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?

Climate change “Rule Book” only limited use

Over the last week the world has been made to come to terms with the fact that despite the 24th Convention of Parties to the United Nations Framework Convention on Climate Change, there exist some fundamental problems. There also exists, according to the United Nations and reinforced by an address by renown biologist Sir David Attenborough, a diminishing window of time to stop run away climate change.

The purpose of COP24 was to create a rule book that the world would agree to conduct its response to climate change by. And not surprisingly, with 200+ nations sending delegations, there was always going to be some disagreements.

New Zealand is part of what is considered a significant force including Canada, and the E.U. bloc who are actively pushing for a response to climate change, citing the threat it poses to humanity and the potential loss of island nations in the Pacific.

There are some powerful forces aligned against the “Rule Book” produced at the recent climate summit in Katowice, in Poland. Specifically Russia, the United States and Saudi Arabia have come out against it. None of these nations appear to be co-operating in any way to jeopardize the “Rule Book” so much as they appear to be working for their own interests, though in the background I would not be surprised if Saudi Arabian official and their American counter parts are not having some informal conversations.

I would not be surprised if Australia is also against the “Rule Book”. Whilst it did not appear to be specifically against it, domestically the Liberal Party is for the most part a climate change denial party with emphasis on trying to get the troubled Adani coal mine operational. It agrees with the approach of United States President Donald Trump who denies climate change. And Brazil, which in the past has been an active participant, under its new leader the conservative Jair Bolsonaro who believes that economics are more important than environmental sustainability, also appears to be following Mr Trump.

Coming up with rule book type plans is all well and good and represents significant co-operation between nations on an increasingly problematic subject. The lack of long term vision displayed by New Zealand in terms of how it will tackle this major issue should be of significant concern for everyone. Announcing an oil and gas ban without giving thought to how our energy needs will continue to be met is not something that has gone down well in Taranaki where most oil and gas exploration takes place.

Not everything needs a select committee to determine a course of action though. Nor does it need international meetings halfway around the world to determine rules or guidelines when common knowledge could set them immediately. Simple things such introducing a nation wide aluminium recycling scheme with a payment per kilogram of aluminium dropped off at an approved site can potentially assist straight away. Aluminium is very energy intensive to make because the smelter powers use a lot of electricity. It is also very malleable and the recycling process on needs a fraction of the energy.

Making good on requiring landlords to properly insulate houses will also go someway towards reducing energy needs in individual households. Tens of thousands of properties nationwide are still uninsulated. Some landlords are stalling because they are not prepared to cough up the cost of proper insulation. Some simply do not care and others will not necessarily understand the legal requirements of the legislation. But with six months to go before it becomes mandatory, they are running out of time.

Kiwi Build needs to get a grip

During the previous Government housing was a major headache for a lot of people. Market oriented policies, increased international pressure and poor domestic policy making all combined to overheat something that was supposed to keep prices competitive. And at the end of the day, the working man was the one who paid the price. But a year after National exited office, there still seem to be unrealistic expectations of what New Zealanders can afford – or are prepared to pay.

Kiwi Build need to get realistic about the ability of people to afford their offerings. The simple fact of the matter is that our incomes, combined with their unrealistic prices and the high demand which means competition to get into one will be strong.

Some of the houses on offer are going for more than N.Z.$650,000 which is simply too much. It might be fine if one is on a high income, but what about the many who do not earn six digit figure incomes even before tax? What about those who cannot afford to put down a deposit, which is what is often needed in order to buy a house?

I earn $17.76/hr before tax. After income tax, but before further deductions for Kiwi Saver and ACC and so on are made I have $14.65/hr. What hits my bank is therefore not quite what I start of with before tax. Add in board and $125 per week for long term savings and what I have is significantly less than the $36,900 before I started divvying and subtracting. That says nothing about all the other weekly costs most people would have to pay.

Yes, Kiwi Build is meant to target New Zealanders wanting to get on to the property ladder and own their first house. But right now the cost to many New Zealanders is simply out of their current reach, but likely future reach even with higher incomes or sharing the costs with a spouse.

Minister in charge Phil Twyford is making a botch of the issue. At no point has Mr Twyford seemed like he is in full control of this very important portfolio, with a range of concerns:

  1. Lack of ambition – an arguable one, but it was raised by economist Shamubeel Eaqub
  2. An apparent lack of effort to engage the designers of microhousing, which has minimal floor space and could be an option for those not wanting a full house, but one that is suitable for just being a place to eat and sleep
  3. How to counter urban sprawl and get councils to promote apartment living

In fairness to him each house has other costs associated with it such as getting resource consents, paying the tradesmen to put it up and including the necessary services such as electricity, running water, sewerage and a driveway of some sort. Paying for these as well as allowing for competing market demands means that even if Mr Twyford is able to get the housing portfolio down pat his hands maybe somewhat tied by forces out of his control.

But that does not change the fact that as Minister in charge Mr Twyford has to take ownership of the problems posed and do his best to fix them.

Social housing bureaucrats need a reality check

Recently the criteria to buy a house on the Kiwi-Build scheme was announced. Whilst a welcome step forward in making housing more affordable for New Zealanders, the data on which it was planned and the plans derived from it pose some serious questions about the realism of the whole scheme.

A good example is the suggestion that the upper income level of a couple seeking a Kiwi-Build home may be as high as $180,000. This is quite absurd when one considers the current pay most professionals take home – the graduate incomes for a few professions are listed below:

  • A newly graduated police officer: $45,000
  • A newly graduated nurse: $46,000
  • Graduate resource management planner: $45,000
  • Graduate primary school teacher: $43,000 / Graduate high school teacher: $45,000
  • Graduate plumber: $39,000
  • Graduate carpenter: $40,000
  • Graduate electrician: $46,000

And let us be realistic here. Let’s say that a couple who have been in their respective professions – say an electrician and a high school teacher – for 5 years and are on $50,000 and $47,000 respectively. After paying 21% income tax and %17.5 they have $39,500 and $37,530. They live together and pay $250/per week in rent each or $13,000 in rent a piece.

After adding in $240 for groceries, power, phone and internet, running a middle age Toyota Corolla and a Ford utility that would be another $200 a week each.

They want a house, and are looking for something in the vicinity of $350,000-$400,000. If they put away $300 per week each to save for that house it will take them nearly 12 years to reach the bottom of that price range. Kiwi-Build houses for the most part seem to be priced at $500,000+.

Whoever came up with this inane idea that people can somehow afford this needs a reality check. After tax this couple are on a combined total of $77,030. After weekly expenses that drops to around $56,000. This couple have no kids to worry about at this stage. But in the real world many would have one or two children to worry about by the time they reach their 30’s, which tightens the wallet considerably.

The scheme has several failings. It fails to lock out those who have lived overseas for a long period of time and will have financial assets that they can draw upon to buy a house under the scheme. It fails to acknowledge an even more basic fact: Most New Zealanders simply do not earn that much and would struggle to make the starting gate on even a house at the bottom end of the spectrum.

A person on minimum wage in something like a supermarket job would be on $16.50 per hour and have to pay 17.5% tax. I will assume for the sake of this argument that they pay 3% into their Kiwi Saver, which would leave them with about $13.11/hr after tax. That is about $681/p.w. Subtract $250/p.w. for rent and another $180/p.w. for all other expenses, that leaves $250/p.w. At best they might put away about $100-120 per week or about $6,000 per year. All of this assumes that they are single and have no dependents (kids/sick or elderly relatives).