Tuesday 13 February 2018

Taking Stock: Is the Government Doing Enough to End the Housing Crisis?

A Fading Dream: “The past 25 years have seen the gradual demise of the so-called Kiwi Dream – a place where home ownership and the economic independence which this offers, was within reach of most working families. Home ownership rates have fallen to a 60-year low and could fall further. These falls have been alongside rapid house price inflation in many parts of New Zealand and, with this, deteriorating affordability. We are quickly becoming a society divided by the ownership of housing and its related wealth and recent housing and tax policy settings appear to have exacerbated this division.” - Stocktake of New Zealand's Housing, 12 February 2018.

THE FULL MAGNITUDE of the housing crisis confronting the new government stands revealed in its Stocktake of New Zealand’s Housing. Released this morning, the document paints a far worse picture of the situation than even the parties now in government presented to voters from the opposition benches.

In the words of the three authors of the stocktake, Alan Johnson of the Salvation Army, Otago Public Health Professor Philippa Howden-Chapman and economist Shamubeel Eaqub:

“The past 25 years have seen the gradual demise of the so-called Kiwi Dream – a place where home ownership and the economic independence which this offers, was within reach of most working families. Home ownership rates have fallen to a 60-year low and could fall further. These falls have been alongside rapid house price inflation in many parts of New Zealand and, with this, deteriorating affordability. We are quickly becoming a society divided by the ownership of housing and its related wealth and recent housing and tax policy settings appear to have exacerbated this division.”

The policies advanced by the Labour-NZF-Green government in response to New Zealand’s housing crisis – most particularly Labour’s KiwiBuild initiative – no longer impress informed observers as either bold or comprehensive enough to bring about a speedy resolution of the crisis. On the contrary, they seem doomed to fail: there being neither the material, nor the human, resources required to make them succeed.

One has only to look back at the first great wave of state-initiated and funded house construction to appreciate the full scale of the difficulties confronting the new government.

Between 1936 and 1949 the first Labour government was responsible for the construction of 30,000 state houses. In other words, over a period of 13 years, the Department of Housing Construction and its private sector contractors were able to build fewer than a third of the number of dwellings which the present government has promised to build in ten!

What’s more, those 30,000 state houses were built at a time when the New Zealand economy was awash with unemployed labour and underutilised resources impatient to be set to work. Labour’s state housing programme was the New Zealand equivalent of US President Franklin Roosevelt’s “New Deal”: a massive public works programme designed to both enhance the nation’s quality of life and provide steady and well-paid employment for its people.

One of the ways the First Labour Government accomplished these goals was by mandating the use of local materials in state house construction. This decision gave an immediate and massive boost to all those businesses ancillary to the construction industry. To help the private sector keep pace with the state-induced demand, the Department of Housing Construction established two publicly-owned factories dedicated to producing the standardised joinery used in state house interiors.

The present government’s chief promoter of the CPTPP, David Parker, might pause to consider that such a policy of buying and using only Kiwi-made and sourced materials is expressly forbidden in practically all of the free-trade agreements New Zealand has signed since 1984 – including the CPTPP.

The state housing programme of 1936-1949 involved an unprecedented mobilisation of New Zealand’s human and material resources to construct a total of 30,000 dwellings. Even allowing for the fact that New Zealand’s population has more than doubled in size, how likely is it that Labour’s Phil Twyford is going to out-build Jack Lee’s Department of Housing Construction by a factor of 3 – in just 10 years?

Is it even remotely feasible that: from a tight labour market already suffering serious skill shortages; and from a construction sector already running at full-tilt; this government will be able to elicit an average of 10,000 additional houses per year?

Because, just to be clear, that total of 30,000 state houses constructed between 1936 and 1949 was over-and-above the normal total of dwellings commissioned and constructed by and for private companies and individuals. It is not yet clear whether Twyford’s promise of 100,000 “affordable homes” between 2017 and 2027 is on-top-of, or included-in, the output of private house construction.

It is important to remind ourselves at this point that Twyford’s “affordable” KiwiBuild homes are expected to sell for between $500,000 and $600,000 – a price completely beyond the reach of the tens-of-thousands of New Zealanders who possess neither a home of their own, nor a secure tenancy in somebody else’s.

For these: the working-poor on rock-bottom wages; Kiwis struggling to survive on a benefit; and, increasingly, for pensioners without a freehold home of their own; the Labour-NZF-Green government is promising to build just 1,000 state houses a year.

With the findings from the Stocktake of New Zealand’s Housing in their hands. With their heads chock-full of data showing how desperate New Zealand’s housing situation has become, Mr Twyford and his colleagues are proposing to build 1,307 fewer state houses than Jack Lee and the First Labour Government managed to build in a little country laid flat by the greatest depression in human history – eighty years ago.


This essay was posted simultaneously on Bowalley Road and The Daily Blog of Tuesday, 13 February 2018.

11 comments:

  1. Timely Chris to put some strong words forward on the housing situation, even if the report had not been released now. NZs all have been derelict in not taking more interest in this situation. We know we all need a home, a secure place, an address. When the Nats were putting up rents in a few stages, until they met market rents, there was no outcry, no popular concern.

    The churches remained quiet. Everyone was into charity mode back in the 1990s. But NZ built itself up from harsh beginnings and we hoped that we were beyond that and thought no more about it. Something would happen to solve the problems. We were too busy planning a change of colour for our lounge-room curtains. Now we are busy trying to cope with the high prices and can't understand the simple connection between unnatural demand from the milch-cow of immigration at all levels of class, and the king-hit of lowering wages and highering dwelling costs. And the streets are full of uninspired people dressed in grey and black, without the spark of vivacity to press for a change from this miasma of conformity.

    One simple leading idea would help. It would be a mascot for all the other work coming along behind. People would be given help to erect kitset tiny houses in a semi-circle of four with covered driveways between them, with fire-proofing material on each side. These could have clothing lines hanging beneath them. People would find neighbours from meetings and groups attending building workshops. So they would start as intentional groups which would help each other build, perhaps in the weekends, and have small secure homes that they would keep in good order with fenced off playing areas etc. Small, people centred, with a certain amount of choice of colour, but the group in similar style. Even if they only lived there for a few years, it would be a start, and catch the imagination and enthusiasm of those who are of the right stuff, and want to live in a friendly community. Land provided by government, trying to get them rolling around the country, starting in Auckland and then working through Councils who would help identify suitable land if any, near transport, job centres, gather names with criteria and personal CVs, and then government-held workshops, agreements as to process, timetable, method and supervision.

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  2. Politicians are a bit like used car salesman, which is probably why they are trusted about as much. They will promise you anything until they've got your money/vote. Oh well.

    Kalsarikännit!

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  3. Twyford et al seem good at talking & commissioning reports.

    Action is the only thing that counts for anything.

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  4. "the present government’s chief promoter of the CPTPP, David Parker, might pause to consider that such a policy of buying and using only Kiwi-made and sourced materials is expressly forbidden in practically all of the free-trade agreements New Zealand has signed since 1984 – including the CPTPP."

    He may well....and decide that a competitive tender with conditions that weight requirements more easily met by resident manufacturers is the solution.

    One thing would appear obvious, to have any possibility of making a positive impact on the current housing crisis a reenactment of the original state housing programme is required (along with the state backed training) and the less time wasted by the Minister coming to this conclusion the better.

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  5. Damn you GS. You keep saying things that require learning something new! It seems that you want to be like Mae West who used to be Snow White but drifted. I looked up google - and this is how that idea is expressed in Finnish.
    Kalsarikännit - thisisFINLAND
    https://finland.fi/emoji/kalsarikannit/
    The feeling when you are going to get drunk home alone in your underwear – with no intention of going out. A drink. At home. In your underwear. And there is a word for it. Kalsarikännit. Download image 1 Download image 2 · « Reindeer Joulutorttu » See all emojis · Joulutorttu. :joulutorttu: ...

    and pat
    One thing would appear obvious, to have any possibility of making a positive impact on the current housing crisis a reenactment of the original state housing programme is required (along with the state backed training) and the less time wasted by the Minister coming to this conclusion the better.

    So right. Start in March on the first of a simple plan that involves people, get videos of groups doing supervised sweat equity housing work, of the kitset variety. Say 'It's a bit job and we are starting small' but quote 'A journey of a thousand miles begins with a single step' Lao Tzu and say with a smile 'I bow to ancient wisdom.

    And have parallel building plans under a master plan. One of these should involve importing bigger kitset houses. (But watch out for biosecurity matters, as recently a newly constructed small dwelling was found to be infested with termites - NZ or imported I don't know. But these imports will be another vector for the endless influx of pests we need to stem). Don't enable overseas contractors though, as we need to be tackling this ourselves without the learned helplessness we are lately demonstrating, drawing in foreigners and debt, and having them bring in their own workers.

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  6. Good luck to Graywarbler getting council consent on his otherwise great idea....

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  7. Chris, as always, you hit the nail on the head. Set aside the dreams of imperial splendour, trade agreements, security arrangements and sundry assorted other dreams, what is a government for?

    Pull up the drawbridge, forget ambition and international recognition, work for the people who pay your wages. Economic stability, GDP, the bank rate and all the other economic icons pale into insignificance when set against the plight of people who do not even have a roof over their heads.

    I could go on, but disregard the opinions of the wealthy elite and apply taxpayer revenue to the welfare of fellow citizens. People don't need mansions, Mac mansions, just a secure, warm, dry roof over their heads. Let's do it…

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  8. Oh, for fucks sake!

    This is how one builds a house.

    Get a piece of paper, a pencil and a rubber. No, not that kind of ' rubber' . A rubber for rubbing out pencil marks from the mistakes you'll make in the evolving house plan.
    Draw a square and mark out a bedroom, lounge, a kitchen/bathroom/toilet/ laundry area ( to keep your plumbing costs low and simple because all in one place )

    Get a piece of land. ( Yeah, right. )

    Mark out your square.

    Mark out your sticks. Aka ' piles'.

    Dig holes. Put sticks ( Piles ) in. ( H5 Treated to last longer than the life span of a borer beetle/rot.)

    Between sticks ( Piles) put other sticks. ( bearers.) Then, on top of the ‘ bearers’ put joists. Then, on top of the joists put flooring. Sheets of plywood are good but in NZ, with our vast forests and world class milling tech, we can’t afford fucking ply can we? No. We can’t. Therefore? Second hand.
    Moving on.
    Floor? Done. Holes for plumbing? Done. Build wall framing on your new floor, up they go, complete with door holes and window holes. One would hope, or, unpleasant surprise when you try to move in. Or out.
    So, walls are up, then roofing frames, also done on your nice new floor...up. ( Youtube )
    So, piles, drainage, flooring, walls, roof framing... Done.
    Then clad it all. Start with the roofing because, shelter and dry for other adventures with the dope pipe and beers.
    Roof. On. Gutters taking rain to drainage. Done.
    Walls? Cladded with what ever. Board and batten? Corrugated iron?
    Windows in. Doors hung. House. Built. FFS!?

    The bit between building our house above, living in our house above and being happy in our house above are the Banksters. They say No. No. No.
    They bully our local authority figures into strong-arming us with pathetic and absurd rules and regulations to protect the debts they project on us until we all die in debt to them.
    In short, ladies, gentlemen and children of the New Dawn of Debt.
    They fuck us because we let them. Homelessness? Buuuuuull shit! There’re literally mountains of materials, and vast spaces to build a house-ish thing, and... and...? It’s surprisingly fucking easy. Jesus! What is the matter with you guys??
    If one finds it challenging to insert a fluro vest up an authority figure ? Try a spot of grease, pop the fluro vest into a piece of 40 mm PVC, find the official anus, apply pressure between pipe and anus and with a short piece of spare building stick. Use stick down PVC pipe as a ram rod. Insert fluro vest, seal hole with silicon sealant, have beer, laugh out loud.

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  9. Countryboy

    Takes a week if you'r organised.
    D J S

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  10. Anonymous at 15.35
    I think some councils are moving to agreeing to this, they had to think harder because of Nats desire for SHAs (Special Housing Areas or the like).
    Then the word was that Labour scotched these because they always know best, and want to do things better, but want is a fine thing.

    Actually taking the best and dropping the dross, is far more economically sound and Labour Coalition could be reviewing what has happened, and keeping on along good lines. They may be thinking about continuing but am not sure of the latest pronouncements. But if LCoalition does continue, (with SHAs where suitable) they are being canny, and we want a lot of that sort of pragmatic wisdom.

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  11. Shamubeel is part of the problem

    https://www.pundit.co.nz/content/shamubeel-is-right-get-x-real-about-immigration

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