peoples incomes are going into housing, Farmers profits are mostly going to their bank, and their is little investment in productive companies, or infrastructure.

    A re-balancing is essential.

    However the first Government to have the courage to do, it will only last one term.

    • greywarshark 16.1

      Labour can do it. They are good at making bold moves. They can recompense us somewhat for being so superior that they knew best and could just do the dirty on their supporters to carry out the policies that Treasury and the richer countries economists recommended. The little cringers. Now they can see that it wasn’t fit for purpose. Of course it was a case of TINA then. The backward flip is TINA now, so come on you soft blabbermouths and comfy chair warmers.

    • SaveNZ 16.2

      UK has all the property taxes under the sun, but still completely unaffordable because they allow foreign buyers to buy up ‘gold bricks’ in the UK in particular, London. No matter how many taxes are put in place the only thing that will stop the issue, is a complete ban on foreigners buying there, until things catch up.

      In NZ we have even more issues, because we allow people who live in NZ for 2 years to get permanent residency which effectively gives them every right as a citizen forever while they don’t have to do anything much as a citizen and can just leave the country work else where while getting all the freebies from our government due to their ‘low income’, while taxing the working residents more who have less money and actually contributing. Time to have permanent residency requiring at least 10 years of criteria like paying taxes and living in NZ before they start to get the freebies and not being given to their partner’s, children and relatives!

  17. KJT 17

    The worry is the new houses will be a ghetto of overpriced rabbit hutches, like Hobsonville Point.

  18. CHCOff 18

    It is a STUPIDITY that NZ society as a whole cannot afford to keep it’s real assets while the population chases shadows in speculative property markets with what diminishing wealth it retains.

    It’ls also one way to encourage and finance foreign totalitarian players.

    On the positive side, well..

    NZ1st!

Recent Comments

Recent Posts

  • Strong first week of firearms buy-back events
    The first full week of the firearms buy-back and amnesty has produced a strong turnout as events roll out nationwide for the first time. “Momentum is slowly starting to build as community collection events are held across the entire country, ...
    18 hours ago
  • New digital service to make business easy
    A new digital platform aims to make it easier for small businesses to access services from multiple government agencies, leaving them more time to focus on their own priorities. Prime Minister Jacinda Ardern and Minister for Small Business Stuart Nash ...
    7 days ago
  • Million-dollar start to gun collection events
    Million-dollar start to gun collection events  Police Minister Stuart Nash says a solid start has been made to the gun buyback and amnesty after the first weekend of community collection events. “Gun owners will walk away with more than ...
    1 week ago
  • Praise after first firearms collection event
    Police Minister Stuart Nash has praised Police and gun owners after the first firearms collection event saw a busy turnout at Riccarton Racecourse in Christchurch. “Police officers and staff have put a tremendous effort into planning and logistics for the ...
    1 week ago
  • New Police constables deployed to regions
    Seventy-eight new Police constables are heading out to the regions following today’s graduation of a new recruit wing from the Royal New Zealand Police College. Police Minister Stuart Nash says the record high number of new Police officers being recruited, ...
    2 weeks ago