Are the key causes of housing shortages being addressed?

While the failure of KiwiBuild to live up to hype has been big news I still haven’t seen much said about the key causes of the housing shortage – the lack of available land and the time and cost and difficulty in  making land available due to the dysfunctional RMA.

Even Labour cheerleaader Simon Wilson is on the case.

But he doesn’t mention the RMA at all.

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46 Comments

  1. Mike Mckee

     /  25th January 2019

    No

    Reply
  2. Duker

     /  25th January 2019

    Wilson is a numpty out of his depth
    “We need housing to be cheap and fast” …he wants public transport to be ‘cheap and fast’

    There isnt much in magic thinking that this sorcerors apprentice doesnt spout on about.

    But I must say he has decades of experience to write 600 words without saying much at , a few buzz words , a bit of wishful thinking about ‘high quality’ as you would expect from a lover of the finer things in life.
    And not not ‘quality’ in an older state house way but that other magic word -design.

    Reply
    • Loki

       /  25th January 2019

      I find myself agreeing with Slater on his view of Simon Wilson. Almost.
      Wilson is also sprinkling ruinously expensive trophy trams instead of the much cheaper Puhinui bus interchange model that will move more people faster and cheaper.
      There is plenty of land, it is just locked up in value enhancing rules.

      Reply
      • Duker

         /  25th January 2019

        airports are dead zones for trains- they have found that out in sydney and brisbane.
        the tramline is to serve DOMINION RD, mt roskill intensification and provide better public transport for mangere, but i doubt it will get that far.

        Reply
  3. PartisanZ

     /  25th January 2019

    The Key and Clark causes certainly have not been addressed …

    Neither, for that matter, have the Bolger-Richardson-Shipley nor the Rogered Douglas causes …

    Certainly the RMA has something to do with it. Bluey’s can no doubt blame the Maori Party for blockading RMA reform under National … and still remain Bluer-than-Blue … Your Party ‘turned’ … Why didn’t you?

    But where housing and ‘property in the soil’ is concerned we have lost the plot economically as well – long ago, with effects increasing exponentially – looking for ever-increasing capital gains – the basis of most ‘wealth’ – and allowing, or indeed actively pursuing, the creation of a FIIRE economy …

    One of the most important functions of society, housing it’s people, in Aotearoa New Zealand and the land it sits upon, has become nothing more than another global commodity …

    It’s a modern neoliberal government’s primary task to keep global commodity prices up … Right?

    Reply
  4. David

     /  25th January 2019

    Twyford just doesnt have the skill set to change the causes of overpriced houses, he knows what they are and articulated them often in opposition in his hyperbolic way but as per usual with the left they struggle to get past “lets do this” and actually implement anything.
    Twyford is literally so useless he has resorted to buying houses off the plans and flicking them on at the retail price but having the taxpayer picking up the deadweight cost of the middleman. No one is benefitting from Kiwibuild its so far a net loss with no articulated plan to sort out the planning and supply problems bedevilling the industry.

    Reply
    • Blazer

       /  25th January 2019

      Developer on RNZ this morning ,says its all good…and other developers are adopting a wait and see attitude.

      Reply
    • Duker

       /  25th January 2019

      And national was able to articulate and do anything while in government.?

      The Special housing areas SHA , was a huge success – well at least as far as the Councils go, as over 55K new builds passed the RMA process.
      Yet only a small number of that ended up final construction – because ?

      Well the real answer is a lot of SHA were just a device to increase the value of the land for on-sale , but there wasnt any money around for the development to even start.
      Most of the large land developers either did their own SHA or have their own land and dont need to do an SHA.

      in the end nationals Housing Supremo- Nick Smith , he of the compulsory buying of private land to sell to developers idea , the grabbing of empty land in Auckland for Housing (flopped)

      Reply
  5. David

     /  25th January 2019

    As an example with one of the houses I have for sale at the moment. The buyer wants to put a window in and wants to know the cost: $450 for the window, $700 for the builder, $250 for the painter and get this…$1500 for the draughtsman to submit the plans to council including their application fee of $575 and then the cost if they have to do a site visit.
    Why cant my LBP (licenced building professional) fit the window, take a couple of photo’s and submit a PS3 detailing the work ?

    Reply
    • Blazer

       /  25th January 2019

      I’m sure you’d bear that cost to make…the sale.

      Reply
      • David

         /  25th January 2019

        Nope, said I would facilitate it for her.

        Reply
        • Blazer

           /  25th January 2019

          jeezus a couple of grand in a 450k deal!

          Become an M.P, NZ will get you to negotiate deals for us.

          Joyce,Groser,Bridges and co got owned whenever they tried.

          Reply
    • PartisanZ

       /  25th January 2019

      Because to the regulatory body your LBP is indistinguishable from a Cowboy?

      Because of the chance that, without the regulations, a Cowboy LBP would take a bribe of $500, saving the ‘buyer’ $75 … and submit some doctored photos of shoddy work?

      I don’t know … and I actually agree with you it’s ridiculous …

      Surely there’s some middle-ground?

      Reply
      • David

         /  25th January 2019

        Its quite a process to become an LBP and they need loads of insurance to cover shoddy work and the council do spot checks on their exempted work so folk are pretty careful.
        Ironically I can have an LBP do foundation repairs and pay $640 to the council to “not” get a building permit.

        Reply
    • Duker

       /  25th January 2019

      $450 for the window ?
      Must be tiny
      Just to get two normal sized windows double glazed ( the whole glazed part opened , so it was a complete replacement minus the frame) came to $1300.
      To put a new window in requires the building framing to have a lintel beam, and the glazed window have a frame and a wooden reveal ( or sill) plus inside wall cover the gap to the wall.
      Did you actually get a quote for a new window delivered or was it a guess of $450 or an old window from the reclaim yard?

      Reply
      • Duker

         /  25th January 2019

        This is the regulations for exempt work from a building consent

        https://www.building.govt.nz/assets/Uploads/projects-and-consents/building-work-consent-not-required-guidance.pdf

        Schedule 1 exempt work
        The purpose of Schedule 1: Building work for which building consent
        is not required is to exempt building work that is low-risk from
        requiring a building consent

        page 19
        Existing buildings: additions and alterations
        8. Windows and exterior doorways in existing dwellings and outbuildings

        have you been telling porkies David
        ‘$1500 for the draughtsman to submit the plans to council including their application fee of $575 and then the cost if they have to do a site visit.
        Adding a window in an existing house doesnt require a building consent…. its not even in the category of MAY require a building consent
        Dont rquire draughtsman , or council – its just a standard detail anyway , not like they have to ‘design’ something and at $450 ( supposedly) for the window its pretty smallish

        Reply
        • David

           /  25th January 2019

          Putting in a new window, a small one and I have a mate who owns a window fabricating company, where one wasnt there before you are quoting changing an existing window so you do need a permit.
          Allowing 900 bucks for a draughstman to draw and submit the application is prudent, council want to know the lintel design and the flashing type.

          Why am I even engaging with you, sheesh.

          Reply
          • Blazer

             /  25th January 2019

            this is where your argument falters David..’Allowing 900 bucks for a draughstman to draw and submit the application is prudent,’

            I rule for Duker on this one.

            Reply
          • Duker

             /  25th January 2019

            i have quoted the building regs which show exemptions for a building consent (council approval)
            adding a new window into existing house is EXEMPT.

            Of course the draughtsman isnt going to tell a homeowner that , and pocket the money instead.
            If in doubt just arrange a quick meeting with council consents people, in 2 mins they will tell you EXEMPT

            Reply
  6. Blazer

     /  25th January 2019

    to address the housing crisis effectively….the Govt must be prepared to swallow a re-election poison pill….and the chances of that….are..

    Reply
  7. duperez

     /  25th January 2019

    Is it possible for housing to be cheap? Is it possible for housing to be fast? is it possible for housing to be both cheap and fast?

    Reply
    • Blazer

       /  25th January 2019

      it was in the 1970’s….It is not in the interests of banks,developers,insurance coys,speculators,RE agents,and politicians for it to be so…again.

      Reply
      • artcroft

         /  25th January 2019

        In the 70’s the population wasn’t growing so fast, so housing could keep up.

        Reply
        • Blazer

           /  25th January 2019

          in the 70’s China did not have millions of new millionaires looking to park their…money.

          Reply
        • Duker

           /  25th January 2019

          yes it was , we had both immigration ( from UK mostly ) , the islands, AND the effects of the post war baby boomers marrying early ( most did) and having families.

          Reply
    • David

       /  25th January 2019

      I think a better approach would be one that works really well in Christchurch where house prices have been flat for 4 years is opening up loads of land and having that well serviced with schools and transport links and a ton of mid level houses get built. The main buyers are second time purchasers with a bit of equity and a higher income who can afford well built homes with a few mod cons and when they move they free up more cheaper homes for the FHB.
      In 10 – 20 years time the FHB is now going into those well built mid level houses as entry level housing. You get a better improvement in the housing stock and supply what Kiwis generally want in their homes…bespoke but pretty much the same and a back garden.

      Reply
    • Gezza

       /  25th January 2019

      Doesn’t look like Phil Twyford knows, even after all the time he’s been the go to big talker on housing.

      Total waste of a Ministerial salary. I imagine the only replacement for that Barclay character
      who just quit as head of the Kiwibuild Unit will be someone who knows it’s a hopeless cause but if they can just accept the brickbats & tuff it out for a year or two they’ll be larfing all the way to the bank and can look for a better job then.

      He has to go, dupers. 😡
      Who else have they got? 😳

      Reply
    • PartisanZ

       /  25th January 2019

      It was possible during the 70’s with State Advances & Group Housing … Keith Hay & Reidbuilt Homes

      As I see it, one major problem is the massively raised expectations of Kiwis old & new to live in palatial homes popularized during the successive property booms and housing bubbles of the 90s & 2000s … including, I speculate, a kind of perverse ethnic rivalry of newly arrived Poms & White South Africans with wealthy Asian immigrants …

      Reply
      • David

         /  25th January 2019

        Unfortaunately the building code doesnt really allow for “cheap” houses to be built there are just way to many do, s and dont, s.
        I did a garage conversion and had to put in 2 covered bike parks, handy to have no doubt but what does the government actually want, more affordable housing or have a bureaucrat demand all sorts of extras to be required meaning you have to build more expensive houses for customers who demand these sort of things where as someone might just want a cheap house.

        Reply
        • Duker

           /  25th January 2019

          THere are cheap house designs. mostly along the lines of 3 bedrooms upstairs, downstairs kitchen , lounge, laundry plus a carport.
          You need 2 stories to reduce land area, often they can be a terrace house format.

          flash these days just means internal single garage , heat pump downstairs say 6.5-7.5Kw and maybe a downstairs toilet and an extra bathroom as an ensuite upstairs.

          I dont think that is extravagant. Anyway Twyford has changed the laws so that the government agency does the consents bypassing the council ( who do have some numptys who think they are god)

          Reply
    • Mike Mckee

       /  25th January 2019

      Duperez
      I think so.
      Premade, kit homes fully insulated and plumbed for Electricity, Phone and Water.
      HNZ should have a factory in Hamilton turning out a 20 a week, for shipment to their build teams in the regions.
      It would set the standard for rentals throughout the country.

      Reply
  8. sorethumb

     /  25th January 2019

    Immigration was cited as a cause of high house prices in the early 2000’s but gradually got pushed out the back door. One reason was Hugh Pavletich and his popular urban limits and land supply rationale; the other was anti-racism which defined opposition to immigration as racism because we have globalised immigration policies.

    Reply
  9. Mike Mckee

     /  25th January 2019

    yeah 50,000 migrants is going to help the shortage aren’t they?
    Then the economic migrants posing as refugees will jump the queue ahead of NZ citizens at the low end and the local Govt and HNZ rental market….

    Reply
    • Griff.

       /  25th January 2019

      50,00070,000 migrants.
      700,000 over a decade
      Most come as adults already needing a separate house.
      Add offshore buyers impacting the availability as well and we got the result economics would suggests.
      Council zoning and the RMA has restricted supply adding to the upward pressure of an expanding population .The predictable result is land price inflation .
      As land prices has increased it becomes less economic to build cheaper houses .
      If a section costs $200,00 and a house on it $200,000 you can make a reasonable margin on your investment allowing for risk .
      if the land is $800,000 you need to build a more expensive house to make the same margin on your investment. Hence no spec builder is building 100sq meter boxes for the masses instead they build 250 sq meters large compered to the average housing stock already available. This increasing house size also has the effect of reducing the numbers that can be built by the labor force available.

      To shift the housing market towards affordability we need to .
      Restrict immigration until infrastructure catches up .
      Free up lots of land for development.

      Reply
      • David

         /  25th January 2019

        Couldnt agree more Griff.
        Slight issue with immigration as we struggle to find hotel staff in Queenstown and the applications are getting really hard to put through but the problem down there is literally any accommodation you could put staff into has been used up by AirBnB. Would love to see more Kiwis working there but few want to live 3 to a bedroom and I dont blame them.

        Reply
        • PartisanZ

           /  25th January 2019

          Surely it’s a good sign that young Kiwis don’t want to do menial and demeaning work?

          Might also indicate that their educational qualifications are generally above such drudgery?

          Whad’dya do? Automate or immigrant?

          AirBnB and such like … The Ubers … has a lot to answer for.

          That’s the ‘free market’ for you!

          Reply
          • PartisanZ

             /  25th January 2019

            In a sense we are watching and engaged in another ‘Industrial Revolution’ type of event, where not just jobs but whole ways of life were changed irrevocably … e.g. from agrarian peasant to urban proletariat …

            From urban proletariat to demi-urban* precariat?

            * demi-urban = partial, inferior urban(ity) … new word #204

            Reply
            • Gezza

               /  25th January 2019

              I dunno if it’s that really that much of a change. It’s just the updated version of some folk who want to renting out a room here and there and cutting out the middle man.

              Similar to those folk – often housewives; one of my neighbours does this – who have turned trading on TradeMe into a quite lucrative business, working entirely from home, whenever they want to, if they want to?

              Not for everyone, but the niche is there and certainly being exploited, mostly by younger folk I suspect.

            • PartisanZ

               /  25th January 2019

              Yes, and Second Hand Shops have mostly closed as a result of TradeMe … Backpackers struggle as a result of ‘Freedom Campers’ and Motels struggle because of AirBnB …

              That’s what I mean … The ‘domestication’ of labour where profit motive squeezes away employment creation is a MAJOR CHANGE!

              Its HUGE! It has ramifications for hierarchical organisation structures, which flatten out but also probably have higher central peaks … the IPO [Intellectual Property Owner], CEO & maybe Senior Management …

              ENORMOUS ramifications for shopping … online [mostly from overseas] and delivered to your door …

              … if you have a door …

            • Gezza

               /  25th January 2019

              Yes, and Second Hand Shops have mostly closed as a result of TradeMe … Backpackers struggle as a result of ‘Freedom Campers’ and Motels struggle because of AirBnB …

              3 second hand stores in Tawa; I like to browse them sometimes, pick up an item or two. Mostly good clothing. Two have furniture as well, and nick-nacks and repaired electrical goods, sound systems etc.

              One’s the Salvation Army Family Store. I donate to them if giving away anything still good for use by someone. They’re well organised, have a moving truck, I know their main driver, nice guy, very popular locally.

              The other’s a hospice shop – bit of an Aladdin’s Cave.

              The other is the Red Cross shop.

              There’s a Coin Store – cheap imports – I visit that and buy the odd item there.

              Other gift shops and stores in the village still seem to be thriving. An Australian chain Melon cheap import store opened but didn’t last long, maybe a year.

              What people with items no longer wanted but still good can do with TradeMe, now, is, instead of just advertising in the local paper’s For Sale columns, just put it up on TradeMe, with pics, where they have a wider market & stand to sell an item for more than they might have otherwise got.

              So – individual people have more choice and better options for getting rid of household items they’ve replaced.

              Good second hand furniture is harder to find, admittedly, than it used to be, but on the other hand stores selling cheaper new furniture can make up the shortfall.

              I’m not sure that these other options for individuals to utilise if they want to are necessarily going to displace other jobs completely – new employment, including self-employment options appear – but what I do agree with you about is that the net result seems to be that it will drive wages down (in real terms, over time) in many existing jobs.

      • Pink David

         /  25th January 2019

        “If a section costs $200,00 and a house on it $200,000 you can make a reasonable margin on your investment allowing for risk .
        if the land is $800,000 you need to build a more expensive house to make the same margin on your investment”

        100% correct.

        Reply
        • Duker

           /  25th January 2019

          the land isnt part of the added value of the builder. shouldnt be part of his return.
          Mostly its the new subdivsions that have covenants that ‘require’ a 4 bedroom , 3 garage house, 2 living room house. Yes, this is for upper middle class tastes, and the new migrant buyers who it seems need a separate bedroom/ensuite downstairs as well for grandparents/ adult children when the marry who live at home for a few years before children

          Reply
          • Griff.

             /  25th January 2019

            the land isnt part of the added value of the builder. shouldnt be part of his return.

            It is part of the capital required so represents a cost and a possible liability.
            200,000 land 200,000 build sell for +20% of the build price=40,000 on 400,000 invested is a 10% return
            800,000 plus 200,000 build sell for +20% build price= 40,000 on 1,000,000 invested is a 4% return.
            4% is not worth it as your possible exposure is to great .
            One allows you to take on the risk the other leaves your arse in the crack if it turns sour.

            So instead you would need about a 800,000 build
            800,000 plus 800,000 build with 20% = 160,000 profit to get your 10% return on money invested .

            Basic house @ $2,000 sq for 100 sqm =200,000
            Flash house @ $3,000 sq for 266 sqm – $800,000
            Pretty close to what we see being built now .

            Yes you often get builders terms.
            They still leave the spec builder holding the risk not the property developer .
            I have worked for builders who had not worked this out.
            They all go backrupt eventually when the inevitable down turn happens.

            Reply
  10. Pink David

     /  26th January 2019

    “the land isnt part of the added value of the builder. shouldnt be part of his return.”

    The land is the biggest cost for a small developer, and the largest risk. If they don’t make some return on it, why would they bother with the business?

    Giff has cover it very well.

    Reply

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