Labour And Housing: The Winning Combination?

"Aww ... He's Good!" The public may have warmed only slowly to Andrew Little, but eighteen months into the job, familiarity is breeding not contempt but an almost reluctant admiration. Like the punters in the old television ad’, the voters have taken a tentative sip of Little, made a face, blinked several times, and then, with obvious surprise, pronounced him “good”.

 

IT’S A LONG TIME since Labour’s prospects have looked so rosy. The stumbles and falls since 2008 have been so numerous and so serious that Labour’s very survival as a party has been called into question. Such profound pessimism has, however, proved premature. The public may have warmed only slowly to Andrew Little, but eighteen months into the job, familiarity is breeding not contempt but an almost reluctant admiration. Like the punters in the old television ad’, the voters have taken a tentative sip of Little, made a face, blinked several times, and then, with obvious surprise, pronounced him “good”.

 

But, a thumbs-up for Little’s leadership, while necessary, is not a sufficient precondition for victory in 2017.

 

To win, a political party must have at least two things going for it. First, and most importantly, its opponents must be failing. Second, it must be able to offer a positive and believable alternative to the status quo. Labour’s already got the first, and its making steady and encouraging progress towards the second.

 

The Housing Crisis – especially in Auckland – is dragging National deeper and deeper into the electoral mire. Partly, this is the result of Phil Twyford (easily Labour’s best performing MP) keeping his boot firmly planted on National’s head. Mostly, however, the Housing Crisis is the obverse side of what, until recently, was the Government’s most valuable coin: Auckland’s crazily escalating property prices.

 

As the so-called “wealth effect” of rising Auckland house prices rippled out from their usual location-location-location in the city’s wealthiest suburbs and into the hitherto “modestly priced” suburbs of Auckland’s electorally crucial West, National’s fortunes rose with them.

 

“Waitakere Man”: that financially flush, but ideologically conflicted, member of a working-class grown increasingly accustomed to the trappings of a middle-class lifestyle; had learned how to appease his conscience by voting for Labour’s electorate candidate, while locking-in his outrageous property valuation by Party Voting National.

 

Auckland’s rising value has also been enough to keep those who, in earlier periods of New Zealand history veered towards racism and xenophobia, politically quiescent. The dramatic influx of immigrants from China and India was accepted by Waitakere Man because he understood that immigration pressures were crucial to realising, or leveraging, the capital gain of his increasingly valuable real estate.

 

Having set this voter recruitment and retention scheme in motion, however, National discovered that it could not be switched-off. The slightest downward trend in Auckland’s house prices would set off a panic that could only end in electoral disaster for the Right. By ensuring that Auckland’s property prices continued to surge upwards, the Government had excluded an entire generation of Aucklanders from the security of home ownership. Waitakere Man might be sitting pretty, but his children, “Generation Rent”, were not.

 

Even worse, the intensifying competition for scarce rental properties was driving the poorest Aucklanders out of the accommodation market altogether. The news that their fellow citizens, whole families, had been reduced to sleeping in their cars, pricked the conscience of even Waitakere Man. Homelessness, rack-renting, the diseases of poverty and overcrowding: these were the evils from which his parent’s generation had been rescued by the First Labour Government. Eventually, the grim realisation struck home. He could vote to increase his capital gains; or, he could vote for the restoration of social equity; but he couldn’t do both.

 

Cue, Andrew Little and the New Zealand Labour Party.

 

By a long overdue stroke of good luck, the Housing Crisis reached political boiling-point in Labour’s centenary year. Even the most cursory backward glance, by even the most historically-challenged voter, could not help but register the signal achievements of Labour’s 100-year-old history.

 

Somewhere, from deep in their knowledge store, New Zealanders recovered at least the salient details of Labour’s story. How a nation battered and bruised by the Great Depression had been put back to work; and how ordinary working families had been securely housed in sturdy dwellings, by the state.

 

Little’s challenge, now, is to devise a housing policy that meets the urgent needs of the homeless; offers Generation Rent their own homes at affordable prices; and ensures that property values across Auckland (and New Zealand) are not permitted to “crash”. Instead, Labour is hoping to gradually flatten out house prices, while incomes are lifted and price-to-income ratios reduced to more rational, and equitable, levels.

 

An explicit strategy of re-uniting the interests of the working and middle classes should lie at the heart of Labour’s re-election campaign. This cannot be achieved by restoring the fortunes of the former at the expense of the latter. Only a massive class alliance can generate the political heft required to secure massive economic and social progress.

 

When Labour deserted its working-class base in the 1980s it entered a moral wilderness. If it abandons the middle class in 2017 – it will stay there.

 

This essay was originally published in The Press of Tuesday, 12 July 2016.

Homes Are Where The Votes Are.

Working Class Voters' Ballot Papers At Work: A massive programme of state house construction; a graduated Land Tax; a radical and comprehensive overhaul of New Zealand’s tenancy legislation along European lines: each of these measures would lower the cost of housing dramatically. All those suffering from the worst effects of the current housing crisis, the young and the poor, have to do is vote for them.

 

NEW ZEALAND’S HOUSING SITUATION grows daily more perplexing.

 

In the country’s largest city, Auckland, the price of residential housing surges from one scarcely believable peak to the next. Neighbour’s stand open-mouthed as the sale-price of the property across the street is communicated to them in hushed tones and wide-eyed disbelief. Like the purchaser of a Lotto ticket, Auckland homeowners are mentally spending the hundreds-of-thousands of additional dollars they’re absolutely certain to win.

 

Woe betide the politician who tramples on those dreams.

 

Meanwhile, as the amount of the required deposit leaps impossibly far ahead of their ability to save such a sum, younger New Zealanders attempting to purchase their first residential property are growing increasingly desperate.

 

Woe betide the politician who tramples on those dreams.

 

The news media is calling it a housing crisis. But the advocates for state house tenants are crying foul. “How can there be a crisis,” they demand, “when hundreds of Housing NZ properties are standing empty?”

 

What’s going on?

 

The brutally simple answer is that those New Zealanders sufficiently motivated to participate in large numbers in general elections are ruthlessly enriching themselves.

 

With sufficient political will, New Zealand’s housing problems could be resolved quite quickly. To say this, however, is to beg the question of how that political will might best be summoned. A question which, in its turn, raises the perennial and deeply subversive issue of social class – and the bitter conflicts spawned when the interests of social classes clash.

 

For an excellent example of how these class conflicts get played out politically, we have only to look at the final days of the 2005 General Election Campaign.

 

The incumbent Labour Government was on the ropes, and the Don Brash-led National Party Opposition had the scent of victory in its nostrils. It was then that Labour’s campaign manager (and party president) Mike Williams sent out a last-minute letter to state house tenants. The letter warned them that, if Labour lost the election, the new National Government’s housing policies would see many of them evicted from their homes.

 

The letter had the desired effect. As Election Night 2005 drew to its close, and the counting of the ballots cast in the polling booths of the nation’s sprawling state house suburbs was completed, Labour’s tally of Party Votes surged triumphantly past National’s to secure for Helen Clark her final and most dramatic electoral victory.

 

Had those same state house tenants turned out to vote in the same numbers at the 2008, 2011 and 2014 General Elections, then John Key may never have become New Zealand’s prime minister. But they didn’t – and because they didn’t (at least in part) the policies of John Key’s National-led Government have, for the past eight years, exacted a very heavy toll on the nation’s state house tenant’s.

 

The same could be said of the nation’s younger citizens.

 

In 2005, Helen Clark (egged on by former student president, Grant Robertson) announced that Labour would be introducing interest-free student loans. With this prospect before them, scores-of-thousands of young New Zealanders made the journey to the polling-booths on Election Day to vote for the thousands-of-dollars-worth of savings Labour was promising. A significant number of their parents did the same thing – and for much the same reason! They, too, had a role to play in pushing the red line above the blue line.

 

In the 2014 General Election, however, only 49 percent of the 743,200 New Zealanders aged 18-29 years bothered to cast a vote. Of the 864,100 New Zealanders aged 60 years and over (they’re the ones with the houses) the participation rate was 87 percent! The young people struggling to buy their first home in 2016 should, perhaps, consider how much more attention politicians would pay to their housing needs after 2017, if 87 percent of them turned out to vote.

 

At the moment, middle-class Kiwis (especially those living in Auckland) are doing amazingly well out of John Key’s government’s housing policies. With the thumb of unprecedented immigration numbers pressing down on the demand side of the scales, and the supply side embarrassingly light on available residential properties, existing home-owners are laughing all the way to the banks – who are only too happy to lend them the money for a second, third or fourth house.

 

It’s not difficult to guess which party these folks will be voting for next year.

 

Nor should it be difficult for Labour, the Greens and NZ First to work out what they need to offer young and poor voters in 2017.

 

A massive programme of state house construction; a graduated Land Tax; a radical and comprehensive overhaul of New Zealand’s tenancy legislation along European lines: each of these measures would lower the cost of housing dramatically.

 

All the young and the poor have to do is vote for them.

 

This essay was originally published in The Press of Tuesday, 3 May 2016.

The Space To Make Dreams Come True: Why Labour’s Latest Move On Housing Could Be A Ground-Breaker.

Back To The Future: By sanctioning green-field (as opposed to brown-field) housing development, Phil Twyford and his colleagues are now free to draw forth from Labour’s honourable past the sort of planning ideas which, had they been implemented at the time they were developed (the late-1940s) would have made Auckland a much easier city in which to live and move around.

 

PHIL TWYFORD has urged the National Government to rule Auckland’s contentious Urban Growth Boundary out of the city’s Unitary Plan. This is a major policy announcement from Labour’s housing spokesperson. By embracing the virtues of expansion over intensification, the party has repositioned itself as a defender of Auckland’s characteristic urban sprawl – and everything that goes with it. That Twyford’s announcement prompted congratulatory media releases from the National Party, Business New Zealand and the Taxpayer’s Union is a measure of just how big a concession Labour has made.
 

Labour should not, however, be condemned simply because in some respects (and only in some) its housing policies are similar to the Right’s. Politically-speaking, the policy of urban intensification was as impractical as it was controversial. Homeowners were always going to balk at the prospect of multi-storeyed apartment buildings sprouting up in their leafy streets. Overruling those objections would have required a degree of heavy-handedness quite foreign to the New Zealand scene. Those deemed responsible – be they local or national politicians – would have paid a heavy price.
 

Policy-wise, Labour now has room to breathe. It also, quite literally, has the space to display some progressive creativity. By sanctioning green-field (as opposed to brown-field) housing development, Twyford and his colleagues are now free to draw forth from Labour’s honourable past the sort of planning ideas which, had they been implemented at the time they were developed (the late-1940s) would have made Auckland a much easier city in which to live and move around.
 

Seventy years on, however, with the population of Auckland approaching two million, the size of the planning canvass has expanded considerably. Looking forward, we must now envisage an urban corridor extending all the way from Hamilton to Whangarei.
 

A conurbation of this size cannot be serviced efficiently by the automobile. Crucial to its success would be the creation of a state-of-the-art rapid-rail network capable of whisking commuters from Hamilton to Downtown Auckland in 30 minutes. (If that seems impossible, just have a word with the French and the Chinese!) The huge enabling power of such a network would be more than sufficient to underwrite the many housing developments along its length.
 

Rather than leave the design and construction of these new communities to the private sector, Labour should promote the creation of a public design and construction entity dedicated to building homes, apartments and community facilities equal to anything currently on display in Germany and Scandinavia.
 

This massive public construction programme (which would not only encompass the building of houses and apartment buildings, but also the new rapid-rail network) would need to be accompanied by a radical reform of New Zealand’s tenancy laws. Only by, once again, making the State the nation’s pre-eminent – and most accommodating – landlord will New Zealanders enjoy access to well-designed and healthy homes, with full security of tenure, at an affordable rent.
 

On RNZ’s “Morning Report”, this morning (18/5/16) Max Rashbrooke and James Crow spoke to Guyon Espiner about the urgent need for 20,000 new homes – just to meet the needs of this country’s homeless families. Many of these families reside in Auckland, and neither their needs, nor the needs of the tens-of-thousands of New Zealand and immigrant families who intend to make the Auckland Region their home, will ever be adequately met by the existing, market-driven, system – which daily demonstrates its incapacity.
 

By abandoning the Urban Growth Boundary, Labour has given itself both the physical and intellectual space in which to prove that it still knows how to make New Zealanders dreams come true.
 

This essay was originally posted on The Daily Blog of 18 May 2016.

Hey, Bomber! Inter-generational War Is Not the Answer To Auckland’s Problems.

Open Season On Baby Boomers: The highly topical second episode of the multi-media talk-show Waatea Fifth Estate covered the controversy surrounding housing intensification and the Auckland Unitary Plan. The otherwise excellent show was marred only by the casting of the Baby Boom Generation as the guilty party. Ageism can no more supply a progressive answer to Auckland's housing problems than racism or sexism.

 

NO, NO, NO, BOMBER!* This ageism has got to stop – now. You wouldn’t permit anyone writing for The Daily Blog to discriminate against people on the grounds of race, gender or sexuality. So what, in the name of Progressive Politics, are you hoping to achieve by blaming everyone born between 1946 and 1965 for Auckland’s housing crisis?

 

The Baby Boom generation didn’t choose their parents, Comrade! Any more than a black man chooses his ethnicity, or a woman chooses to be born female. Scapegoating people on the basis of their date-of-birth makes no more sense than scapegoating them because of their genetic make-up, or because their sex chromosomes are XX and not XY.

 

I’m genuinely affronted by all this Baby-Boomer-bashing, old friend. And if you want to know why, then I’d invite you to sit down and watch Episode 2 of Waatea Fifth Estate, and every time the word “Baby-Boomer” or “Boomer” is used, to mentally over-dub the word “Jew”.

 

Can you imagine the firestorm of criticism that would erupt if Jews were accused of preventing young Kiwis getting into their first home? Or if Jews were accused of taking all the good things that were on offer in the 1960s and 70s, and then denying them deliberately to succeeding generations?

 

Any broadcaster disseminating such ideas would immediately fall foul of both the Race Relations Act and the Human Rights Act. Because it is a criminal offence to incite racial hatred, and/or, to discriminate against one’s fellow citizens on the basis of their ethnicity or religious belief.

 

And while we’re on the subject of the Human Rights Act (1993) perhaps it would be helpful to point out that Section 21 of the legislation includes, among a long list of “prohibited grounds of discrimination”, the ground of “age”.

 

Also worth considering is the prohibition contained in the Fourth Geneva Convention against the imposition of collective punishment. Article 33 clearly states that: “No persons may be punished for an offense he or she has not personally committed. Collective penalties and likewise all measures of intimidation or of terrorism are prohibited.”

 

Progressive people are rightly outraged when the Israeli authorities inflict massive material and human damage on Palestinian communities in retaliation for the hostile actions of a few Hamas fighters. I would, therefore, like to hear the explanation for why we shouldn’t be just a teeny-wee bit upset when an entire generation of human-beings is blamed for societal ills they did not create and which a great many of them – myself included – wholeheartedly deplore.

 

Because, to be honest, Bomber, your eagerness, in Episode 2 of W5E, to see the planting of Generation X and Y settlements in the Baby Boomer occupied territories of Auckland’s leafy suburbs would have done the average West Bank Israeli settler-developer, and his IDF-protected construction teams, proud.

 

Forgive me, Comrade, but fomenting inter-generational warfare (which, ultimately, entails turning children against their parents or grandparents) is not, and can never be, a progressive cause. Indeed, it strikes at the most primal forms of human solidarity, and at the most essential drivers of human co-operation. Worst of all, Bomber, it misdirects the legitimate rage of those denied the social goods their parents were able to enjoy away from the social class which bears the actual responsibility for their destruction.

 

Just ask yourself, Bomber: Was it the Maori New Zealanders born between 1946 and 1965 who deliberately destroyed their own employment opportunities? Are they the ones responsible for gutting their rural communities? Did they set out to create urban breeding grounds for crime, domestic violence and drug abuse? And was it the Pasifika Baby Boomers who deliberately ran down their local schools and health services? Are they the ones responsible for the decay of social housing in New Zealand? Did Pakeha Boomers demand the destruction of their own unions? Must they be held responsible for the political marginalisation of the entire working class? And did all of these groups really conspire to thwart the aspirations of their own children and grandchildren?

 

Those responsible for the hollowed-out shell that is 21^st Century New Zealand society are Baby Boomers only in the sense that they are also human-beings. They changed this country for the worse, not out of some mysterious generational impulse precipitated by listening to the Beatles or eating Eskimo Pies, but because it was in their interests to destroy the social-democratic beliefs and institutions that had so successfully limited their ability to enrich themselves, and which, if left in place, would have further undermined their political and cultural power.

 

The truly outrageous aspect of Auckland’s housing crisis is how effectively Auckland’s citizens have been excluded from playing any role in fixing it. The Auckland Super City is democratic in name only. It’s true purpose is to create opportunities for property developers (and all of the other businesses their activities sustain) to go on making profits. The power of Auckland’s ruling class will not be broken by setting one short-changed generation against another, but by creating a movement in which old and young join forces to determine what needs to be done, and out of whose pockets the money to pay for it should be taken.

 

* “Bomber” is the nom de guerre of Martyn Bradbury, Editor of The Daily Blog. Martyn and the author, Chris Trotter, have been friends and comrades since the mid-1990s.

 

This essay was originally posted on The Daily Blog of Saturday, 27 February 2016.

The Least They Could Do

Tinkerer-in-Chief: John Key announces changes to the law relating to property speculation. Many of John Key's opponents, and some journalists, accused him of executing a U-turn on the issue of Capital Gains Tax. Labour's Andrew Little disagreed, tweeting that Key's announcement was nothing of the sort. The Prime Minister, said Little, was merely "tinkering with the housing market".

 

IT WAS THE LEAST THEY COULD DO. Indeed, had they done anything less it might have been mistaken for doing nothing at all. Still, the measures announced to the Lower North Island Regional Conference of the National Party on Sunday by John Key and Bill English were better than nothing. It’s always encouraging to see a government taking law enforcement seriously. Providing the IRD with the resources it needs to enforce already existing legislation against property speculation (including speculation by foreigners!) may even help to slow down Auckland’s runaway housing market. No, seriously, it might!

 

The government’s announcement is being represented by some Labour and Green MPs (and some of the news media) as a major U-turn. National’s hitherto staunch opposition to the introduction of a Capital Gains Tax (CGT) has, according to this reading, simply melted away.

 

Labour’s Jacinda Ardern, for example, tweeted archly that she had received the news at a Labour regional conference “otherwise known as the place we come up with ideas that National dismisses and then adopts.”

 

In a media release, the Greens’ co-leader, Metira Turei, echoed Ardern’s sentiments, saying: “This is a welcome U-turn from the Government. Only last week they were saying that capital gains taxes don’t work, so it is great they have changed their mind so quickly.”

 

The jibes of its opponents notwithstanding, the term “Capital Gains Tax” appears nowhere in the National Government’s media releases. On the contrary, the measures announced are all couched in terms of making the existing property tax regime more effective.

 

Interestingly, this is also the way that the Labour Party leader, Andrew Little, chose to characterise the Prime Minister’s announcement: “National is tinkering with the housing market”, opined Mr Little, whose preference for ditching Labour’s pledge to introduce a CGT is well known. He described National’s moves as “tentative and incremental”, and accused the Prime Minister of “creating a massive loop hole with his new ‘bright line’ test which will exempt speculators who hold onto their properties for longer than two years.”

 

Perhaps Mr Little was recalling the fate of the Third Labour Government’s Property Speculation Tax, introduced to Parliament in 1973 by Norman Kirk’s Finance Minister, Bill Rowling. Ironically, this measure was aimed at curbing a similarly rampant Auckland property market, and it, too, exempted speculators who held onto their properties for longer than two years.

 

The response of the targeted speculators is well described in a 2010 piece by Fairfax NZ’s business columnist, Bruce Shepherd:

 

“This tax did alter behaviour, in that those who held real estate held on to it for the requisite period and were gratified to do so as the market rose even faster. Simple, really, with hindsight: if you want to reduce property prices, pretty dumb to compress supply.”

 

Pretty dumb? Well, yes, it is pretty difficult to argue that the speculators of 2015 will be any less quick to spot the “massive loop hole” in the two-year rule than the speculators of the mid-1970s.

 

“But, hold on!”, National’s supporters will object. “Isn’t the government putting its thumb on the supply side of the housing crisis scales by bringing more and more residential-zoned land onto the market?”

 

Yes, they are. Although, it’s also fair to say that the measures adopted to date in no way compel land-bankers to relinquish their property at a rate sufficient to achieve the sudden and appreciable drop in the price of sections that first home buyers are so desperately seeking.

 

These sorts of voluntary, private sector-driven half-measures will never satisfy the supply side of the Auckland housing market. The National Party is quite simply incapable, for all the obvious ideological reasons, from launching the measures that will deflate Auckland’s swelling speculative bubble.

 

That task can only fall to a party with an ideological preference for state and municipal intervention in the housing market. Such intervention would necessarily entail the formation of a state-owned design and construction force along the lines of the highly innovative and creative Ministry of Works that grew out of the massive state house construction programme of the 1930s and 40s.

 

Complementing all its actual house construction, however, a future centre-left government would also need to undertake a thorough-going reform of New Zealand’s antiquated and deeply unjust tenancy laws and regulations. Genuine and long-term security of tenure, of the sort enjoyed by the municipal apartment dwellers of Germany and Scandinavia, would drive the shift in accommodation expectations so urgently needed in New Zealand’s major cities.

 

The demographic structure of New Zealand is changing very rapidly and it is increasingly clear that nothing short of a revolution in housing policy will allow our planners, developers and builders to keep pace.

 

Sunday’s housing policy announcements were about the very least the National Government could do. But so much more remains to be done.

 

This essay was originally published in The Press of Tuesday, 19 May 2015.