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Sell state houses? Not like this

Written By: - Date published: 9:42 am, September 16th, 2009 - 25 comments
Categories: housing - Tags:

National has announced that it will begin offering to sell 3,800 state houses to tenants living in them on market rents.

I don’t automatically oppose selling state houses but there needs to be four conditions:

  • Housing NZ must use all revenue from sales to buy new houses – we don’t want the amount of housing available for the most needy decreasing.
  • It must not sell all the houses in wealthy areas only to construct state house only neighbourhoods – the poor and the wealthy should not be physically separated by government policy.
  • The houses must only be bought by their current tenants – we don’t want them claimed by wealthy investors, locking out the poor.
  • There must be a caveat on the titles to the properties preventing them being rented out by a private landlord – that way they can’t be bought out by property investors as happened in the 1990s.

Put together, these measures would help the houses stay in the hands of those on low incomes, keep the houses cheap because the price wouldn’t be dragged up wealthy people buying to be landlords, boost home ownership rates, and create a bigger pool of cheap housing.

It seems that National has only put one of these in place, the third. That’s just going to see the houses on-sold to investors. As in the 1990s (and the 1950s when National first started selling state houses), the former state houses will end up being rented out at more expensive rents.

Under National’s policy, there will be a greater concentration of the private housing stock in fewer hands and a smaller pool of cheap housing. But of course, that’s the whole point.

25 comments on “Sell state houses? Not like this ”

  1. ieuan 1

    The whole things seems like a win-win to me.

    State house occupants get an opportunity to own their home and this frees up money for the government to build (or buy) new state houses.

    Sure there has to be a few rules to ensure the system is fair and the stock of houses aren’t reduced but I can’t really see the problem.

    As for ‘It must not sell all the houses in wealthy areas only to construct state house only neighbourhoods – the poor and the wealthy should not be physically separated by government policy.’

    If the government sells a state house in a ‘wealthy’ area and uses the money to build (say) two houses in a poorer area isn’t that two new families that are housed??

    Hell I’d like to live in a ‘wealthy’ area – its not government policy that prevents me from doing that.

    • felix 1.1

      Just a couple of things:

      Sure there has to be a few rules to ensure the system is fair and the stock of houses aren’t reduced but I can’t really see the problem.

      That’s kind of the point of the post – those “few rules” you mention aren’t in place. That’s the problem.

      If the government sells a state house in a ‘wealthy’ area and uses the money to build (say) two houses in a poorer area isn’t that two new families that are housed??

      As above, there’s nothing to say that they’ll spend it on more houses at all. They may just sell the houses in wealthy areas to pay for – i don’t know – tax cuts, an extra lane on SH1 and Bill English’s vet bill.

      Hell I’d like to live in a ‘wealthy’ area its not government policy that prevents me from doing that.

      Maybe so, but the point is that govt policy shouldn’t be reinforcing the existing inequities and barriers in the market.

  2. Tom Semmens 2

    National’s handling of housing in their last term in government will forever be a blight on their record. It was – and is – part of a major public health disaster.

    Plus ça change, plus c’est la même chose.

  3. felix 3

    I wonder how many of these very houses will end up being rented back to us, the state, on “zero risk” terms.


  4. Monty 4

    You logic is typical of the socialist classes. So say a ststehouse is sold in Orakei – according to you logic Housing NZ should then build another house in the same area – never mind that to d so would mean the section alone would be the same price as would be paid for 2 or 3 houses in another area – and therefore depriving 2-3 families of the opportunity of a state house – clever socialist –

    • snoozer 4.1

      It’s about balance, providing affordable housing while not creating ghettos

      • indiana 4.1.1

        Where are the current Ghettos in New Zealand?

        • Maynard J

          Ask Key – he might have had a list of them to tour when he cared about the underclass a couple of years back. Probably got rid of that list now, does not need it.

        • burt

          Start by looking at areas with the lowest level of private ownership.

          • Marty G

            don’t confuse cause and effect here. State housing exists for the poorest people, so of course the poorest people live whee the state houses are

      • Swampy 4.1.2

        There is already policy to address “ghettos” for HNZC. Therefore there is no need for this policy to reinvent it.

    • felix 4.2

      So don’t sell it, genius.

    • Maynard J 4.3

      Your logic is typical of anyone who would use the term ‘the socialist classes’ – short sighted, shallow and frivolous thinking, characterised by and inability to think beyond what is right in front of you and obvious to anyone not in a coma.

      Look at me, I am a capitalist. More Houses = good. More = good. It is so simple! It sure is simple, when the person doing the ‘thinking’ is as such.

      • Pascal's bookie 4.3.1

        What’s funny is that he thinks ‘socialism’ is the state paying market rates to buy land off people. What a bunch of teabaggery.

        Wouldn’t know a socialist if one nationalised his right bollock.

  5. BLiP 5

    You gotta wonder about National Ltd – on the one hand its own banker is warning against inflating the housing market and fueling a debt-driven false dawn to the end of the current Depression and then, on the other, dumping thousands of houses on the market.

    Does National Ltd have any idea what they are doing? Is housing now considered a non-core business and National Ltd are dumping the country’s portfolio? Is National Ltd doing a duck’n’dive to hand over its housing stock to their speculator mates before introducing a capital gains tax for the rest of us? Is this scheme part of a wider social engineering strategy to locate the poor into ghettos for better management?

    Given John Key’s proven duplicity how will we ever know?

    • Swampy 5.1

      It is deghettoisation, allowing the sale of houses in some of the existing ghetto areas will be a positive impact on the community as well proven in the past. I have numerous friends who live in ex State houses that they own in some of the rough areas, this has been very good for their communities.

  6. Draco T Bastard 6

    I’d support selling state houses to the tenants with the rules included:

    1.) The house is sold at cost price. For existing houses this isn’t too hard to determine at todays rates for builders, land and materials.
    2.) There is a caveat on the house that it can’t be sold by the buyer for at least 5 years and preferably 10.
    3.) The money raised by the sale is used to build another house in the immediate vicinity. This would be difficult in an already built up area so one built in a similar area would have to suffice.
    4.) The houses are brought up to insulation standard before sale.

    I’m also not opposed to the houses built being condominiums. This would actually have advantages over stand alone homes especially in transport (Public transport would be more efficient), community (people would be more likely to get to know there neighbours) and land use (Which, contrary to the developers spiel, is actually limited).

    • Swampy 6.1

      Every condition will trip up some genuine person and require an army of bureacrats to police.

      Why is it necessary to build another house in the immediate vicinity. This policy is about deghettoisation, why contradict that.

  7. Jack 7

    I used to live on a housing estate in the UK. The estate was reasonably mixed – a number of people had taken advantage of the chance to buy their council house, a number of people hadn’t. We used to regularly get brochures through our mailboxes from housing firms offering to loan us the money to buy our council house, and then buy it off us straight away at a higher price. So people too poor to afford the already subsidised purchase cost of the house were basically having a large pile of cash dangled in front of them. Of course, there was a policy that anyone who’d bought a council house became ineligible for council accommodation thereafter – but I bet that a lot of people didn’t know that.
    So yes, I’d be seriously in favour of setting a time limit for resale of owner-purchased state housing. Five years seems reasonable (I am informed that the average duration of ownership of a particular house is 6 years).

  8. Jasper 8

    Aren’t state houses assets?

    Therefore no assets should be sold in the first term.

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