Build Now - Save Later

Little Edens: These new houses bear testimony to the success of the Waimahia Inlet Special Housing Area in Weymouth, Auckland. At between $350,000 and $540,000 each, however, these houses are still far beyond the resources of those in the most urgent need of accommodation. Houses for the poorest New Zealanders are still in critically short supply. Tackling homelessness now will reap significant social benefits in the years to come.

 

WHY IS THE GOVERNMENT so reluctant to get its hands on the housing crisis? Reviewing its performance over the past seven years, it is clear that John Key is prepared to do just about anything to reduce homelessness – except build the houses that people so desperately need.

 

In Auckland, where the crisis is most acute, Dr Nick Smith keeps announcing the creation of Special Housing Areas (SHAs) to streamline the building consent process. Nine more of these were promulgated by the Minister for Building and Housing on Monday, bringing the tally to 106 SHAs – space for upwards of 48,000 new homes!

 

Dr Smith is inordinately proud of his creation. But, having made space for all these mini-Edens, the Minister, like the Creator God of the Book of Genesis, has simply blessed the property developers, instructed them to “be fruitful and multiply”, and withdrawn from the scene.

 

Actually building houses, in numbers sufficient to significantly reduce homelessness, is not something this government believes the state should be doing. It is the National Party’s firm belief that the actual process of house construction should be left to the market’s “invisible hand”. (Presumably, the one wielding the invisible hammer!)

 

Unfortunately for Dr Smith, the Market has so far displayed minimal interest in constructing homes for poor people. (Or even, it must be said, for tolerably well off people.) According to the Labour Party’s Housing Spokesperson, Phil Twyford, the Auckland City Council has been able to account for only 102 houses completed in Dr Smith’s SHA’s since 2013.

 

“We now officially have more Special Housing Areas than actual houses built in them”, quips Mr Twyford. “The consenting rate still languishes at 4300 below the 13,000 new homes Auckland needs every year just to keep up with population.”

 

It’s important to understand that this exchange between Dr Smith and Mr Twyford is not about homes constructed for the poorest New Zealanders. These two politicians are merely debating the building of homes per se. In some parts of Auckland, the average price of one of these per se homes is fast approaching (or long ago exceeded) $1 million dollars. Hardly the sort of small change your average, poverty-stricken Kiwi family is likely to find down the back of the sofa!

 

Labour’s housing policy (assuming it remains Labour’s policy) is called Kiwibuild. It envisions the construction (by private developers) of 100,000 “modern affordable homes” over ten years for first-home-buyers.

 

Just how the very poorest New Zealanders are supposed to pay for a “modest entry-level home” priced at around $300,000 Labour does not explain. (And that $300,000 figure, cited when the policy was first released back in 2012, has likely inflated to around $500,000 in the current Auckland property market.)

 

Kiwibuild would, however, assist a great many young, middle-class couples into their first home – which is, unquestionably, a good thing. But, it would do little to address the acute shortage of low- and no-cost emergency accommodation which is presently forcing Maori, Pasifika and immigrant families into doubling- or tripling-up with relatives and friends. That’s when they’re not driven to sleep in caravan parks, under bridges, or in their cars.

 

The Finance Minister, Bill English, has, for some time, been arguing for a whole new approach to managing the burgeoning cost of New Zealand’s welfare state. By intervening early, says English, the State can save millions – quite possibly billions – of taxpayer dollars. Children raised in poverty, whose lack of a stable home environment often requires a host of extremely costly state interventions in later life, could, if targeted early for state assistance, end up becoming net contributors to society.

 

The rapid construction by Housing New Zealand of thousands of units of emergency accommodation would not only contribute to the well-being of thousands of New Zealand’s poorest and most vulnerable citizens, but would also largely pay for itself. Well-designed, warm, and energy-efficient, such units could be provided free-of-charge – at least initially – while their occupants lives were restored to some sort of order. Once family life had stabilised, regular rental payments could begin.

 

English’s actuarial approach to welfare would require considerable political courage to implement. The trick, electorally speaking, would be to demonstrate the huge potential savings in Vote Health, Vote Education and Vote Corrections. National’s slogan could be: “A tax-cut to every voter who provides a future for every child.”

 

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 27 November 2015.