Twyford on land for Kiwibuild

Labour’s housing spokesperson Phil Tyford was interviewed on The Nation yesterday (repeated this morning). He was questioned about where Labour would get land to build on in Auckland for the 50,000 houses they planned to build under their Kiwibuild policy.

Twyford seemed unprepared for this fairly predictable line of questioning, and was very vague on what land would be available.

  • “many of them around the railway network in Auckland”
  • “on the fringes of the city as well”
  • “if necessary, we will buy private land to develop”

And “We are going to work with the council, we are going to work with Ngati Whatua, we’re going to work with other investors.” Much like the current Government is trying to get land for development.

With the not insignificant matter of the RMA to deal with.

Let’s move on to what your solution is, which is KiwiBuild. You’ve already said that freestanding houses will be 600,000 or less. And where exactly are these 100,000 houses going?

So, Lisa, we don’t have a land shortage in New Zealand. Fewer than 1% of the land is urbanised. We have a highly restrictive planning system that chokes off the supply of new land. Labour’s going to free up those controls and allow cities to grow up and out.

So where specifically? Where specifically? Because as you pointed out, we’re four months from an election. Where’s the list from Labour which shows exactly where the houses go? Like this list from National, which shows me exactly which suburbs and how many houses. Where’s your list?

So, we’re going to build large urban development projects, many of them around the railway network in Auckland. So places like Henderson, Manukau, Mt Wellington, Onehunga, Panmure, Avondale.

Have you got the sites specifically identified?

Actually, Auckland Council’s already done much of the work on this. Their development agency, Panuku, has already identified all of those sites as being appropriate for development. Lisa, we’re also going to developments on the fringes of the city as well.

Amy Adams says that they are using, in this plan, basically all the available Crown land, so I’m struggling to understand where your land is that you’re going to build 100,000 houses on and why I haven’t yet seen… Because this policy of yours is, what, four and a half years old?

So here’s where Labour’s approach is different from National. National lacks ambition in this area. Their approach is confined to knocking down state houses and building private houses on that land. We are going to take a much broader, more productive approach, so—

So have you got a list of lots, of land lots, that you can give to us so we can have a look at it? Have you got that?

We are going to work with the council, we are going to work with Ngati Whatua, we’re going to work with other investors. And if necessary, we will buy private land to develop.

Okay, and what budget are you putting aside for that?

We’ve committed $2 billion to kick-start KiwiBuild, and we’re going to establish an affordable housing authority that will act as an urban development agency.
So that $2 billion of seeding money, are you telling us that that’s going to pay for the first wave of houses and all the commercially bought land that you’re going to have to buy?

Well, we haven’t identified exactly how much land we will buy, but we are going to establish an affordable housing authority—

Isn’t that the problem, Mr Twyford? Isn’t that the problem, though — the details?
Hang on, Lisa, you’ve asked me a question. Let me answer and I will give you an answer. We’re establishing an affordable housing authority that will cut through the red tape. We’ll put capital in to get it started, but it’s going to manage the Crown’s entire urban land holdings. It will use that balance sheet to buy land and develop land with other partners. So it’s a very different approach to what the government is saying.

Who will build all the houses?

So, who is going to build your 10,000 houses a year? Because we know that there’s a shortage of workers in the construction industry. So who’s going to build these?

So, call us old-fashioned, but we think it’s the job of the government to grow a New Zealand workforce of skilled tradespeople. So we’re going to massively increase the training for the construction trades and professions. That’s our priority. Now, the fact that National—

That takes time, doesn’t it? And you are aiming to build 10,000 houses a year. The apprenticeship industry tells us that we need 60,000 new workers over the next five years, and half of them need to be tradies. So come December 24th, who’s— September 24th, who’s building these houses?

Look, so National has completely failed to build the New Zealand workforce. They haven’t invested in the apprentices and the professions to do this work. Now, if we have to, we will rely on skilled tradespeople. We’ll bring in electricians, plumbers and carpenters from overseas if we have to.

Despite your policy of tightening up immigration.

Well, Lisa, the reason it’s called an immigration policy is we get to choose who comes here. So we will choose the electricians, the plumbers and the carpenters instead of bringing people to this country to flip burgers and pump gas.

Andrew Little has said Labour would cut immigration by “tens of thousands” and at one stage intimated by up to 50,000 a year.

I would have thought on two of the key issues Labour is pushing for this election campaign they would have things worked out better than this by now.

Newshub: Interview: Phil Twyford

Full transcript: The Nation: Lisa Owen interviews Phil Twyford

The Nation: Twyford on housing

This morning on The Nation:

talks to about National’s plan to build houses in Auckland… is it enough?

I hope he is asked what land Labour plans to build their 50,000 houses on.

Twyford says if home buyers need a govt subsidy to buy a $650,000 house it’s not affordable.

Going about ‘affordable’ new houses. Most first home buyers don’t buy new houses, they start with older cheaper houses.

Twyford says Labour will build large developments around the railway line – he says Akl Council has identified good sites.

Twyford says a Labour govt will buy private land if necessary to build houses on.

Pushed on what land they will use Twyford evades and avoids and says they will work with the council and Maori. So no specific land yet.

Twyford says Labour will bring in highly skilled electricians, carpenters and plumbers to build Kiwibuild houses if they have to.

There is already a building labour shortage. If Labour’s houses are additional to the building al.ready under way and under pressure they will need to hugely increase the workforce.

The Nation: Interview: Phil Twyford

 

ACT on ‘Labour-lite’ housing policy

Yesterday the Government announced plans to build about 25,000 extra houses in Auckland over the next ten years – see National’s Auckland housing policy.

This looked a lot like a partial Labour ‘Kiwibuild’ policy. Despite this Labour MPs slammed it.

Andrew Little belittled the policy:

Breaking news – National admits there’s a housing crisis

National finally admits there’s a housing crisis, but today’s belated announcement is simply not a credible response to the problem it’s been in denial about for so long, says Leader of the Opposition Andrew Little.

“National can’t now credibly claim to be tackling the housing crisis four months out from the election when, for nine years, they’ve ignored the plight of first home buyers and families in need.

“This Government has long rubbished the idea of building houses. Time and again it’s failed to deliver any significant increase in housing supply.

“National cannot be trusted to do anything meaningful for the thousands of first home buyers in Auckland who have been denied their shot at the Kiwi dream.

“Amy Adams has fudged the figures. How many of these houses will actually be affordable? What does ‘affordable’ mean? How will that give hope to first home buyers when speculators can buy these houses too?

“It’s just more smoke and mirrors from a Government that’s failed miserably. It’s a mish-mash of old and new housing programmes. Many of these houses have already been announced.

“Auckland currently has a shortfall of 40,000 houses and growing. This plan won’t address the shortfall, let alone build the extra houses needed to keep up with demand.

“This last minute announcement just won’t do enough. National has had its chance. It’s time for a fresh approach.

“Labour will build 50,000 houses in Auckland people can afford to buy and we’ll increase the supply of state houses; we’ll crack down on speculators; and we’ll invest in warm, dry homes.

“National hasn’t a shred of credibility left. The evidence keeps mounting:

• It promised a big increase in emergency housing beds in the last six months, and hasn’t delivered.
• It’s Special Housing Areas promised an extra 39,000 homes, fewer than 2,000 have been built.
• Housing New Zealand has failed meet its building targets and reduced the number of state houses by 2,500.

“This cynical announcement by National should be seen for what it is – an election year fudge to paper over the cracks of its failure in housing. It’s time for Labour’s plan,” says Andrew Little.

However it was ACT’s David Seymour who went into detail with his criticism.

National need to think bigger than Labour-lite

National needs to do more than just adopt tunnel-vision Labour policies, says ACT Leader David Seymour.

“If the goal is to close the housing shortfall, this is a step in the right direction, but it won’t be enough. The proposal will add 25,000 homes when what we need is another 500,000.

“We can only achieve this by fixing the underlying problem: that regulations and infrastructure pressures prevent private developers from building homes.

“The Government will have to loosen up land use rules if it wants to get 34,000 homes built on a few scraps of Crown land. Why not just follow ACT’s plan to replace the Resource Management Act for the whole city, letting private developers do the building for us?

“The Government will also struggle to build houses at an affordable cost under current construction regulations. ACT has a policy for this: we’d replace construction red tape with an insurance requirement, letting developers cut costs in risk-free ways.

“The other problem the Government will face is pressure on infrastructure. Fortunately, ACT has a plan for this too. ACT will allow Councils to use half of the GST from construction projects to fund local infrastructure.

“The Government is right to say we need more homes. But if we want to see these homes built on anywhere near the scale required, we’ll need a stronger ACT to make the government enact substantial reform, instead of Labour-lite tinkering.”

National has failed in it’s attempt to substantially reform the RMA this term and even if they get the chance and try again next term that would talk some time, they would probably need the support of NZ First or Labour, and in the meantime Auckland’s (and New Zealand’s) housing shortage will get worse unless a lot more houses and flats are built.

National’s Auckland housing policy

The Government 9alias the National Party) announced housing policy today to address the severe shortage of housing in Auckland.

They say they have been planning and preparing this for two years but the timing looks a bit cynical, not just because it is election year, but also being soon after Labour announced housing policy at their Congress.

And Labour MPs are all over Twitter claiming National has stolen their policy but it is too late, too little and not good enough.

Govt to build 34,000 new houses for Auckland

For and against Labour’s housing policies

Andrew Little announced a range of policies trying to address housing issues at Labour’s Congress yesterday.

NZ Herald: Labour to end tax breaks for landlords and property investors

He said Labour will:

  • Ring-fence losses on rental properties so they can no longer be used for tax breaks on other income. It will mean losses can only be applied to income from housing.
  • Use the estimated $150 million in increased taxes for $2000 grants toward insulation and heating.
  • Negative gearing will be phased out over five years.

The tax breaks benefited property speculators and those on high incomes and were heavily used by foreign buyers.

“This will create a level playing field for home buyers and help families get a fair shot at buying a place of their own.”

He said both the International Monetary Fund and the Reserve Bank had recommended removing the tax breaks.

Last year, the IMF said ringfencing tax losses on housing investments would weaken a significant price driver in real estate.

Little said the so-called “mum-and-dad” investors who had a rental property as a retirement investment were not the target of his policy, but admitted some could be affected.

“The vast majority of them don’t use this loophole. Those that do will have time to adjust.

This policy is about the big speculators who purchase property after property. It’s about those big-time speculators who are taking tens of thousands of dollars a year in taxpayer subsidies as they hoover up house after house.”

He said it was indefensible to hand out tax breaks that were effectively subsidies to property speculators when many couples were struggling to buy their first home.

But not surprisingly there are some critics.

NZ Herald: Labour Party’s focus on tax breaks ‘cynical’

Steven Joyce…

…said removing the tax breaks for property investors would not have the effect Labour claimed – and would hit mum and dad investors more than Little believed.

He said Little’s claim few small-time investors used it was “pulled out of the proverbial”, saying negative gearing was used for all loss-making investments – not just residential property.

He said tax working groups under Labour and National had concluded getting rid of negative gearing was unlikely to result in more housing supply and the most likely impact was higher rents. “You’ll end up with fewer houses being built and higher rents.”

He said countries which had ring-fenced housing losses still suffered fluctuations in house prices.

Property Institute chief executive Ashley Church…

…said it was a cynical move designed to set one section of New Zealand society against another and a “direct attack” on those who bought an investment property as a nest egg for retirement.

He said it could also result in fewer rental properties – and higher rents as landlords tried to claw back the losses.

“Your typical property investors are average mums and dads – not wealthy cigar-smoking fat cats.

“This move would certainly stop them investing, but in the process it would quickly lead to a shortage in rental housing which would fall back on the Government – so it would end up costing the taxpayer a lot more in the long run.”

Church also disputed Little’s claim it would even things up for first-home buyers, saying families were being closed out of the housing market by high loan-to-value ratios, not investors.

Andrew King, executive officer of the NZ Property Investors’ Federation…

…said the advantage the tax breaks gave to investors was over-exaggerated. He estimated that removing the ability to claim losses for rental property providers would increase the cost of providing the average home from $6184 a year to $10,293 – an increase of $79 per week.

That sounds significant to me, especially if part or all of that $79 cost per week as added to rentals.

The biggest potential problems seem to be:

  • If property investment costs are increased then rents will increase
  • If property investment is less attractive less houses will be built to rent so less will be available, which will put pressure on the cost of renting
  • If property prices remain at their current very high levels then poorer people will still be unable to but their own home.

ACT response to Labour’s housing policy

David Seymour has responded to Labour’s housing policy.

Labour puts Envy Politics over Economics

“The Labour Party’s policy of ring fencing and negative gearing will only pass costs onto renters in a tight market,” says ACT leader David Seymour.

“As renters well know, the rental market is a tight one, it is a landlord’s market.  Renters have few options, so landlords can pass costs on to tenants easily.

“Labour’s policy is unbelieveably stupid, because it pushes up costs without generating more homes. It is a recipe for rent hikes, putting the most vulnerable out on the streets.

“Unfortunately the Labour Party is still driven by envy first and economics second, it is highly disappointing.

“The only way to improve conditions for renters to increase the overall supply of housing, creating a renter’s market where it is the renters who have the options.

“ACT advocates serious policy reform that would do just that. Replace the RMA in cities, and fund infrastructure by giving councils half the GST on construction that they consent. This policy would get homes built and improve tenant’s options, whereas Labour’s policy will only price more people out of the market as landlords pass costs on to them.

What are we resisting?

Is there revolution brewing in New Zealand? If so, what are we resisting?

Jonathan Milne writes: Vive la resistance! Now to decide what we’re resisting.

As a country what New Zealand may be resisting most is much interest in politics.

After the surprise conservative uprisings that were the UK’s Brexit vote and the US election of Donald Trump, it is easy to look for a grand sweep of history to explain Le Pen’s rise. Will that same broom sweep through the UK general election next month, we ask, through Germany in September, through New Zealand the same month?

The last post The ‘Meh’ election? started off as a reference to this but grew legs of it’s own, I think we are different to elsewhere.

Drawing such a line in the dust, though, is a lazy attempt to avoid looking closely into the challenges facing our own communities. It’s easier to blame history for a rise of fear and loathing than to take responsibility for what is happening close to home.

Brexit and Trump and Le Pen are not the bastard offspring of Russian hackers and alt-Right hate merchants. They spring out of genuine unhappiness within large tracts of their nation’s populations, a belief that others were prospering at their expense. In France this week this can be discerned in an ugly combination of moderately high unemployment, terror attacks, and a fearful instinct to blame immigrants for both.

So in New Zealand, are we listening to our own neighbours? Or are we only listening to friends with whom we agree, our mutually-reinforcing opinions rising to the top of each other’s Facebook feeds?

Those of us with an interest in politics look for people who are willing to talk about it, but probably the vast majority of Kiwis choose to ignore most politics most of the time.

Like France, New Zealand has a widening rift. In this country, it is between those with homes and those without.

I don’t see a lot of similarity between us and France politically or socially.

Our housing crisis is creating an underclass: poorer, often young, more reliant on the social media purveyors of fake news in forming their opinions.

The French may blame foreigners for terrorism; in New Zealand we like to blame them for our housing crisis.

That’s true to an extent. And politicians in particular like to lay blame, usually on each other. But sometimes they pick scapegoats to campaign on. Immigrants, who some see as virtual foreigners, are easy targets for politicians wanting to pander to those who may be intolerant of people who are “not like us”.

The more fearful and paranoid we become of outsiders – whether that be Asian immigrants, Russian power-brokers or Trump’s alt-Right backers – the more we are distracted from responsibility for solving our own problems.

That’s a good point.

Our biggest problems in New Zealand – like violence and alcohol abuse and P abuse and related crime, and mental health that is related to both crime and drug abuse – our our own problems.

Even then some try to blame these problems on others amongst us, like Maori, or men.

We also have an obvious housing problem – simply put, we aren’t building enough houses for a growing population. But this is a self inflicted problem too. We choose how many immigrants come here, we choose how difficult it is to subdivide. And more Kiwis than usual choose not to go overseas or choose to return home.

We need to solve our own problems without creating other problems out of nothing but a stoking of intolerance.

Perhaps in New Zealand we need to revolt against our own way of thinking, of blaming rather than fixing.

Housing equation = increasing problem

According to Nick Smith about 30,000 houses are being built a year at the moment, up from 13,000 a year when he became Minister of Housing in 2013.

From Stuff: Nick Smith reflects on ‘small reduction in responsibilities’ after cabinet reshuffle

“There’s no question housing was under pressure because our population is growing strongly.

“I’m proud of my record in that when I became minister across the country we were building about 13,000 homes a year, we’re now building about 30,000 homes a year.

“And I’ve had my work cut out in getting the growth in house construction to match the strong population growth.”

According to Stats NZ and my calculations the population is currently increasing by about 145,000 per year:

New Zealand’s population is estimated to increase by one person every 3 minutes and 37 seconds.

According to NZ Population and Stats NZ the approximate population increases since Smith became Minister of Housing are:

  • 2013 – 50k
  • 2014 – 79k
  • 2015 – 92k
  • 2016 – 99k
  • 2017 – 145k

So in 2013 we were building 13k houses for about 50k more people, and now we’re building about 30k houses for a 145k increase.

That equates to 1 house per 3.84 people in 2013.

And Stats NZ say

In 2013, the average household size in New Zealand was 2.7 people per household, the same as in 2006.

That suggests a problem in 2013.

Now it’s 1 house per 4.83 people.

That suggests an increasing problem. Note though that “Stat NZ forecasts are based on recent trends and do not necessarily reflect actual population change”.

But even at last year’s increase of 99K  which at 30k houses is 3.3 people per house.

There’s other factors and possibilities – new households might be much bigger than average – but the housing situation doesn’t look like improving, in fact we are more likely to be slipping further behind.

 

More housing responsibilities for Adams

Nick Smith has been probably the poorest public performer in Government over the last few years. He has had to try to deal with the difficult housing issues in Auckland, but has often done that badly.

Amy Adams has been one of the best performers. She has been gradually taken over housing responsibilities from Smith, who remains as Minister for the Environment and just one housing responsibility, Building and Construction.

In comparison Adams has a long portfolio list:

  • Minister of Justice
  • Minister for Courts
  • Minister for Social Housing
  • Minister Responsible for Housing New Zealand Corporation
  • Minister Responsible for Social Investment
  • Associate Minister of Finance

Two of those are directly involved with housing, but Social Investment and Finance have close relationships with Government housing.

Isaac Davidson at NZH: Adams rises, Smith falls in Cabinet reshuffle

Bill English’s reshuffle marks another rise in the ranks for National’s quiet star Amy Adams.

It is also a demotion for Nick Smith, who has now been distanced from any responsibility for the Government’s house-building programme.

English today denied any suggestion of a demotion for Smith, saying reporters “should not read into it”.

But his appointment of Adams appears to recognise that National is bracing for an election-year fight on housing and that Smith wasn’t fit to lead it.

Adams was already responsible for social housing, emergency housing, and Housing New Zealand. She has now been given control over the National-led Government’s plans to build tens of thousands of homes in the next decade.

There are tentative signs that Smith’s various initiatives to lift supply in Auckland are gaining some traction. And as English keeps repeating, the problem is not money but space – something which Government has limited control over.

But it is clear that Smith had lost the public argument on housing affordability.

Adams is a highly capable, confident minister, and perhaps most importantly a good communicator.

English is now trusting her with a huge workload. On top of her housing roles, she maintains the large justice portfolio, and is also responsible for the newly created social investment agency.

Adams has five months to do what Smith couldn’t and at least give the impression that National has the situation under control.

Housing is going to be one of the big issues this election after house prices have gone mad, especially in Auckland but increasingly elsewhere in the country.

People who already own homes may like the increase in value, but those who don’t will see home ownership as an increasingly difficult goal (if that’s what they want, some people are happy to rent).

Adams has little time to fix housing, but if she doesn’t appear as cranky as Smith she will at least give better appearances of competence.

Labour now oppose treaty settlement

Labour had initially supported a Bill that would release a public reserve in Auckland for housing and would also help settle a Treaty of Waitangi claim. But they are now opposing it, to the disappointment of Auckland.

It makes things awkward for Labour’s Maori MPs – Andrew Little recently claimed “Māori will be better served by a strong Labour Māori voice”.

Phil Twyford on Twitter today:

NZ Herald: Pt England reserve housing development opposed by Labour as ‘land grab’

When Labour supported the enabling legislation at its first reading in December its Tamaki Makaurau MP Peeni Henare said he was “extremely excited” about the opportunity for Ngati Paoa.

And Labour’s Kelston MP Carmel Sepuloni said the party supported the bill because “we will support any piece of legislation that is going to be about building more affordable homes in Auckland”.

“It does not make sense to use prime land for grazing cows when it could be used for affordable housing,” Sepuloni said.

However, in a press release today Twyford said the legislation was a “land grab” that flew in the face of the local community’s wishes.

“The Minister seems to think because some of the land has cows grazing on it, it’s fair game to take it for housing. The community needs this land for future generations. Once it is sold for housing it will be permanently lost to the public.”

Does anyone in Labour communicate?

Labour’s opposition has disappointed Ngati Paoa, who said without the land there would be no Treaty settlement between it and the Crown.

“By opposing the legislation Labour is opposing a Treaty settlement bill – for the first time in the history of the Treaty settlement process,” said Hauauru Rawiri, chief executive of Ngati Paoa Iwi Trust.

“All other iwi in Tamaki Makaurau support this transfer. Opposing the Bill pits the Labour Party against mana whenua of Auckland.”

Rawiri said he urged Labour’s Maori MPs to lobby colleagues on the issue and vote against their party if necessary.

That’s the Labour Maori MPs that Little was talking about in this press release on the Labour Party website:

“If Māori want to see progress on the problems they face in housing, health and education, then they should back their Labour candidate.

“We have a plan to turn the position of Māori around and we’ll be running a campaign to show how Māori will be better served by a strong Labour Māori voice around the Cabinet table.”

Who’s running Labour, Little or Twyford?

Will the Labour Maori MPs back the Auckland Iwi?

Twyford is leading Labour’s election campaign in Auckland. This puts party support at risk in Auckland electorates as well as Maori electorates.