Harré on forced selling of housing

Laila Harre was on the Q & A panel last Sunday. She made some extraordinary comments about people being forced to be homeless, and considering forcing people with houses deemed to big for them to sell them.

Susan Wood: Do you think Laila that the Reserve Bank is going where politicians fear to tread around property in New Zealand, and certianly in Auckland?

Laila Harre: Well it’s already indicated it wants to go further than the Government wants it to go and that’s why we see these delays in the introduction of controls on lending to the corporate housing buyers to the so-called investors, but these are very large property portfolios who have had opportunity to increase the size of those portfolios as a result of the LVR restrictions on first home buyers.

I think this problem has become way too complicated for people to connect to.

There’s two basic questions we have to answer.

One is do we think that more people should live in their own houses, as Bernard Hickey frames it?

The second is should there be more serious controls on the rental market in terms of the rents that can be charged, and the security of tenancy?

If we could agree on out answer to those two questions there are endless options for controlling this problem.

The problem is that the Government doesn’t know where it stands on those two issues. It doesn’t know whether it wants more people to live in their own houses. It doesn’t know whether it wants to control the environment for renters.

And we have to answer those two questions before we can get into complicated solutions.

It’s not up to the Government to decide if “people should live in their own houses”, people should be able to choose for themselves whether they rent or own/mortgage a house.

I’ve been in and out of home ownership five times due to personal and financial circumstances. Sometimes I have not been able to afford a house or a mortgage, but I have worked back into a position to be able to buy – at one time with interest rates at 18.5%.

Matthew Hooton: I think we all agree don’t we and I think Olly Newland agrees, Loan to Value Ratios are an appalling mechanism, because they’re the ones that attack people getting into their first home.

Laila Harre: Well…I….I don’t agree with that, I mean the evidence is clear that it has helped to reduce price inflation…

Matthew Hooton: How do we know that?

Laila Harre: Well we know it from the data.

I just want to come back to this obsession with the supply issue, because I think this is a massive red herring in coming up with policy.

We are told by various authorities that there is something between five thousand and thirty thousand shortage of houses in Auckland. Now how can you rely on authorities like that. They cannot agree on whether we have five thousand too few houses, or thirty thousand too few houses, that’s a factor of six. I just don’t buy any of this as being people who understand what the problem is.

Meantime plenty of the people who have the third, fourth, fifth house um for renting out are living in large houses with families who’ve left, and we certainly don’t have a shortage of bedrooms in Auckland.

So you know we’ve got to ask ourselves do we tear up our rural environment to allow people to hang on to large properties in the central city areas without dealing you know with…

Susan Wood: You can’t force people out of their homes, if they don’t want to leave their leafy mansions you can’t force them out…

Laila Harre: Well we have actually Susan, we’ve forced thirty thousand families out of homes. That’s the number of New Zealand families who are officially homeless. So we can force people out of their homes.

We’ve just decided we’re not going to touch those who are in positions of power and influence and have political authority…

Matthew Hooton: …I don’t think it’s politically…I don’t think it’s a likely political position for anyone to take that there would be forced sales of people that own their own homes that were deemed too big for them, I think that would be…

Laila Harre: Oh I don’t know, I could be signed up for something like that…

Matthew Hooton: …I’m not sure, I’m not sure that it would gain more than one or two percent of the vote…

Laila Harre: Well I know all about that too Matthew…

Harre will know about gaining one or two percent of the vote.

It is likely to be something she remains familiar with if she thinks that people should be forced to sell their homes if they exceed a Government dictated quota for number of bedrooms or floor area.