The Sallies do not like Government’s housing policy

Written By: - Date published: 8:30 am, February 10th, 2015 - 61 comments
Categories: class war, housing, john key, national, quality of life, Social issues - Tags:

John Key’s state of the nation announcement of the Government’s intention to divest itself of state houses to help social housing providers has struck a problem.  The Salvation Army, touted as one of the likely recipients, has expressed significant reservations.  From the Herald:

A charity tagged as a likely buyer of state houses says it is reviewing its involvement unless it can get either more capital from the Government or a very low price for the houses.

Salvation Army social policy director Major Campbell Roberts says the army has brought in consultants to crunch the numbers and found that it could not do any better than Housing NZ unless the Government put up some of the capital required to bring state properties up to acceptable living standards.

What is encouraging is that the Salvation Army has also expressed concern for the tenants and thinks it be desirable that they be involved in management of the housing.

[Roberts] says it would be morally wrong for the army to force tenants out for redevelopment without their consent, and that any state houses that are sold should go to genuine local community organisations part-governed by the tenants themselves.

“I think it’s essential … tenants are engaged in this whole exercise. If [not] it’s going to be a disaster.”

The article also contains some historical and international information which provides valuable context to the debate.

New Zealand’s social housing sector is small, with only 5 per cent of all occupied homes owned by Housing NZ, councils or community groups. That is the same share as in Australia, and double that of the United States, but far below some European countries such as England (18 per cent), France (19 per cent) and Sweden (21 per cent).

A 2010 report said 32,000 of what were then 69,000 state houses were built between 1937 and 1949, and the state funded two-thirds of all house-building via state housing and cheap home loans into the 1970s. In 1960, 64 per cent of new homes were priced below the median value of existing homes.

However state home-lending ended in the 1990s. The Productivity Commission says new homes priced below the median value of existing homes plunged from 51 per cent in 1989 to 15 per cent in 2011. We virtually stopped building houses for the poorer half of the population.

So historically the State has constructed a huge number of homes and internationally state ownership of housing is not unusual.  Yet this Government refuses to even think about doing something active to address our significant and growing housing crisis.

61 comments on “The Sallies do not like Government’s housing policy”

  1. One Anonymous Bloke 1

    Well, this will make it a lot easier for the National Party to ‘decide’ to give sell to SERCO.

    • adam 1.1

      Military industrial housing. Serco could just add bars and guards – and bang more private prisons.

      Love our ideologically run government – why bother with reality or facts – when you can just let ideology guide you.

      Sheesh at least in East Germany – they were honest about it.

  2. freedom 2

    In the four years since this animation was made, imagine how much Serco has grown.

  3. SaveNZ 3

    Hopefully this will clear up the propaganda that ‘greedy landlords’ are the problem with housing which is a huge MSM discourse to put the blame on ‘the other guy’ and not the government. The reality is there is a shortage of rentals in Auckland and Christchurch so blaming the landlords which seems to be a popular pastime for many is actually just adding to the problem. Auckland and Christchurch need more rental properties and lower priced housing.

    The problem is that there is not enough low cost housing being built.

    “The Productivity Commission says new homes priced below the median value of existing homes plunged from 51 per cent in 1989 to 15 per cent in 2011. We virtually stopped building houses for the poorer half of the population.”

    Currently the old and new RMA are actually making that worse. They are making sure that houses are getting bigger as developers and owner occupiers are doing their own spec housing and with compliant councils, an ‘anything’ goes policy. The RMA means it is building and development no matter what. Amenity and any social good is outside and discriminated against, with development the main gain. The government seems to be selling off government land to developers, who then profit and sell back at market rates. Just another way to rip off the country.

    Who is buying these spec houses? Foreigners and ex pats and current home owners trading up. This is often their family home so the miracle cure ‘capital gains’ tax will not only not work, it will incentivise people to have a greater level of wealth in their family home.

    Bigger houses, more cost to build, higher rents and house prices. .

    All the ‘figures’ showing all the new consents that are supposed to be easing the housing shortage are a joke. Houses being built are often mansions and certainly not for poor or even middle class people. Councils are getting into risky development projects like in Auckland – Westfield which the rate payers are funding. Again the risks are for the ratepayers, and the rewards are for the developers.

    The poorest people should be in state housing and there should also be a mature debate based on real evidence not hysteria, about why there is very little affordable housing being built (cos it is not cost effective) and what needs to be done about it.

    The obvious thing is that some way to make houses smaller and energy efficient with outdoor space for gardens etc so that people can have more quality of life. At present there seems to be mostly apartments being proposed as cheap housing, which has more long term cost for Body corp fees, more risk of leaky failure, and less suitable for children. There needs to be more of a design focus so that cheap does not mean ugly.

    In the UK a percentage of new developments must be low cost. This idea, is not only ensuring lower cost houses are being built, but also meaning rich and poor ghettos are not being created. As usual the devil will be in the detail but this one way to help the problem.

    • Sacha 3.1

      The Hobsonville Point redevelopment project was planned with a proportion of housing for poorer families. One of the first things our glorious PM did when he gained power was scrap that, calling it “economic vandalism”.

      A real solution requires changing the government.

    • Macro 3.2

      Very good points made here SaveNZ.

      The market will not solve the problem. There needs to be Government regulation. That will not happen with the current regime. I have worked in the civil construction industry for a number of years. Over recent years only one development I worked on has been for low cost housing, and it was very small.

    • Sabine 3.3

      when it is more lucrative to not rent than to rent you have an issue.

      I have lived next to a house for three years that was un- occupied for all but three month – the last expat couple that bought the house only stayed for that long before going back overseas.
      the house sold like clockwork every 6 – 8 month, every time for a few then thousand dollar more despite the fact that nothing was done to it.

      currently in my street there are several houses empty after they have been sold.

      the neighborhood where I have my shop, we have now seen the third lot of tenants come through – we see them come and go.

      there is a housing crisis in Auckland, but unless the residential rental market is not regulated nothing will get done.

      If I am land banking, or buying on speculation that after 6 – 8 month I can flip the property with a profit why would I put a tenant in? that is just an unpleasantness that I’d rather not have to deal with.

  4. vto 4

    Yesterday on te radio I heard John Key claim that NZ needs more social housing and that using charities will help with this….

    but this is complete bullshit.

    How does this increase the housing stock? It doesn’t. John Key simply lies again.

    F%$#^&g two more years of Key lies – I cant stand it. Just as well Andrew Little is becoming relentless in his pursuit of Key’s bullshit. First on “cut the crap” re dirty politics, and now on Key’s bullshit on maori sovereignty discussions.

    John Key – Minister of Bullshit

    • mac1 4.1

      It increases the housing stock if the houses sold remain and are not removed for up market housing. It also requires for Key to be right in his assertion by his government spending the income from the sales on new housing stock.

      He however has stated that part of the money will be spent in other ways. That is, as a cash cow for other government expenditure which allows the tax breaks for the wealthy to continue at the expense of the housing of the poor. The amount for other spending has not been quantified. I bet that down the track there will be found less need for state provided housing so that more can go to mitigate this governments’ debt problem of $100 billion.

      It is Grey Power policy to oppose the sale of state housing if the money is not put back into new housing. Grey Power also seeks the new provision of good quality, low maintenance small housing units, outside of the retirement homes which provide most of this.

      If local governments were able to be re-involved in the provision of social housing, this might also be a way to give tenants a say in the running of their housing, as the Salvation Army seeks.

      • vto 4.1.1

        Couple of big ‘ifs’ there mac1.

        You know I just cant understand why the government doesn’t just start building houses……

        Good for the housing crisis. Good for the economy. Good for peoples body and soul. Just good all round… what is there that is bad?

        Does anyone know why they don’t just start building houses (other than dogma and ideology)?

        • framu 4.1.1.1

          i think if you stick this policy, the rma “reforms” and all the noise theyve been making about housing development together, you can see what the game plan is – and its got nothing to do with helping poor people

        • mac1 4.1.1.2

          Yeah, ‘ifs’ are also to be seen as suggestions for improvement. They also indicate a decision to be made by Key as to how much of the proceeds from housing sales will be hijacked to fund other non-housing government spending.

          I agree, VTO, with your puzzlement. I remember very well listening as a young student to John A Lee talk about building houses as a good way to boost the economy. Good for the late Sixties, still good now.

          However, our beloved neo-liberals would say that the private sector should be those doing the building, and not a minimalist state. So, dogma and ideology rule.

      • Murray Rawshark 4.1.2

        “It increases the housing stock if the houses sold remain and are not removed for up market housing.”

        How? Selling a house to a social housing provider doesn’t increase the number of houses available. It stays exactly the same.

        • mac1 4.1.2.1

          It increases the ‘Money’ available for housing stock as the government says it will spend the money (in part) in building new houses. The end result is more housing, surely? My argument is that Key will (mis-)appropriate this money for other government spending, as he has stated.

          • Sacha 4.1.2.1.1

            They have left a lot of wriggle room about how much of the sale proceeds they will spend on housing. The rest will prop up Blinglish’s deficit.

            All I’ve seen them say so far is that HNZ’s new builds will increase from 500 to 1000 per year. Not going to make much of a dent.

            • mac1 4.1.2.1.1.1

              500 extra new builds funded by the sale of up to 8000 houses. How do those numbers stack? Genuine question- no idea of building costs at this scale.

          • Murray Rawshark 4.1.2.1.2

            In part? Like FJK giving part of his salary to charity?

            There are too many things to be worried about in this. Firstly, what is to stop “social housing providers” from selling some of the houses? Who would buy them besides developers? IF the government builds more houses, what’s to say they’ll be for those most in need? We all saw what happened with the proposed affordable housing in Hobsonville. The final numbers were insignificant.

            This plan deserves nothing but contempt. It’s just another way to shovel more money into the pockets of landlords. Hubris is such that they barely try to conceal this any more.

            • mac1 4.1.2.1.2.1

              Oh, I share your concerns, Murray Rawshark. There’s money to be made in this deal, for National’s mates and for English’s treasury spending.

          • Lanthanide 4.1.2.1.3

            “It increases the ‘Money’ available for housing stock as the government says it will spend the money (in part) in building new houses.”

            Most, if not all, of the proceeds will be used to eek out a budget surplus, not build new houses.

            Furthermore, if the money is coming from the Salvation Army, to the government, to allow the government to build houses, then why couldn’t the SA build the houses themselves with that same money they just gave to the government?

            Fundamentally this policy is just playing money-go-rounds and not actually achieving anything.

            In Australia when the state and federal governments divested themselves of social housing, they gave it to private providers free of charge, who were then able to use the equity to take out loans and build new houses (or renovate the ones they received from the government). This policy does have utility, in that the private providers may have more manpower or local knowledge to deal with the houses in a more effective way than the government did – but that small gain is only realised when the houses were provided free-of-charge to the providers. Such a policy won’t be happening in NZ because that doesn’t get the budget out of the red.

            • mac1 4.1.2.1.3.1

              “Most, if not all, of the proceeds will be used to eek out a budget surplus, not build new houses”

              That is on what Key needs to be pinned down. As I say above, Grey Power policy is to oppose purely revenue gathering sales without the money going to new builds. What percentage does Key wish to allocate to the budget surplus?

              At the moment, it’s trust John Key smoke and mirrors.

            • Tracey 4.1.2.1.3.2

              and what services will sallies drop to fund the new housing initiative?

          • framu 4.1.2.1.4

            i think the key bit there is that what the nats are saying is..

            sell house = more house

            not

            sell house + reinvest in more house = more house

            what your saying is correct – but its not the argument being put forward by JK and co

            • Lanthanide 4.1.2.1.4.1

              It’s exactly the same argument they used during the SoE asset sales, and not a single idiot in the media tried to pull him up on it.

              That is, Key said that selling assets to the public raised revenue for the companies so they could use it to grow and expand. Except the government put all of the money into the “future investment fund” instead.

              It’s exactly the sort of thing that someone could say “You’re being tricky Prime Minister, you’re trying to have your cake and eat it to. When will you be upfront with the New Zealand public?”.

    • Hayden 4.2

      How does this increase the housing stock?

      They don’t do “how”. They state something they (or their sponsors) want to do, tell us it’s going to fix something, then we’re expected to believe that the dots will join themselves, somehow.

      • vto 4.2.1

        Yep. To be expected though. Remember that the nats are conservatives and they never pioneer, break new ground, or in fact do much of anything at all…. they like to think of themselves as doers and action men but the reality is that conservatives are conservative.

        Of course society needs conservatives as much as it needs liberals willing to break new ground – I just wish each lot would recognise their true character and stop pretending they are something else.

    • Tracey 4.3

      community providers who cant sell without government permission…

      1. define community provider
      2. is that the only envisioned category of state house purchaser
      3. what criteria proposed for govt approval for on selling.

      funny how onky the opposition get pushed for detail.

  5. Philip Ferguson 5

    Politicians get houses, we get bullshit:
    https://rdln.wordpress.com/2015/01/31/10809/

  6. Sabine 6

    the poorer half is supposed to rent from the richer half the crappy, leaking, mouldy, drafty slums that the richer half will provide. If the poorer half does not have enough money to rent, the state will provide Accommodation Benefits paid directly to the richer Slumlord half as this is more efficient and market friendly than building social housing and renting it directly to the poorer half.

    See….its not that hard to understand.
    As for the Sallies…does really anyone believe that they were to get those houses for cheap? or on government loans? Or both?
    Really?

    look over there, I have a bridge to sell.

  7. PM now says govt have allocated $100m to subsidise community housing providers like the Sallies. http://www.newstalkzb.co.nz/news/national/govt-paying-providers-to-buy-social-housing/

  8. vto 8

    John Key will use taxpayers money to build more casinos but not to build more homes for the less fortunate.

    says it all

    • mac1 8.1

      Very telling comparison, vto.

      So, it could be argued that Key intends to allocate money from the sale of state houses which house the poor to build a casino and then allow that casino to provide more gambling tables and machines to fleece the poor and the addicted?

      I wonder if the Salvation Army, that wonderful organisation which does great work with the poor and the addicted, understands that and is a reason why it is unhappy with the deal that Key is offering.

      It surely taints the deal.

      • vto 8.1.1

        It more than taints things – it is disgusting and no decent human should put up with it (or turn a blind eye).

        Disgusting.

  9. fisiani 9

    The Salvation Army are simply good negotiators and you have fallen for the oldest trick in sales. Feign lack of interest and see if the price falls. Keep feigning interest till the price falls even more, then step in and buy.
    God how gullible can you guys be?

    • One Anonymous Bloke 9.1

      That must be why Trust House is so keen. No, wait, it’s another example of your limitless ignorance, eh.

    • vto 9.2

      Fuck, talk about brainless people on the right. Your brain fart there may well apply to neo-liberal, profit-obsessed, shallow and money hungry people, but you can rest assured this is not how good people like the Sallies go about things.

      Completely neo-liberal
      Completely profit-obsessed
      Completely shallow
      Completely money hungry

      Completely failed. Idiot. You should get out more.

    • framu 9.3

      Once inside a home, he would sniff or lick the occupants for signs of stress or unhappiness.

    • mac1 9.4

      FFS, you ask that question, Fisiani, you of the “Honest John” belief?

      Aaaaaahargh!

    • tc 9.5

      Diversion Alert….look away please this is not an issue say Fisi the neo lib parrot.

      • fisiani 9.5.1

        So when the Salvation Army buys some houses later this I hope you will all step up and apologise for playing the man again. I won’t hold my breath waiting. Fairly obvious you have no idea how the Savation Army have become so wealthy and cash rich.

    • Murray Rawshark 9.6

      “God how gullible can you guys be?”

      About 3% as much as you on my worst day.

  10. Draco T Bastard 10

    Yet this Government refuses to even think about doing something active to address our significant and growing housing crisis.

    There’s a huge amount of profit to be made by the rentiers if demand for housing is kept high.

  11. Maui 11

    This is classic! The sallies were hailed as the answer to the social housing problem by both National and a lot of their supporters. This just shows the Government has barely talked it through with them. diabolical. The tenants in Pomare were kicked out atleast a couple of years ago, shows the gov never entertained working in a partnership at all.

  12. alwyn 12

    Does anyone here know the source of the report referenced in the original post? I would like to see the source of the bit that says, as quoted –

    “The Productivity Commission says new homes priced below the median value of existing homes plunged from 51 per cent in 1989 to 15 per cent in 2011. We virtually stopped building houses for the poorer half of the population.”

    This could very easily be true but totally misleading. After all I think everyone would agree that the cost of a property in Auckland, including the land, is much more than it is anywhere else in New Zealand.
    It is also possible, and probably likely to be the case, that most of the new state houses built between 1990 and 2010 were in Auckland. After all that was where the population growth was.
    The median house value of existing houses however probably represents a property not in Auckland, as there are probably 65% of New Zealand’s houses outside Auckland.
    Hence the statement could easily be true but not the final conclusion which need not logically follow. We may have built houses for those members o the poorer half of the population who were living in Auckland.

    • Lanthanide 12.1

      Unless of course they were using the median for each local market. Slightly more work, of course, but makes a hell of a lot more sense.

      Also completely demolishes your argument.

      • alwyn 12.1.1

        “Also completely demolishes your argument.”

        Yes it would, if they did that, and it would make more sense but did they look at individual markets?
        That is why I would like to find a reference to the report that is quoted. I have seen some things about it but I haven’t found this bit of any report.

        Do you know what they did or, like me, are you just hypothesising?

  13. Chooky 13

    “What is encouraging is that the Salvation Army has also expressed concern for the tenants and thinks it be desirable that they be involved in management of the housing”

    i agree with the Sallies on this….they are taking a moral stand….many of those in State Housing are already those most in need …there just needs to be MORE State Houses

    ….if anyone is to buy State houses the existing tenants (Maori or Pakeha or Polynesian) should be enabled to buy …and the Government must not abdicate from its responsibility for providing State housing .

  14. Heather 14

    I am relieved that the Salvation Army has taken a moral stand on this.

    One can only hope that other community providers adopt the same stance and do not weaken to meet the end result the National Government wants.

    Key is daily becoming more and more out on a limb by himself, people are distancing themselves from him and his punitive policies.

  15. SHG 15

    I for one am glad that we look to an organisation of child rapists for advice on social issues.

    • McFlock 15.1

      To be fair, I reckon about the only organisation that hasn’t had a similar scandal these days might be the Automobile Association. Unless historic cases involving driving instructors or towies come out.

    • That is some sick shit SHG. Way more offensive than whatever Stephanie Rodgers was moaning about this morning. Why don’t you make similar comments about teachers, police, homosexuals?

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