A MATE OF MINE sent me an e-mail. “I guess no one told Phil Twyford about Ali Baba.” I followed the link to an advertisement for kitset homes manufactured in China. You could have one of these: completely broken down and shipped to your nearest port in a container; for approximately $NZ15,000.
The quality of the home I cannot vouch for, but that really isn’t the point, is it? If this Government had possessed the courage to, just once, think outside the square, then by now the housing crisis would be over. By negotiating a deal with the Chinese, whereby cheap kitset homes were shipped to New Zealand at a fraction of the cost of building a similar house here, the social and economic problems attributable to the lack of low-cost housing could have been tackled head-on.
The potential problems associated with the quality of these kitset homes could easily have been addressed at a government-to-government level. Given the enormous pay-off for Beijing, the durability and weatherproofness of such dwellings could be guaranteed. With the state supplying the land and installing the necessary infrastructure, whole towns could have sprung up out of the ground with astonishing speed – as they once did in the days when New Zealand still possessed a Ministry of Works.
Just think of the economic and social impact of being able to supply a warm, dry, and healthy home for every family in need of one. The satisfaction of this need would, obviously, have reduced property speculation dramatically and kept private-sector rents low. In response, investment would have been re-directed away from real estate and into more productive areas of the economy.
Welcome as these effects might be, they would pale into insignificance when compared to the improvement universal housing would bring to New Zealand’s rapidly declining social indicators.
The educational performance of New Zealand’s poorest children would improve rapidly once their parents were safely and securely housed. Nothing retards a child’s educational attainment like being forced to move frequently from house to house and school to school. The elimination of serious overcrowding would also eliminate a broad range of the physical and mental health problems generated by too many people living in too little space. Domestic violence, too, would reduce dramatically.
Solving the housing crisis would reveal to every New Zealander just how many of the country’s other problems are the direct result of widespread homelessness and unrelenting housing insecurity.
The problem, of course, is that even if this government’s first housing minister, Phil Twyford, had been made aware of the capacity of the Chinese construction industry to meet the demand for cheap public housing, he would have been confronted immediately with a whole host of obstacles.
Obviously, New Zealand’s domestic construction industry would have screamed blue-bloody-murder at the price-depressing effects of such formidable foreign competition. The seriously disrupted relationship between local government, land-bankers and builders would, similarly, have provoked loud protests. The most ear-splitting shrieks, however, would have come from landlords. Overnight, their business model would have collapsed – along with their ability to ruthlessly immiserate their tenants by constantly ratcheting-up rents.
Owning multiple properties would no longer make commercial sense. Thousands of former rental properties would thus be put up for sale in what would very soon become a buyers’ market. What had been a crippling shortage of affordable housing would suddenly become a glut. Prices would tumble, and the dream of home-ownership for middle-class thirty-somethings would be realised.
As this cascade of consequences descended upon the New Zealand economy, homeowners would watch with mounting horror as the putative value of their houses declined precipitously. The powerful sense of well-being engendered by the seemingly unstoppable rise of house prices, sweetened by the prospect of pocketing hundreds-of-thousands of dollars in tax-free capital gains when they eventually sold-up and moved to the provinces, would evaporate in a red mist of anger and resentment.
Exposed, in all its ugly reality, would be the naked class interests bound up in the maintenance of the housing crisis. By freeing the working-poor and beneficiaries from the misery of housing insecurity and homelessness, the Deus ex machina of cheap Chinese kitset homes, purchased with cheap Chinese credit, would have produced a profound re-ordering of class relations. The 60 percent of New Zealanders who had been on the winning side of the housing crisis would not have been best pleased.
To strategic onlookers located in Washington, London and Canberra, such a sudden reversal of class fortunes, especially one made possible by the shrewd intervention of Beijing, would’ve been utterly unacceptable. As disturbing to our “allies” as it was to those on the deal’s domestic downside.
The very idea of the New Zealand working-class clasping with relief and gratitude the helping hand offered to them by a courageous Labour Government, and its Chinese Communist partners, would give New Zealand’s Five Eyes partners the screaming heebie-jeebies. In the time it takes to “make the economy scream”, Jacinda Ardern would’ve found herself walking the same path as Salvador Allende.
The problem is not that New Zealand’s housing crisis cannot be fixed, but that it is not in the unequivocal material interest of enough New Zealanders to allow it to be fixed – not even at Ali Baba’s knock-down price of $15,000 per unit.
This essay was originally posted on The Daily Blog of Thursday, 3 February 2022.