Making housing affordable for New Zealanders


In January 2019 it emerged that New Zealand houses were some of the least affordable in property price:income ratios. Auckland was the worst, sitting at 9:1, whilst Christchurch was 5.4:1. In other words all of ones after-tax income for nine straight years would be necessary to buy a property on a given day, never mind the fact that in those nine years, the value has most probably increased; that you have day to day living expenses.

In 2002, in Twizel in the Mackenzie Basin of the South Island, a house and the land it sits on would set you back N.Z$90,000. Now the average price in the Mackenzie District is about $543,000, pushed along by the development of new subdivisions around Twizel and the terrace overlooking Lake Ruataniwha.

For me to buy a house now, I would have had to not spent a single cent of my after-tax income since the start of 2013, and even then it would not buy me very much. Maybe 1/3 of that house in Twizel, which would still be another 12 years away from owning – in other words not able to call mine until 2032.

I propose a range of measures that I believe would help to reduce the pressure on the New Zealand housing market.

  1. Reduce migration to 25,000 per annum – in 2018 more than 97,000 people moved to New Zealand, a rate that that cannot be adequately planned for by councils, social service providers or central government
  2. Give local councils the power to acquire properties that are abandoned and whose landlord is not living in New Zealand, and have them sold at their most recent valuation – in Christchurch for example this would enable the acquisition of the Addington sale yards
  3. Introduce a cap on the number of properties an individual can own, so that the market cannot be dominated by a few wealthy individuals or consortium’s
  4. End land banking
  5. Support tiny housing for those who want small houses with minimal floor area – not everyone wants to live in an average house and some tiny homes are quite stylish

However, I do not support the deregulatory approach that would be most likely adopted by the National Party. Every time this comes up, the methods are always the same:

  • Get rid of or substantially downgrade the Resource Management Act – no argument that the Act is in need of reform, but that is not surprising when the Act doubles in length
  • Remove the urban boundary limits, especially around Auckland that open up land to endless urban sprawl – are New Zealanders really that averse to living in apartments or in downsized properties
  • Loosen controls on speculation and quick sales

Housing in New Zealand is sort of our social achilles heal. But it does not need to be that way and the faster New Zealand addresses housing, the healthier our society will become.

Kiwi Build facade still there: No building behind it


Those living in Christchurch could be forgiven for looking at the gutted Kiwi Build programme and thinking that it reminds them of certain derelict facades left behind in the post-earthquake central business district. Battered, clearly having seen better days and with literally nothing of substance behind it, Kiwi Build’s future was announced yesterday after months and months in the repair shop. So what will become of the scheme that was going to promise 10,000 houses a year or about 100,000 all up?

In a press conference that was perhaps fitting for its size given the time, money and resources invested in Kiwi Build by the Government, Minister in charge Megan Woods was keen to make sure New Zealanders know that Kiwi Build still exists. She acknowledged the problems with the promises made and drastically marked down the number of houses expected – an interim target of 1,000 as opposed to the 100,000 that had been promised when the then Housing spokesperson Phil Twyford had basically plucked the number from thin air in 2017.

Kiwi Build was never really going to happen. The number promised was unrealistic and would have tied up our building sector in unaffordable delays to major projects. Phil Twyford should have understood this – and probably did – but instead of quietly admitting Kiwi Build was unrealistic, he let it drag out for months, showed his incompetence and finally lost the Housing portfolio. Dr Woods understood Kiwi Build was not realistic, but she was new to the portfolio and needed time to get up to speed on it, as well as figure out what to do with the facade of a grand idea that was attached to nothing.

Rather than set targets, Dr Woods could be looking at why councils have unused housing that could be made available. In Christchurch, rather than build a wad of new houses, how about appropriating the ones that were uplifted and transported to Yaldhurst from the eastern suburbs.

I want all New Zealanders to have warm healthy dry accommodation. Rather than a straight jacket one size fits all mentality, we should be looking at a diverse housing mix, including single bedroom flats as well as apartment options. Not all of us need a 3 bedroom stand alone house sitting on 1/3 acre such as my parents property in Bryndwr, Christchurch. And rather than promoting urban sprawl which consumes good arable land that is best left for agriculture and so forth, apartment blocks 3 or 4 stories high, such as that which a friend in Sweden lives.

What Kiwi Build eventually gets remembered as, we do not yet know, but we do know that the facade of it is not going to have any respectable structure behind it for sometime yet. Just like certain facades in Christchurch.

 

 

 

Ihumatao settling down?


After an occupation that nearly boiled over in July on land owned by Fletchers, near Auckland International Airport we now have what might be a peaceful solution at hand.

New Zealand owes a degree of thanks to Tainui for their work with Fletchers to bring this to what will hopefully be the last step in a peaceful conclusion in the Ihumatao stand off. The settlement and the nature in which it has been reached is a far cry from the eviction of protesters from Bastion Point in 1975. In that event protesters were dragged by the hair in front of the media and police had the assistance of the New Zealand Army in removing them.

Protest leader Pania Newton was effectively sidelined in the negotiations, which focused on how to move the housing project planned forward. Ms Newton might be aggrieved, but she was neither the seller, nor the buyer. She was merely a protest leader who decided that there had somehow been an injustice committed against Ihumatao when in actual fact Fletcher had purchased the land legitimately, with the blessing of the kaumatua.The land had in fact been owned by Fletchers for several years and in that time until it was signalled that the land might be built on, no one had raised any points of contention.

The fears that this would be another Bastion Point eviction, whilst not impossible in the tension-filled days in mid-July, were I think fairly remote. The Police would have realized that it would do their reputation no favours to be seen forcibly removing protesters. They might have also realised that organizations like Amnesty International would be watching with their own observers on the ground.

Since the 1970’s Iwi, who were probably on the fringe for reasons not of their making, have become much more main steam – 6 of the 7 main ones have reached agreements with the Crown. Communications between tribal seniors and authorities would have improved in that time, perhaps helped along the way by a couple of stand off’s such as at Moutoa Gardens in Whanganui in 1995, where Police learnt about the art of the stand off and that it is possible for these to end peacefully on their own accord.

Hopefully this means that Fletchers can now move full steam ahead and build some seriously overdue housing to help offset the ongoing housing crisis in New Zealand. I expect that of the several hundred acres purchased by Fletchers, the most sensitive parts where archaeological and geologically significant features are present, will be bought back by Tainui.

Prime Minister Jacinda Ardern should now visit Ihumatao and acknowledge what happened there.

 

Ihumatao occupation: A skate on thin ice


Ihumatao. An area near Mangere with a rich volcanic history as part of the Auckland volcanic field and overlain with an equally rich human history, bearing evidence of both Maori inhabitation as well as early European inhabitation.

As New Zealand struggles with its shortage of housing stock Ihumatao has become a flash point. Protesters are wanting to protect the land and Fletchers Construction who own it and want to commence construction of a subdivision, are reaching what will probably be the climax of a three year occupation. Police have been asked to clear the occupied land, but in doing so have attracted the attention of activists, who have further delayed the ending of the occupation.

The older activists might remember back to a time at Bastion Point where Police and the New Zealand Army were instructed to clear land of occupiers following an occupation that lasted 507 days. The occupation was the climax in a long running saga of grievances, questionable occupations and confiscations by the Crown that dated back to the 1800’s. It was finally handed back to Ngati Whatua in the 1980’s with compensation for the past wrongs committed as part of the Treaty of Waitangi settlements process.

Ihumatao has significant archaeological and geological importance in telling the story of the Auckland volcanic field and the inhabitation of the land by Maori prior to European settlement. It features Maori stone gardens, sections of original forest and land whose use by Maori and Europeans for farming helps to determine the chronology of human arrival. Ihumatao was farmed privately for 150 years before being sold to Fletchers for the development of the subdivision that has caused the current stand off to occur.

Fletchers say that they have spent considerable time trying to talk to Save Our Unique Landscape (SOUL)about reaching some sort of agreement over use of the land. SOUL have occupied it since 2016 in order to stop the development of the 480 house subdivision. It is noted that Iwi have been involved with Fletchers in planning the development, which suggests to me a degree of understanding has been reached between them. How much of this protest then is actually driven by Maoridom as opposed to activists?

Thus far the Police have acted with restraint. The spokesperson for the Police at the protest has said that on the whole protesters have been very good and only a very small number have been problematic. Small factions of activists however have tried more radical, disruptive action to which the Police can only reasonably respond to by arresting for moving on those involved. Such actions have included blocking part of a motorway, and chaining themselves to vehicles. Such actions are not going to help the overall protest or the achievement of the bigger goal of bringing this to a peaceful resolution.

Some people have incorrectly considered the presence of Amnesty International staff at the protest to be an indicator of Amnesty support for the protest. That is not the case. Amnesty staff are there in a neutral capacity to ensure that due process between Police and protesters is followed by both.

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?