Written By: - Date published: 11:17 am, October 4th, 2014 - 42 comments
Categories: auckland supercity, capitalism, child welfare, cost of living, crime, democratic participation, equality, health, housing, same old national, wages - Tags:
The unaffordable housing crisis in Auckland (and elsewhere) continues, in spite of all the media coverage and government policies claiming to address the issue. The problem is not “tinkering” by increasing the supply of dwellings. that just plays into the agenda of the investors and speculators. It is supported by a culture of greed, which encourages too many people see the buying of property as a way to their individual prosperity.
The catch is that getting wealthier on the backs of the poor, damages the society in which we all live: especially in terms of outcomes for things like health, education, crime, transport systems, etc.
There’s yet another article in today’s NZ Herald about the increasing problems for renters:
Families are being forced into desperate measures – paying more than half their income in rent and even living in cars – as Auckland’s rental housing crisis deepens.
South Auckland social service agencies say they are seeing more families with children living in cars, camping grounds and boarding houses in the past two or three months as private sector rents become unaffordable and state houses have become almost unavailable.
Housing stress is also spreading into middle-income families as the proportion of all renters paying more than 40 per cent of their income in rent has more than doubled in the past decade nationally, from 9.5 per cent to 23 per cent.
Last year 48 per cent of all renters who received an accommodation supplement, or 94,000 households, already paid more than half their income in rent.
The poor health outcomes will impact on all our services, and the combined impact of the failure to supply enough affordable housing and jobs with living wages mean that state funds are used to subsidise landlords and employers who pay low wages.
Most of government (and some opposition party) policies focus on building more houses. But this even if this works in lowering the costs of rentals, it’s a long term solution, while peoples lives continue to be damaged.
Pattrick Smellie made it clear in an NBR article back in May of this year:
There is no housing shortage in Auckland, where prices continue to rise strongly thanks to investor activity, says the chief economist for the New Zealand Institute of Economic Research, Shamubeel Eaqub.
There was pretty good coverage of the housing issues on a Radio NZ Insight programme back in March.
Auckland’s Housing Crisis: the shortage and cost of housing in Auckland remains one of its biggest challenges – 30 March 2014
The Radio New Zealand Insight programme from 30 March 2014 includes comments from developers, bankers, local and central government agencies and Peter Jeffries, CEO, CORT Community Housing (Community of Refuge Trust).
The first part of the programme covers problems related to the alleged shortage of affordable housing for the buying of. It focuses quite a bit on policies related largely to building new dwellings, and government and Auckland Council policies.
The most important bits come after about 21.30 minutes.
The main government and council policies related to providing more affordable rental housing focuses on community housing and charitable organisations. The government and Auckland council want them to be bigger players, without providing them with adequate and stable funding, as explained by Peter Jeffries, chair of Community Housing provider, Network.
A bank economist reckons that rising interest rates will push prices down in the long term, and that building more houses won’t lower prices over short term.
At about 25.40 minutes, the Professor of Property at the University of Auckland business school, Larry Murphy, says the current housing market is complex. The main problem for affordability is that housing is looked on as a way to greater wealth. Murphy argues:
We have created this set of forces, socially, politically and culturally that are very hard to slow down. And so at this stage, I think, most of the policies would be tinkering. It’s probably too harsh a word. But they are trying to modify the speed of growth in house prices. But it’s very difficult. It’s a juggernaut that’s travelling along and there are lots of processes promoting it including population growth, income growth, people trading up in the markets; the whole set of processes. People’s expectations, drive their willingness to take on more debt, etc.
Murphy says that the moves to improve affordability by increasing the supply will be outweighed by more powerful financial and economic forces.
Meanwhile the housing bubble in Auckland remains large, with landlords just itching to raise rents to match some of the over-inflated prices people are paying for properties. There’s been a few very uncritical artistes lately stating that landlords will soon be raising the price of rental accommodation. This NZ Herald article published last Monday is one example.