The housing crisis rumbles on

As the housing crisis in New Zealand rumbles on, with no one seemingly having an idea about how to fix it, various commentators are starting to wade into the subject. Economists, politicians, community groups, bankers, planners are all vying to have their say on what might be causing the crisis. Various reasons have been given for the poor state of the housing supply in New Zealand.

A common one is that the Resource Management Act is a barrier to development. It is usually wielded by National and A.C.T. Party Members of Parliament who do not want to acknowledge other, often more substantial contributing factors. Normally accusations about it are used in conjunction land use zoning that prevents or restricts how sensitive land that might not be altogether appropriate for housing, is imposed. Other accusations stem from a lack of understanding about how Resource Consents work, and in particular the Section 92 request for more information (applied if the application does not supply sufficient information for the Consenting Authority (City/District/Regional Council) to make a determination.

Perhaps more obvious is the lack of skilled tradespeople. This is something that is best solved by having a fully funded and resourced apprenticeship programme, which is something that has become a bit of a political football in recent years. It was stopped for short sighted reasons by Labour, and ignored by National during their time in office. Considering that a house will need carpenters, plumbers, electricians, roofers, glazers and so forth, one should not be very surprised if there are delays in getting it done.

Affordability. If you cannot afford the cost, how is one going to be in the market in the first place. Sure there are loans and mortgages to help those determined to get on the market, but for a lot of people the salient fact of the matter is most houses in New Zealand are quite simply out of the financial reach of ordinary New Zealanders. A 2 bedroom home should not cost more than $300,000-$350,000 yet in many cases often costs $500,000. This is something that seems to have not been picked up by the higher powers that be in Kiwi Build, including the recently demoted Phil Twyford.

Some people say that the market is being driven up by non New Zealanders buying property that they then do not live in, so that they have a bolt hole if their own country (China, United States, etc) develops problems that make them want to leave long term. New Zealand First campaigned against this, vowing that it would only want to see permanent residents and citizens be able to purchase property.

With the exception of the R.M.A. accusations, I think there is a degree of truth in all of the above. However, I think there are also reasons that are being deliberately ignored, which are helping to contribute to the crisis. These need to be addressed because New Zealand has little chance of addressing the yawning gap between the 1-2% and the 99-98% that the vast majority of New Zealanders fall into in terms of measurable wealth. This is why the Capital Gains Tax, and/or any one of the various other measures that have been suggested such as taxing luxury goods.

Another one that seems to be ignored is the use of alternative dwelling types to conventional homes. Prefabricated houses are one such type. Common a few decades ago, prefabricated houses slipped out of sight. With the cost of buying land building brand new being out of reach for most, there is a revival underway. And now, as New Zealand tries to get its head around the housing crisis, they appear as a distant hope for many unless they can raise enough to cover the cost of land and getting the site prepared, with a compliance certificate to show.

Here is hoping that the cabinet reshuffle which demoted Mr Twyford and enabled Dr Megan Woods to take his job will bear more progress than we have currently seen. But how long will it be before New Zealand realises there are alternatives to conventional houses – if they are willing to look outside the square?

2 thoughts on “The housing crisis rumbles on

  1. Hi Robert, this is my very first comment and I am new to all this, but I enjoyed reading your article. You might enjoy my song “ Welcome to paradise “ and I hope it’s ok to give you this link here. Great to know that there are more people out there thinking!
    Not sure if this is a private message to you – I am only starting and have not written a post yet. But I wanted to thank you for this well written post.


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