KiwiBuild struggling to deliver on housing crisis

KiwiBuild is one of Labour’s most important initiatives. It is supposed to address the ‘housing crisis’, to boost the number of houses needed around the country to accommodate a growing population. And it was initially presented as a way of portraying the Labour-led government as progressive and as compassionate as Michael Joseph Savage’s Labour that kicked off state housing  in the 1930s.

But KiwiBuild has proven to be a problem for Labour.  It is struggling to deliver on Labour’s promises, and the resignation of it’s first head – Head of KiwiBuild wasn’t working, now resigns – won’t help house building progress nor credibility.

The promise (Labour housing policy):

Build 100,000 affordable homes across the country

Labour’s KiwiBuild programme will build 100,000 high quality, affordable homes over 10 years, with 50% of them in Auckland. Standalone houses in Auckland will cost $500,000 to $600,000, with apartments and townhouses under $500,000. Outside Auckland, houses will range from $300,000 to $500,000.

It was always going to crank up the building programme.

The plan (Labour FAQ: KiwiBuild):

KiwiBuild is aiming to build:

  • 1,000 homes in the year to June 2019,
  • 5,000 the year after, 10,000 in the year to June 2020,
  • 12,000 every year after that.

The execution to date – Stuff’s Kiwibuild Tracker:

  • Homes built 33
  • Homes under construction 77

There is a lot required in the next five months to make the June target.

Gareth Kiernan (chief forecaster at economic consultancy Infometrics) at Stuff: Resignation another step to KiwiBuild failure:

Stephen Barclay’s departure as head of the KiwiBuild unit makes it even less likely that the scheme will be able to progress at the rate hoped for by the government.

Even allowing for a slow start, things are falling woefully behind.

Bearing these KiwiBuild targets in mind, having dynamic leadership for the programme seems imperative. Yet the KiwiBuild unit has effectively been without a leader of any sort since early November.

​KiwiBuild is an ill-conceived policy mess that doesn’t understand what is making housing unaffordable, why that unaffordability is a problem and needs government intervention, or even exactly who the policy is trying to assist.

We’re left with small $650,000 houses in Auckland’s outlying suburbs being offered to graduate doctors, or building homes in New Plymouth and Wānaka that are still too expensive to provide a realistic alternative for people wanting to get into the housing market.

Attempting to provide affordable housing while failing to address high land costs and ignoring critical capacity constraints in the construction industry is a recipe for failure.

So will Phil Twyford keep trying to do more of the same? Will Jacinda Ardern stick with Twyford as Minister of Housing? Probably, demoting Twyford would be seen as an open admission of failure, and more importantly, there is hardly a wealth of talent waiting to step up to one of the toughest jobs in Labour’s Cabinet.

KiwiBuild has to find a new head, and Twyford is going to have to show abilities not yet apparent, as well as finding new ways to accelerate the rate of house building.

Whether housing overall is a large problem or a crisis is just political semantics.

Whether KiwiBuild under performance is a large problem or a looming crisis looks like reality.