There is no housing crisis

Written By: - Date published: 8:41 am, November 8th, 2016 - 21 comments
Categories: housing, labour, national, paula bennett, phil twyford, Politics - Tags:


Yesterday the government announced an apparently large new spend, $300 million, to address the housing crisis that does not exist.

The money is to be spent this year and over the next four, so it is more like $60 million a year. And $100 million of it is a loan to Housing Corp, no doubt to stop it running out of cash next February.  In fact the whole announcement feels like the announcement the Government had to make to shore up Housing Corp without having to admit that it stuffed up by taking dividends off Housing Corp at a time of crisis.  And that it threw in some further spending to camouflage Housing Corp’s refinancing.

Given that the loan has to be repaid the actual amount of money per year the Government is spending is more like $40 million.

$71 million is for rental subsidies. It appears that what will happen is the Crown will buy houses then pay the money to social housing providers who will then pay the money to the crown as rent so the provider can then house families in need. Yep, one big money go round where effectively the Government pays itself to rent its own houses. Presumably the money will go back to Housing Corp and so this payment is another part of the Housing Corp refinancing deal.  The amount per year is more like $26 million.

$10 million will be for more public servants. Increasing MSD’s workforce at a time of crisis is something that a Government should not present as part of a strategy to deal with the crisis. The amount per year to address the crisis that does not exist is more like $24 million.

The remaining $102 million will be spent over five years in service funding for emergency housing providers. This will not create one new home. It will be spent on managing the tenancies of those in emergency housing and “work[ing] with households to stabilise their situation, develop a plan to find more sustainable
housing and then support them in the first three months of their new tenancy”.  It is funny that this Government proudly announces the provision of a service that it should provide as a matter of course.

So sleigh of hand, accounting tricks and a multi year spend suggests that the Government is actually doing something about the housing crisis that according to the Government does not exist.

Phil Twyford has been scathing about the announcement:

Today’s announcements won’t solve National’s housing crisis. Every week, there’s a new announcement from National and all they show is how bad they’ve let things get.

National has announced funding for an extra 1,400 emergency housing places, exactly what Labour announced back in July, but it needs to adopt Labour’s full plan. This announcement is an ambulance at the bottom of the cliff but the real solution is to stop pushing people off the cliff in the first place.

The heart of the housing crisis is a lack of affordable housing and state houses. There’s no substitute for building houses. That’s why Labour will build 100,000 affordable homes for first homebuyers to purchase as well as thousands more state houses, and lock speculators out of the market.

The Cross Party Inquiry on Homelessness found an extra 15-25,000 state houses are needed so 41,000 homeless Kiwis can all have proper housing. The massive increase in homelessness is a direct result of National’s negligent mismanagement of the housing crisis, including its sell-off of state houses.

The $100m loan to Housing New Zealand is an admission that National has been bleeding state housing dry. Over half a billion dollars in ‘profits’ have been extracted from Housing New Zealand by National, leaving state houses in a dire state and unable to meet demand. This is an admission of National’s role in causing the housing crisis.”

The announcement feels like the least that the Government could get away with and most of the money is intended so that Housing Corp does not run out of money.  And the numbers involved are nowhere near what is required to deal with the existing situation let alone deal with potential problems that large immigration numbers are continuing to add to.  And the emergency housing plan to help 1,400 people in crisis is exactly what Labour proposed in July, although Labour announced a number of other policies such as the construction of 100,000 affordable homes.  Another labour lite announcement.

Time for the Government to admit the solution is to build more houses.  Quickly.

21 comments on “There is no housing crisis”

  1. Nick 1

    Labour should use the national canoe marketing campaign against them… and cartoon the natz waka sinking,.springing policy holes everywhere……. And being weighed down by cow shit and corrupt $$

    • Michelle 1.1

      Yeah I suggested this last year Nick we should depict the gnats waka sinking as it is sinking ( with their stolen song ) we can also show then paddling in other directions as they are

      • roy cartland 1.1.1

        Drinking their Moet and peeing into the water that flows past the rest of us.

        Too much? Or not enough??

  2. pat 2

    and yet the headline continues to be “300 million boost to emergency housing”….what happened to journalism?

    Fool me once, shame on you..fool me twice,shame on me….fool me ad infinitum , hang up the keyboard and become a barista

  3. Draco T Bastard 3

    Today’s announcements won’t solve National’s housing crisis.

    National doesn’t have a housing crisis. They’re quite happy that houses prices are rising as it means that they and their voters feel richer without actually having to work for it.

    It also won’t address the housing crisis that the nation has as it’s not designed to do that. What it’s designed to do is to give some of National’s rich mates some more taxpayers money.

    The heart of the housing crisis is a lack of affordable housing and state houses.

    That’s not the heart of the housing crisis. The heart of the housing crisis is capitalism and ‘free-trade’. It’s the selling of houses to offshore owners and the exporting of resources such as raw timber. Timber that could be used to build houses.

    Comes back to that old cliche: You can’t have your cake and eat it to.

    And yet that is exactly what our socio-economic system pretends that we can do.

    We need something to build the houses with but we’re selling all the necessary resources as fast as we can to make a few people richer and leaving the rest of us poverty stricken.

    • ropata 3.1


      The heart of the housing crisis is capitalism and ‘free-trade’.

      Good point, the market is broken, it has been corrupted by oceans of dirty foreign cash and greedy rentier behaviour and powerful market players screwing the scrum. Speculation, land banking, and slipshod development abounds. It’s the Wild West.

      • roy cartland 3.1.1

        Why is it so hard to prohibit non-residents from owning houses? And heavily taxing those that are for profit not for one’s housing? How could this possibly be detrimental to NZ? (Genuine q, not rhetorical.)

        • tc

          Its not hard at all, plenty of laws around the globe exist that do just that but its not what nationals backers want.

          the longer term impact on NZ they dont give a F about.

        • Draco T Bastard

          Why is it so hard to prohibit non-residents from owning houses?

          It’s not. In fact, we used to along with every other country doing so (other countries still do). The problem is that National and Labour got ideology in the form of neo-liberalism which says that everything must be for sale.

          They never understood the practical reality of that position though. In that it makes it too expensive for locals to live there any more and that it tears up our society.

          Then there’s the fact that free-trade is based upon willing buyer, willing seller and that NZers have never wanted to sell. That’s been done against our wishes and is thus not free-trade.

        • greg

          because national have allowed a massive housing bubble to blow up and there terrified its going to pop house prices collaterals most of the house hold debt which is huge .homes have been used as ATM machines holiday cars rich living all funded on the back of the roof over our heads . any change in policy for these massively over leveraged consumers and the house of cards comes down,

  4. Keith 4

    This must be what Stephen Joyce meant by pork barrel politics. The Nats are taking a hit from this issue and I will take a very educated guess they’ve polled and focus grouped and this is what they’ve come up with, to buy off the voters, to give the impression they care.

    Think about it, $100 million to Housing NZ to tide them over as they’re broke, but it’s a loan, then $50 mill per year for the rest of the country to tackle homelessness and more so, hopelessness. That will buy 50 odd homes in Auckland, nowhere near enough to cover the deficit created by Nationals state house sell off, nor will it counter their anti social assistance policies.

    Now being National there will be many strings attached to get near this funding and it will likely end up not all this grand sum will be used.

    To me it’s simply a pool of money for National to chuck the noisiest whingers into a motel to shut them up just long enough to get them off John Campbell’s show.

    It’s just another mirage.

  5. JustMe 5

    What really puzzles me about this annoucement by Paula Bennett is the $100million ‘loan’ to HNZ. There has been no mention of what rate of interest HNZ will be charged for this 10 year loan. Why?
    Is there any possibility that with each new HNZ home using this money that it will be quickly sold off to some private property investor who just so happens to be good mates with someone in the National Party or is willing to give a financial kickback to the National Party in return for more ‘deals’?
    To date Bennett has presented a litany of failed policies and plans. She failed in her “Get out of Auckland for $5000” policy/incentive. If Bennett was in the private sector she would be well out of a job by now.
    And now she is trying to give us the impression she will cure the sickness that is throughout the Key government i.e a government of incompetence and deliberate neglect. As well as arrogance, denial and blame games. The sickness of a government that has been in too long and the cracks are starting to show.
    We will again see more money pouring out of the NZ economy and into the pockets of private investors with(like I said earlier)close links to the National Party of NZ.
    Will Key and co offer to those wanting to sell up the price of the property on QV value or whatever the property/properties could be going for? for example a QV on say an average Auckland property has been about $750k. On the market it could go in the region of over a $million. Will Key and co diddle ordinary home owners wanting to sell up by offering them only $750k? With the policies to date I am sure the Key government would diddle anyone they can just to make a quick buck into their own personal bank accounts.

    • tc 5.1

      Loans are one of many devices they use to put lipstick on the pig, house of blinglish speciality as they load up the entity with debt and they dont call it expenditure centrally.

      Twford needs to keep the attack lines simple and repeat over and over as soundbites.

    • Draco T Bastard 5.2

      We will again see more money pouring out of the NZ economy and into the pockets of private investors with(like I said earlier)close links to the National Party of NZ.

      Of course we will – that’s what the National Party exists for.

  6. Richard Rawshark 6

    Most big business/corps do that, split up the company to reduce liability etc.

    A government?

    Why would you make life so difficult if you didn’t need to.

    • JustMe 6.1

      I don’t know who they, the Key government, are trying to impress.
      Perhaps they are wanting to impress overseas property investors. And perhaps it will again be the strategy of this government of “I scratch your back and you scratch mine’.
      Also we are ONLY 11 short months out from the next election. There will be the usual overload of pre-election promises by this government which will be broken once the votes are counted and if Key & co get back in again.
      Many people will think this latest announcement by Bennett is absolutely brilliant and will be totally fooled by it. But it does look like NZers are slowly waking up from a long sleep and hopefully they will be out in huge numbers voting at next years’ election.
      The day of the Apathetic New Zealander at elections whether it’s local or central needs to end NOW.
      If people don’t get off their lazy rear-ends and vote at next years election then don’t blame those who voted for the mess the self-seving Key government has gotten NZ and NZers into.

      • Richard Rawshark 6.1.1

        If the NZ public remains apathetic to this government after all they have done, I don’t think i’d want to be a part of that kind of society.

  7. mary_a 7

    There’s no housing crisis, according to Key, Bennett, English and Joyce. Yet Government to buy more motels, to provide accommodation for the homeless (short term that is)!

    Money which could be diverted into renovating and making state houses habitable instead, providing homes for genuinely needy Kiwi families.

  8. Nic the NZer 8

    “Yep, one big money go round where effectively the Government pays itself to rent its own houses.”

    Or as i have pointed out repeatedly the government can issue as much spending as it wants at any time. For some reason the government self funding to support its real housing stock is perceived as a bad thing? Don’t we actually want more state subsidized housing and more new housing (again state subsidized). Thats not an outcome resulting from obsessing about accounting identities and how much a govt department presently owes the government running it.

  9. katipo 9

    Wonder what the government think would constitute a ‘housing crisis’?

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