Andrew Little –
Recently, I uncovered some shocking news. Buried in a report to Bill English was a statement from Treasury officials that New Zealand has a shortage of 60,000 houses, and this shortage is growing by over 1000 a month.
This basic shortage of houses is at the root of the housing crisis.
The results are all around us – out of control prices, speculators snapping up houses hoping to make a quick buck, skyrocketing rents.
It means families missing out on the Kiwi dream of owning your own place.
It means overcrowded, over-priced rentals.
It means families ending up homeless, living in motels, garages, and cars.
Leadership failure
Last year, the average family’s pay rise was entirely eaten by rising housing costs.
When you take into account other rising costs, family budgets are shrinking in real terms. (Prime Minister) Bill English calls that a ‘problem of success.’ I call it a failure of leadership.
National’s tinkering around the edges is not working. The number of houses being consented is now falling, when it needs to be rising.
So, what do we do about it? The simple answer is to build houses.
Leaving it up to private developers does not work. Their profit is in building big, high-spec, expensive houses. The average house built today is nearly 200 square metres and costs $400,000 without even counting the land.
You cannot blame the private developers for going where the cash is; their job is to make a profit.
Government responsibility
But the government can build affordable houses. Its job is not to make a profit. Its job is to ensure that the Kiwi dream of owning your own place is in reach for young families.
Its job is to ensure all our children have a decent place to live.
New Zealand has had housing crises before and we have always solved them the same way: the government steps up to the plate and gets tens of thousands of affordable homes built.
We have done it before, and it created the home owning society we want.
Let us do it again, and save the Kiwi dream.
The KiwiBuild Plan
How? Here’s the plan, we call it KiwiBuild.
First, the government puts up some working capital into KiwiBuild, which works with private builders to build affordably priced, modern starter houses and apartments. The kind of place you can raise a family.
KiwiBuild then sells the homes, at cost, to first homebuyers. Because these are starter houses and they are being built at scale, they will cost less than the average house today.
The money KiwiBuild gets from the sales goes into building the next round of houses and the cycle repeats. At the end of the programme, the money from the final sales is returned to the government.
Labour’s KiwiBuild will help stabilise house prices and increase the homeownership rate.
To make it happen, we would need more builders and more capacity in the construction sector. That is why Labour will subsidise builders who take on apprenticeships, make getting a tertiary qualification easier with three years fees free, and help set up a pre-fab housing factory in Gisborne.
Affordable Housing Authority
We will also need to speed up the development of new land, which is why we will create an ‘Affordable Housing Authority’ to cut through the red tape.
At the same time, Labour will lock the speculators out of the market to help first homebuyers get a look in. We will do that by banning foreign speculators from buying existing houses altogether, and making speculators who flip houses within five years pay tax on their profits.
This is all common sense, practical stuff. It just takes some leadership and vision. Unfortunately, those things are in short supply in the current government run by Bill English and (Building and Construction Minister) Nick Smith. They simply refuse to realise that the government needs to get off the side-lines and start building affordable houses even though homeownership has plunged to its lowest level in 66 years.
That is why housing will be the big election issue this year.
Labour has the plan to end the housing crisis.
National will not even acknowledge it exists.
To fix the housing crisis, we need to change the government.
Andrew Little is the Leader of the Labour Party and Leader of the Opposition in Parliament in New Zealand.
