Fundamental flaw in Labour-Green housing policies

Both the Labour and Green parties have now released major housing policies. The cost of home ownership is a big issue.

But I question the focus on getting new home owners into new homes. Most people start by owning more modest homes and then work their way up the housing ladder.

National have acknowledged housing is a significant issue by appointing Nick Smith as new Minister of Housing. Presumably in time they will come out with their own initiatives to try and address the escalating difficulties in becoming a home owner, especially in Auckland.

One obvious approach is to spread population growth to regions with cheaper houses, but lack of regional business and job growth works against that.

Back to the Labour and Green policies. It’s good that both parties have increased focus on housing, it should be debated and possible solutions should be examined – actually, there will never be ‘a solution’, but improvements can and should always be sought.

There have been many compliments and many criticisms of the Labour-Green policies. See blog posts and comments at The Standard and Kiwiblog:

One major flaw stands out for me. The policy focus is on new housing for first home buyers.

New homes are more expensive than old homes, and in the normal market first home buyers usually start with an older chewaper home. Some then trade up to better newer houses when they have sufficient equity and can afford larger mortgages.

With a housing shortage new houses are needed of course. But giving some new home buyers preferential treatment so they can leapfrog the usual climb up the housing ladder could be unfair on many, despite some claims that is ‘fair’ for everyone to have good quality housing.

It isn’t fair for some people to get what amounts to government handouts to get straight into the sort of hiuse that most people have to wait for, save for and work for.

More new housing is needed, especially in the higher growth cities and regions. But maybe housing policy should consider moving home owners up the quality chain rather than leapfrogging some who are lucky to win a government housing jackpot.

1 Comment

  1. Steve W

     /  January 25, 2013

    Any new “housing” should be higher-density housing. Creating more sprawl through stand-along dwellings makes no sense at all. The infrastructure (water / power/ waste / roading, etc..) to service it is the most expensive of all housing options. For people who already can’t afford market rates lumbering them with the most expensive possible rating infrastructure makes no sense at all. It would make a lot more sense to build spacious apartments and ‘row housing’. Cheaper to build per dwelling and cheaper to support into the future. Better for traffic and better for public transport. Cheaper from every angle one cares to look at it.

    I’m tired of people moaning about their high rates when – at the same time – they INSIST on the most expensive residential infrastructure possible.

    If people want cheaper housing at with reasonable access to transport and workplaces…they need to look at attractive higher-density housing options. Otherwise they’re wasting their time.