New Zealand housing crisis due to deliberate ignorance

We perceive ourselves as intelligent and in many respects we are, but there is a degree of ignorance and – perhaps – arrogance that goes with being a human being as well.

In some respects New Zealanders are quite aware of how lucky this country is to be free of major conflict, still have a relatively pristine environment and good performance in most social indicators. And yet, we are quite far behind – knowingly so in some respects – when it comes how we house ourselves, manage housing for the vulnerable, sick and disadvantaged and hindering our socio-economic performance as a result.

There is something about the housing crisis so fundamental that we cannot help notice, yet seem to be quite content in ignoring:

Anyone can buy a property in New Zealand. You do not have to be a permanent resident or citizen to do so, as is the case in many countries. 

In the United States a non American can buy property, but there are strings attached. These are normally involve houses being registered with a residents association or similar and ownership of a property registered such an organization is understood to be an acknowledgement that the owner is expected to comply with their rules.

In China one cannot own land, but rather gain rights to use that land. A person can purchase a house in a designated area after a year or more of studying or working in China.

In Israel the land owned by the Government, Jewish National Fund or the Israeli Land Authority can generally only be purchased by Israeli citizens or Jews. This comprises about 93% of all Israeli land. The 7% that is not owned by one of these bodies is privately owned and in great demand as there are few restrictions.

I have said before and will say again that New Zealand should require people to become permanent residents at least before they can purchase property in this country. In past articles I have shown how New Zealand can take steps to improve the housing crisis here and rather than write it all out again, here it is again.

What has Maori-National coalition achieved

When the Maori Party formed in 2004, I had hopes that a political vehicle was being made to address the poor socio-economic standing of Maori in New Zealand. I had hopes that under Tariana Turia and Pita Sharples the disproportionately high levels of Maori involvement in crime, truancy and unemployment would be addressed.

In fairness to the Maori and National Party, Whanau Ora, a significant health care plan that is community rather than institution based, enabling Maori to access healthcare with recognition of cultural principles was passed into law. This was in 2008 as a result of the coalition agreement, and became a cornerstone in the 2011 coalition agreement.

But beyond that, what has this coalition achieved in terms of addressing Maori socio-economic issues? Not a lot.

Although the Treaty of Waitangi settlements are very important to Maori and to Aotearoa/New Zealand on the whole, I have the feeling that Maori are being further marginalized by a party that is set on dealing with historical issues rather than what is in front of them. I fail to see how arguing over kaitiakitanga of the seabed and foreshore is going to assist someone trying to explain to Work and Income New Zealand why they should be on the unemployment benefit.

At this point, it is perhaps appropriate to acknowledge significant Maori land is locked up in the sense that legal constraints on who can do what with it means development options are limited. These constraints, which are not all that well understood by the Government or indeed by Maori themselves arise from cross ownership and the income stream is negligible, thereby not giving incentive to invest in the land. Because of this, some opportunities for employment and income generation are lost, but still the socio-economic problems remain.

Family violence, truancy, crime, youth unemployment, drug use are all issues that are affecting Maori disproportionately more than non-Maori. Some of these issues can only be solved with community input, whiilst others will require legislative changes enable an appropriate response. To some extent this is supported by research done by the Ministry of Business Innovation and Employment, whose January 2016 report found Maori still under perform in labour market indicators.

How can the Maori Party be a true advocate for Maori and Maoridom when it is failing to advocate for those Maori on the fringes of society? I am thinking of those from broken homes, with little or no direction in life, few or no life skills and no mentor figures to keep them out of trouble. I am thinking of – but not limited to – those who come from “Once Were Warriors” type backgrounds, and those who have clashed with the law and want to turn their lives around but have no idea how.

When these people and their needs are addressed, maybe then the Maori Party can say it has done some good. But that is not now.


Flogging off New Zealand housing

It seems almost too outrageous to be true. An event that lends credence to the claims of New Zealand First leader Winston Peters that New Zealand is being sold off to the highest bidder, in the most literal sense, will happen if Parliament pass legislation to permit the sale of state owned housing to Australians.

The New Zealand Government says it is going to be selling state housing, bypassing the agency nominally responsible for such activity – Housing New Zealand – completely. In the most literal sense, the National led Government of John Key is selling off New Zealand. The arrogance is astonishing. But right before our eyes in the New Zealand Parliament, the Minister of Social Housing is bringing legislation that will seek to permit exactly that. But not only is the legislation proposing to do that, it is also proposing that land acquired under the Public Works Act cannot be sold back to the original owner.

The Minister of Social Housing, Paula Bennett, claims that the rights of refusal held by Iwi still exist. She says that it simply clarifies that the provisions of the Public Works Act have never permitted the handing back of state housing properties to the original owner. Ms Bennett insists that it is quite difficult to arrange the transfer of specific properties.

But why is she wanting to arrange a transfer, and of what properties?

To me this is a Ministerial power grab. It is not about clarifying provisions in an Act of Parliament. It is not about improving the regulation of the New Zealand state housing stock in any way. It is about the growing housing crises caused by a combination of the Government not wanting to intervene in the market, the market being overheated by outside interests to the point it might soon have a meltdown and no long term plan for the sustainable development of the residential market.

An old Garrick Tremain cartoon depicting an earlier Government letting investors tunnel their way into New Zealand without the public’s knowledge comes to mind….


Solving New Zealand’s housing crisis

It is a political foot ball. Or at least that is how the issue of housing seems to be treated. Everyone wants to take possession of the ball, but no one seems to be able to decide a long term course of action for it once in their possession. Some want to boot it out because they are in denial there even is a housing problem. Others want to keep the ball on the field for as long as possible. The ordinary New Zealander is very much a spectator in a game which seems to be getting played by non-New Zealanders but on New Zealand soil. Such is the issue of housing.

It is an issue we can as a nation get in control of. But to do so, we must understand housing as an issue.

I would love to go flatting, meet new people and develop my social skills better in ways that simply cannot be done at home. But I am effectively priced out of the rental market in Christchurch, which is suffering the post disaster blues of there just simply not being enough affordable dwellings across all categories. Land lords have substantially hiked rents, whilst an influx of people to help with the rebuild is creating another set of pressures that looks set to persist for at least a few years.

The Government loves to blame the Resource Management Act for everything under the sun. In the case of housing, it blames land zoning, whilst quite deliberately ignoring the fact that land zoning plays a very important role as a planning tool. Land zoning is essential for classifying different types of use such as light commercial premises such as small businesses. It also comes in use when isolating hazard prone land such as that on an active flood plain or adjacent to a known fault line (case in point, Franz Josef – refer to Proposed Plan Change 7, Westland District Council). It also blames the R.M.A. for being too restrictive around the rules of subdividing land. As blame games go, this is getting rather old and it annoys me every time it comes up.

And yet, there are plenty of ways we could intervene:

1) An idea that reasonates with me is to prevent anyone from a country where New Zealanders cannot buy land, buying land here. It would force the Governments of those nations to talk to the New Zealand Government. It would quite quickly cool the market down. But is there any party brave enough to try passing the necessary legislation?

2) A Capital Gains Tax is another popular idea. It would not stop non-Kiwi’s buying, but it might put a check on the propensity of people buying investment properties that they have no intention of using. Even the Reserve Bank has suggested to Prime Minister John Key that he reconsider his anti-C.G.T. stance. Whether Mr Key does or not is another issue altogether.

3) Establishing a register of foreign owned assets in New Zealand. A register on its own will not do anything, though an effective one will tell New Zealanders, who owns what and whether they are actively using it.

4) Require property purchased by non-New Zealanders in New Zealand to be their primary property.

I can think of more if given the time, but I think a combination of these would go some way towards solving the housing crisis currently engulfing New Zealanders dreams of owning property in their own country.

Understanding the New Zealand housing crisis

There is a housing crisis. There must be a housing crisis when a modest dwelling in Auckland costs $800,000 and most New Zealanders are simply priced out of the market. And yet, there is not a housing crisis. At least not if you believe Prime Minister John Key, Minister for Housing Nick Smith.

Except that there IS a housing crisis. The crisis is not a purely Auckland thing either, though the highest prices are perhaps there. The crisis is also a Christchurch issue, albeit for entirely different reasons. They are quite different cities geographically – one the gateway to New Zealand, the other the gateway to the South Island; one struggling with the common problems that go with being in a location surrounded by salt water on a narrow isthmus, the other trying to rebuild after a major natural disaster.

There are several sets of causes. In Auckland and Christchurch there are causes for the housing crises in those cities that are specific to them. But there is also a set of causes that are part of a bigger, New Zealand-wide problem. To understand the context of the Auckland and to a lesser extent the Christchurch crises better, one needs to understand the causes of the New Zealand-wide problem:

  • New Zealand has – and shall continue to do so for the foreseeable future – a shortage of skilled labour to build the houses, which means there is a lot of demand for carpenters, electricians, plumbers, landscapers and so forth. In building a house one obviously wants competent trade staff, but they also want it to be affordable.
  • New Zealand is fairly generous in terms of how it permits non-citizens to buy and/or rent properties in New Zealand. Whilst I have no problems with this, I think every nation should put its own people first, which can be done without developing a xenophobia. In terms of New Zealand housing we are failing on both counts – we are not putting New Zealanders first, and xenophobia is developing because of that failure.
  • The Government is part of the problem. National and Labour’s preference for letting immigrants in without proper planning and thinking that New Zealanders can cope with the market changes has led to an ad hoc approach with no policy cohesion.

The causes at regional level are reasonably different too.

In Auckland, the major gateway to the country and the face of urban New Zealand to the outside world, land is at a premium. It is viewed by non New Zealanders who are able to take out 1% loans as highly desirable. Anyone who watched the auction on Tuesday night on TV One would have been amazed at the price ($896,000?)for a modest dwelling in Auckland, which could have purchased two decades ago something quite stylish. The problem with new housing estates is that where they go, other development inevitably follows, such as shopping malls, schools and so forth. Whilst the needs of the people living in the new developments has to be taken care of some how, they create planning headaches that the general public do not really understand.

The situation in Christchurch stems from earthquakes in 2010-11 which rendered thousands of people homeless, caused large parts of the Christchurch City Council social housing stock to be written off and rendered significant tracts of land unusable for housing. Although thousands left, nearly all of the many that stayed on had suffered varying degrees of damage by the time the last big tremors occurred. Although the land zoning can be solved, the resource consent planning for several new subdivisions on land to the west and south of the city centre cannot happen fast enough on one hand, but on the other needs to take due time to ensure it is not flawed. The influx of tradespeople from around New Zealand and overseas to help with the rebuild has added further pressure to available housing.

So, lets ask ourselves again, is there a housing crisis in New Zealand?

Yes there is!