Foreign speculators to be banned from buying N.Z. housing

In one of the first moves of the new Government, today Prime Minister Jacinda Ardern announced at her first Cabinet meeting press conference that foreign speculators would be banned from buying houses in New Zealand from early 2018. The announcement makes good on a promise made during the election campaign to restrict who could buy New Zealand housing, in an effort to cool the market.

This is a promise that has the support of New Zealand First, whose policy platform has long advocated blocking anyone who is not a permanent resident or citizen from buying N.Z. housing.

But the announcement, not surprisingly, has not gone down well with National, whose Finance Spokesperson Steven Joyce said that the announcement itself does not suggest a ban. Mr Joyce questioned whether houses classified as sensitive under the Overseas Investment Act are banned or not. Mr Joyce also questioned whether it would send the wrong signals to overseas investors about investing in New Zealand.

Mr Joyce misses the point. This is as much about social well being and a basic human right, but also the common responsibility of a Government to put the needs of it country and its people first, as it is about the markets, trade or economics in general. This is about addressing the fact that New Zealanders were being priced out of the market by foreign buyers with more spending power.

Ms Ardern indicated that she expects the legislation to be introduced to Parliament before Christmas, to be passed in 2018. She denied it would impact on the New Zealand-South Korea trade agreement or that it would affect the Trans Pacific Partnership Agreement. The latter of which is contentious with Labour allies, New Zealand First and the Greens, both of whom wish to see it abolished completely or NEw Zealand withdrawn.

I welcome this announcement. It is a major step in the right direction for New Zealand housing and the right of New Zealanders to own houses. It is also hopefully the start of a plan to address the disgusting fact that New Zealand has the highest rate of homelessness in the O.E.C.D. National had nine years to address this and other issues brought about by an out of control housing market, and failed to.


The case for changes in Residential Tenancy Act

For a time now I have been of the conclusion that it is time to review tenancy laws in New Zealand with regards to rental properties, the landlord and the occupants. My concerns stem from a combination of reports of irresponsible landlords letting their properties deteriorate whilst still charging full rent, and cases where tenancy disputes have resulted in the wrong decisions.

Barfoot and Thompson have listed what they interpret under the Residential Tenancies Act, to be the obligations of the landlord. There are multiple changes that I believe need to be made:

  • The rental property owner must live in New Zealand
  • Must notify occupants of properties if intending to be away for more than 48 hours and up to 21 days
  • Formal standards need to be set for detection of methamphetamine labs or other such drug manufacture that makes a property unsuitable for use
  • In times of emergency – earthquake, fire, medical and so forth – where circumstance do not permit normal rules of entry, the landlord and affected occupants must make reasonable effort to establish contact by phone
  • Landlords must not make undue increase in rents in times of emergency and any change needs to be explained to occupants – “because I felt like it” shall not be sufficient

Occupants have obligations as well. I believe that in the best interests of transparency, in addition to those obligations that are listed on the Government tenancy services website, occupants should also:

  • Notify the landlord of an early end to occupancy
  • Notify the landlord of visitors staying more than three nights

The house might be an old bungalow, or it could be an old granny flat that was built to be specifically able to cater for a person living on their own with little or no need for a yard. The problems could range from structural deficiencies to a general lack of maintenance. It might have mould problems from excessive condensation or have unsafe wiring. It might have just one of these problems or the entire range.

What I propose is a nation wide compulsory rental property warrant of fitness. The warrant of fitness would be implemented by city councils in large urban areas and district councils in smaller towns. The warrant of fitness would cover:

  • Sanitation
  • Moisture
  • Hygiene
  • Fire and structural safety

It would be renewed every year and require registration by the landlord. Properties deemed unfit to be used as rental properties would have to display in a prominent place such as a window near the door, or on the door itself a sticker indicating its status.

Consistently non-compliant rental property owners would be struck off the register of rental properties if their property fails to meet the criteria set on, say, three or more consecutive occasions.

Like many regulations, this is to address the fact that there is a small percentage of people who refuse steadfastly employ common decency and ensure that rental properties they own are of a standard that is fit for habitation. They are of the opinion that the law is not applicable to them. These are the ones who should not be in the rental property industry. There is also a percentage of rental property owners who comply just so that they are not caught operating deficient properties, but whose general attitude is to do the bare minimum.


Christchurch social housing and Manus/Nauru Island Detention Centres

Manus Island and Nauru Island. Two equatorial islands. One is a part of Papua New Guinea (Manus Island) and the other an island nation 21km². Each with a Detention Centre on them. Two detention centres that are home to a mix of refugees fleeing some of the worlds worst conflicts, asylum seekers being hounded by their Government and criminal overflow from Australia’s prisons.

The environment is tropical, with high heat and humidity, tropical downpours, snakes. Because of the sandy soils of the island, there is little holding capacity in the soil for groundwater, which means when drought breaks out there is severe and sometimes crippling water shortages.

The mix of detainees who inhabit the facilities on top of these soils should never have been here in the first place. They occupy immigration facilities set up by Australian authorities, determined that no asylum seeker, refugee or other person who did not arrive through official processes should ever reach the Australian mainland.

Broadspectrum are a subsidiary of Spanish company Ferrovial. They run the Manus and Nauru Island facilities. According to the Broadspectrum website, the company has the responsibility for providing social welfare services to Manus Island Detention Centre inmates.

Broadspectrum are therefore implicated in the operation of two Detention Centres where grave and sustained human rights abuses against vulnerable inmates have gone on under their watch. Indeed the establishment and operation of the Detention Centres themselves are significant abuses, which include physical and sexual abuse of inmates. Some of the allegations are severe enough to have progressed to formal allegations.

Now, the same Broadspectrum wants to hold contracts for the running of social housing in Christchurch. 2,500 houses are thought be for sale, despite Housing Minister, Amy Adams saying that they cannot be sold off further.

It is wholly inappropriate for a company linked to such grave abuses as those that are going on on Nauru and Manus Islands to be in any way involved in social housing. It is still more so that they seek to hold contracts for housing in a city which is recovering from significant trauma. Its whose most needy residents have enough socio-economic related stress in their lives, never mind whether or not their new housing provider can be trusted.

Broadspectrum also holds contracts with Auckland Transport, and further contracts with Transpower that are worth hundreds of millions of dollars. It subcontracts security work out to the Wilson Group, which in New Zealand includes First Security and Wilson Parking. Wilson Security, which is part of the Wilson Group are complicit in the abuses that have occurred at these two detention centres, by virtue of some of their staff knowing what was going on and failing to act to stop it.

Corporate dollars should not come ahead of human rights at any point in time. Broadspectrum made 45% of its total revenue in 2016 from Manus and Nauru Island Detention Centres, which totaled A.U.$1.646 billion. At the same time there were reports from the social welfare workers at both facilities that some of their clients were talking about suicide and included children.

Based on this would you trust Broadspectrum with social housing in New Zealand?

New Zealand housing crisis due to deliberate ignorance

We perceive ourselves as intelligent and in many respects we are, but there is a degree of ignorance and – perhaps – arrogance that goes with being a human being as well.

In some respects New Zealanders are quite aware of how lucky this country is to be free of major conflict, still have a relatively pristine environment and good performance in most social indicators. And yet, we are quite far behind – knowingly so in some respects – when it comes how we house ourselves, manage housing for the vulnerable, sick and disadvantaged and hindering our socio-economic performance as a result.

There is something about the housing crisis so fundamental that we cannot help notice, yet seem to be quite content in ignoring:

Anyone can buy a property in New Zealand. You do not have to be a permanent resident or citizen to do so, as is the case in many countries. 

In the United States a non American can buy property, but there are strings attached. These are normally involve houses being registered with a residents association or similar and ownership of a property registered such an organization is understood to be an acknowledgement that the owner is expected to comply with their rules.

In China one cannot own land, but rather gain rights to use that land. A person can purchase a house in a designated area after a year or more of studying or working in China.

In Israel the land owned by the Government, Jewish National Fund or the Israeli Land Authority can generally only be purchased by Israeli citizens or Jews. This comprises about 93% of all Israeli land. The 7% that is not owned by one of these bodies is privately owned and in great demand as there are few restrictions.

I have said before and will say again that New Zealand should require people to become permanent residents at least before they can purchase property in this country. In past articles I have shown how New Zealand can take steps to improve the housing crisis here and rather than write it all out again, here it is again.

New Zealand needs a revolution in land use planning

With all of the talk about housing going on, I find it somewhat surprising that no one has attempted to look at the idea of apartment living more closely. Given the lack of flat land in some urban areas and issues that go with reclaimed land, the current trend towards big single story houses and needless landscaping, and the development of infrastructure with more of this wastage in mind, strikes me as absurd.

I personally find the word revolution too emotionally and politically charged to use as a general rule. However there is coming a time in land use planning where it might be the most suitable way of describing the growing need to change how we approach land use planning.

The quarter acre dream is dead. If not it should be. The expansive suburbia ideals of the 1950’s and 1960’s need to be exited from planning. With our limited space, and geographical challenges such as the narrow isthmus in Auckland or the long corridor zones of Wellington, it is simply not realistic to continue to pursue. In its place we need to be prepared to go vertical with residential complexes, have communal vegetable patches in order to teach future generations about self sufficiency.

Planning law needs to become substantially more accommodating to apartment complexes. Too often politicians favour loosening up land zoning changes, such as changing industrial zoning to residential when it needs a substantial clean up first or zoning an area at high risk from flooding to something that permits intensive development. The current thinking  In doing so, the theorem around public transport will hopefully change so that cars have a less of a role in private transport. The idea that if you build where ever the roading network will simply follow suit and everyone can drive themselves, needs to go. Smart cities integrate with bus networks, and – where possible – railway networks.

Is the urban area a rough blob shape with a clearly defined centre? If so, a ring and radial network of roads and railways may work best. It looks like a bike wheel with the radial routes being the spokes, and the ring routes being the rim and so forth. In New Zealand the best example would have been pre-earthquake Christchurch. Globally Tokyo and Moscow provide good examples of such planning theory. This theory worked well prior to the earthquakes of 2010-11, where Christchurch’s bus network looked much like the model described. It might still work in the future if certainty about the reconstruction of the city centre can be obtained.

In the case of Auckland, urban sprawl and a growing motorway network with no real vision other than build more motorways is becoming an increasing problem. I was quite shocked in 1998 to see hectares of land disappearing under new commercial development displacing farms or fruit or vegetable growing businesses. The scale of the development, and the lack of regard that seemed to be given towards issues such as storm water run off, infrastructure and so forth.

I do not know how or when this revolution will start or what form it should take, but it plain to me that the status quo is not working.