Nation – Solving the housing ‘crisis’

This morning on Newshub Nation:

Can the Government’s big ideas really solve the country’s housing crisis? We talk to housing strategist Leonie Freeman and Alan Johnson from the Salvation Army.

Alan Johnson from the Salvation Army:

Kiwibuild is going to benefit the young middle class, not the people he deals with everyday.

The Government is being unrealistic thinking they can reach Kiwibuild goals with very little subsidy


Twyford under pressure on Kiwibuild policy of straw

Labour campaigned on a bold policy to build 100,000 new ‘affordable’ houses in ten years. Phil Twyford was prominent in promoting the policy and slamming the then National led government for it’s poor record on housing.

But Twyford has hit some speed bumps, with chimneys falling off Labour’s grand plans.

Twyford has been found wanting on detail over affordability and pricing of Kiwibuild houses, and it now seems that the Government won’t necessarily build all those houses promised – they will buy from existing housing stock, developments and off plans.  This may allow them to claim numbers, but it will reduce privately built and owned houses.

There has always been questions about how affordable Kiwibuild houses might be. How does half a million dollars for a one bedroom apartment  sound?

NZH: Larger Kiwibuild homes will cost $50k more than promised during election campaign

The Government has hiked the price of larger houses in its flagship building programme by $50,000.

Labour’s election promise to build 100,000 affordable houses in 10 years included prices of between $500,000 and $600,000 for standalone homes and a cap of $500,000 for apartments.

Tender documents sent out to developers on Tuesday show that new homes built under the Kiwibuild programme would now be priced according to how many bedrooms they had.

One-bedroom properties would be sold for $500,000, two-bedroom for $600,000 and three-bedroom for $650,000.

That meant the larger houses were $50,000 more than Labour promised during the election.

A spokeswoman for Twyford said that was because the modelling on the prices had been done two years ago and had now been updated.

Will prices be updates again when the houses are actually built?

Newshub: Housing Minister apologises for ‘confusion’ on price of KiwiBuild homes

Housing Minister Phil Twyford has apologised for a mistake he made about the price of a KiwiBuild home.

On Friday morning on The AM Show, Mr Twyford said the price of a one-bedroom Kiwibuild home would be $550,000.

Mr Twyford now admits he was wrong.

“I misspoke this morning when discussing the KiwiBuild price points. I apologise for any confusion caused,” he said in a statement to Newshub.

“Yeah, it’s gone up slightly. We did the original modelling for those price points two years ago, and under Judith’s [Collins, National housing spokeswoman] Government’s policies, build costs are rampant,” Mr Twyford told The AM Show.


And KiwiBuild seems to have also become KiwiBeg and KiwiBuy.

The Government has also been under fire from the Opposition over its plans to buy homes currently under development in order to reach its ambitious KiwiBuild targets. Documentation on the scheme now says it “aims to facilitate the delivery of 100,000 affordable dwellings”, rather than just build.

“By underwriting or buying affordable KiwiBuild homes off the plan, what we do is we de-risk and speed up developments that otherwise might not take place at all.”

It is also likely to take over private developments, simply moving numbers from private to public and not increasing housing stock as much as promised.

Duncan Garner calls it “a total hoax”r: If Twyford can’t Phil us in on KiwiBuy/Build, who can?

Seriously, what has Labour and its MPs been doing these last nine years? Eating their lunch? We’d been led to believe its flagship Kiwibuild idea was this amazing, smart and innovative housing policy. We’d been told it was an answer to the housing crisis for those who couldn’t get into their first home.

And I assumed KiwiBuild meant just that;  as Housing Minister Phil Twyford said, 100,000 homes would be built.

Now we learn, um no, that’s not the case. It’s Kiwibuy, that house, your house, any house will do.

Labour has simply thrown its arms up in the air and put up a classified advertisement the size of a house that calls for all houses to be bought and sold as Kiwibuild dwellings. Labour wants the biggest shortcut to success possible.

It wants to buy current homes under construction or off the plans and call them Kiwibuild’s own. It’s a total hoax.

And what, Labour suddenly wants to partner up with the private sector? How convenient.

What happened to development on a genuine scale and with true Government buying power.

To me, it looks like Labour and Twyford have made this all up on the back of a moving envelope. It is underwhelming nonsense from a party that looks bewildered and blinded by the size of the challenge. It lacks detail.


Labour now thinks motels for emergency housing ok

Now they are facing the realities of housing shortages in Government Jacinda Ardern and Phil Twyford have switched to supporting the use of motels for emergency housing.

RNZ: Govt’s use of motels ‘morally irresponsible’ – housing advocate

The government has announced it will spend $100 million to try to tackle homelessness and provide emergency housing.

That is badly needed to try to alleviate a dire housing situation.

Prime Minister Jacinda Ardern said it would be irresponsible to not make use of motels and hotels because there was so much immediate need.

“That remains a very quick option and, in the time we had available, still remains on the table but of course there a number of other options we favour over that,” she said.

Housing Minister Phil Twyford said of the 1500 extra housing places the government was delivering, 115 were long term motel stays.

They allowed for flexibilty if there was a spike in homelessness, particularly with winter approaching, he said,

“No one likes the idea of the government spending money to put people up in hotels but if we have to do that in order to ensure people have a roof over their heads we will,” he said.

Sounds fair enough and quite sensible. But it is a change of view since switching from Opposition to Government.

Stuff last October: Emergency motel stays starting to decline, but still cost govt $97k a day

New figures from the Ministry of Social Development show that in the last three months $8.96 million was given out to cover short seven-day motel stays for families or individuals in dire need. The money made up 9159 grants and several families claimed the grant more than once.

This is a drop on the previous three-month period of April-June when a record $12.6m was spent on 11,446 grants.

Outgoing social housing minister Amy Adams said the numbers had peaked mid-year.

“While we’ve spent a lot in the last quarter we’re also seeing that that has peaked now, and there are some really pretty good signs that that is dropping, which is exactly what we expected,” Adams said in July.

“This is exactly what we wanted to happen but it takes time to build 1400-odd transitional houses, and the motel grants have been a way for us to bridge that.”

House building does take time, especially the finding of suitable land and getting consents, and also given the dire shortage of housing in Auckland in particular and the shortage of builders and tradespeople.

Labour’s Phil Twyford, likely to be Housing Minister by the end of the week, could not be reached for comment.


Further back, a statement from Twyford in July: English out of touch on homelessness

Bill English’s comments that he doesn’t know why people are complaining about the blowout in the number of homeless families the government is putting up in motels just shows how tired and out of touch National is after nine years, says Labour’s Housing spokesperson Phil Twyford.

“New Zealanders are rightly outraged that National is selling off state houses while spending $50m a year dumping families in need in motels. They’re stunned that National is so out of touch they thought they would be spending just $2m a year on motel rooms, when the problem is 25 times that size.

“New Zealanders know that every family needs a home, a permanent roof over their heads. Shunting kids from motel to motel, week to week, is no solution.

“Labour will stop National’s state house sell-off and stop sucking profits out of Housing New Zealand. We’ll build thousands of state houses for families in need, alongside our KiwiBuild programme to build good starter homes for first home buyers.

“Last week, we learned that New Zealand has the worst homeless rate in the developed world, and National’s response was to quibble about definitions. They have no ideas, no solutions, just excuses.

“National’s legacy is the worst housing crisis in the world. It’s time for Labour’s fresh approach to make sure that every Kiwi has a decent place to live,” says Phil Twyford.

The ‘fresh approach’ looks like more of the same.

Ardern in April last year: Motel buy-up bad policy

Labour leader Jacinda Ardern says National continues to underestimate the size of the housing crisis.

“After particularly the likes of Te Puea Marae and the amazing work they did last winter, we thought the government would be more prepared, unfortunately they haven’t been and now we’re in a situation of buying hotels. I accept that we want to do everything we can to house people, make sure they’re warm, dry have a roof over their head but it makes much more sense for us to have permanent state housing and social housing rather than paying private moteliers a lot of money,” she says.

Now winter is looming and there still aren’t enough houses Twyford and Ardern are biting the motel bullet.

And now, as well as conceding that motels are necessary to fill housing gaps, a novel approach – Govt appeals to public to identify rentals, marae and land which can be used for homeless

The Government is appealing to the public to provide houses and land to help solve New Zealand’s homeless problem.

It promised today to invest $100m into tackling homelessness, by increasing short-term and long-term housing options and increasing funding for social services.

Rehousing people from the street or temporary housing has been complicated by the lack of available or affordable housing, especially in Auckland.

That led the previous Government to start renting motels to house the homeless. Labour criticised this at the time but admitted today that it needed motels until more homes were available, and has put aside $8m for this purpose.

After announcing the funding today, Housing Minister Phil Twyford pleaded with the public to identify properties that could be used for emergency shelters or pop-up homes.

“We can’t do this alone,” Twyford said. “If you know of properties that might be available over winter, such as seasonal worker accommodation or private rental homes, we’d like to hear about those.

“We’d also like to identify small land options suitable for temporary housing with power and water connections ready to go, such as marae and private land.”

Property owners would be paid market rents, he said; they were not expected to simply donate properties.

“If there’s a massive surge over winter, we need to have those other options in our back pocket.

There was never going to be a quick fix to the housing shortages.

Flaws in land management report need to be rectified quickly

A report on management of New Zealand land was released by the Ministry for the Environment and Statistics New Zealand, with admissions it lacked data and the data used was six years old. It is important to have a good plan for land use and environmental protection.

ODT editorial: Insights into the environment

The “Our land 2018” report, released by the Ministry for the Environment and Statistics New Zealand this week, confirms the need for more action to improve land management.

Environment Minister David Parker says he is particularly troubled by how much  urban growth is occurring in irreplaceable highly productive land. Even in a country as lucky as New Zealand there are only limited qualities of these high-class soils.

The report identifies New Zealand is losing some of its most productive land to houses. Agriculture is under pressure from the loss of highly productive and versatile land due to urbanisation.

There has been a 7% reduction in land used for agriculture, meaning land and soil is lost to urban subdivisions, forestry and lifestyle blocks. Mr Parker is taking steps to address issues such as the loss of prime market gardening land around Pukekohe, as Auckland expands, as well as the impact of lifestyle blocks on the most productive land.

He recognises the need to ensure there is enough land to build the houses people need while noting the need for protecting the most productive areas of the country.

It was natural for towns and cities to be established and grow near productive land, but as the population grows it puts pressure on the best land. This is a major issue in Auckland, and it has been a problem in Dunedin where marginal land on the fringes of the city has been zoned against housing but productive flat land on the Taieri plain has been increasingly subdivided.

Federated Farmers is disappointed with much of the report, saying the data is six years out of date. The report lacks significant data and admits this multiple times. One of the factors highlighted by scientists is the shocking lack of rural waste data. Better records and tracking of waste disposal is a key to understanding the risks waterways, soil, air and towns face — especially in an expanding industry known for generating important volumes of non-natural waste.

Parker needs to ensure that more research is done and more data is collated.

The report finds New Zealand loses about 192 million tonnes of soil each year to erosion, of which 84 million is from pasture land. The high volume of soil being swept into the waterways is choking aquatic life.

The Government, farmers and others with an interest in land have a role to play in better managing erosion-prone land. Much of the response to the report comes from environmental agencies firmly opposed to farming. However, farmers are not the only ones with a stake in the environment.

If, as predicted, we get more and heavier rain events erosion will be an ongoing challenge. There are many hilly areas prone to erosion. A lot of land has been cleared of erosion protective forest.

The report also confirms the continued loss of New Zealand’s limited wetlands which contain some of the most precious biodiversity and filter contaminants from the land. More must be done to protect these.

A lot of wetlands have been drained and converted into pasture – and housing, like the flood prone South Dunedin flat – since European immigration began.

Mr Parker has taken note of the report, and its shortcomings. He understands the need to have balance in the environment and has asked officials to start work on a National Policy Statement for versatile land and high-class soils. His contribution is important.

The effort of the Government in publishing this report, and the strong self-criticism implied in its findings, should be applauded. Further reports of this character will be needed to get better insights into how New Zealand manages its land and resources.

It is a bit alarming that the report has such poor data to work with. That’s the fault of past governments. Parker now has the opportunity to put this right – but with the rush to built a lot more houses he may have to act quickly.

Q&A: Twyford and housing

Labour campaigned strongly agaisnt the national government over it’s poor handling of growing housing problems. They have promised big (100,00o new houses in 10 years), but are yet to look like delivering.

Today on Q&A: Can Labour fix our housing problems?

Housing and Urban Development Minister Phil Twyford is Corin’s lead interview. He has ambitious plans to make housing affordable again – can he deliver?

Twyford was mostly vague about progress, saying the government is working on things and yet to decide on many aspects of the house building project.

He couldn’t give specifics on how windfall profits of those who draw new houses from the ballot will be treated – potentially those who win the housing lottery could gain hundreds of thousands of equity. Twyford said that eventually the increased housing supply would rectify it. There is no guarantee of that, far from it.

Twyford said there will be no means testing – I think that referred to people who are well off (high earners or with family financial support) will not be excluded from entering the ballots.

They must means test any house purchaser in respect of being able to afford to service their mortgage.

It will take a year or two to see whether sufficient progress is being made.

Poll: most important problems facing New Zealand

A Roy Morgan poll on most important general issues facing New Zealand compared to the world shows that economic issues, inequality and housing are of most concern.

Most Important Problems Facing New Zealand and the World - February 2018

And the most important specific New Zealand issues compared to the world.

It’s not surprising to see economic issues so high, including inequality, and in New Zealand housing is also of major concern.

Interesting to see that New Zealand is significantly less concerned about environmental issues.

Perhaps this is why the Greens are so keen on advocating on social issues.

Source: Economic Issues dominate New Zealand concerns early in 2018


Homelessness “is much worse than previously thought”

NZH seems to have got a report that is to be released this morning in advance – Homeless crisis: 80% to 90% of homeless people turned away from emergency housing

New Zealand’s homelessness crisis is much worse than previously thought, as a new report identifies a hidden homeless population that is not officially monitored by government agencies.

More than 80 per cent of all homeless people turning up to community emergency housing providers in the last year were turned away because the system is bursting at the seams, according to an independent housing stocktake to be released today.

And the number of recorded homeless people without a safe and secure place to live is expected to rise significantly, as more struggling people are told that help is available and come out of the shadows.

The report, authored by economist Shamubeel Eaqub​, University of Otago Professor of Public Health Philippa Howden-Chapman and the Salvation Army’s Alan Johnson, will be released this morning by Housing Minister Phil Twyford.

The report is understood to bring together figures across a number of areas including homelessness, the rental market, housing affordability – including the rising costs relative to wage increases – and housing supply nationwide, with a specific focus on Auckland.

One of the report’s main focuses will be to highlight a hidden homeless population that is not officially monitored or recorded.

However, community emergency housing providers report they are at full capacity, and their data from last year indicate that for every 10 homeless people that approach them, eight to nine are turned away.​

The report will refer to a burgeoning “floating population” – people without safe and secure housing, including in temporary housing, sharing with another household, or living in uninhabitable places.

The report is understood to say that greater awareness of the issue, along with more information campaigns about where to get help, is expected to lead to reported homelessness getting worse.

The report is intended as analysis of the housing issue, and is not expected to make any recommendations for action.

Odd that the Herald keeps referring to “The report is understood to…” when they obviously either have a copy of the report (have they broken an embargo?) or have been provided with details.

The Government describes it as an independent stocktake of the housing crisis to help focus its work. But National’s housing spokesman Michael Woodhouse has call it a “smoke and mirrors” exercise to find the numbers to fit the Government’s narrative, when the housing market is “flat to falling”.

Politics aside, there is obviously a problem with homelessness and difficulties in finding suitable housing for many people.

Context box: Homelessness crisis

  • 8 to 9 out of every 10 homeless people turned away from emergency housing providers
  • Hidden homeless population with no official monitoring or recording
  • 1 in 100 live in severe housing deprivation in 2013 census, up from 1 in 120 in 2006 and 1 in 130 in 2001
  • Auckland Council says 23,409 in severe housing deprivation last year, up 3000 from the 2013 census
  • 7725 on state house waiting list, up 5 per cent from Sept quarter
  • MBIE figures show a nationwide shortfall of 71,000 houses; 45,000 in Auckland

Regardless of a report trying to detail and quantify the extent of the problems, the key is what the current Government can do to alleviate both homelessness and the wider housing shortage.

Housing Minister Twyford proposes all but rent controls

Housing Minister Phil Twyford thinks that the only way to keep rental rates in check is to significantly increase the supply of housing. That makes sense. But he still intends to introduce rental ‘reforms’ – that is, impose restrictions on rent increases and the costs of letting.

There are already signs that some landlords are quitting the business, or seriously considering it. Putting more pressure on them may make rental supply tighter rather than better.

Stuff: How Phil Twyford plans to address the renting crisis

New Housing Minister Phil Twyford has several plans to make life easier for renters, but has ruled out rent controls.

Instead the new minister is clear that in his view the only way to seriously keep rents in check is to greatly increase supply.

But that doesn’t mean he wants the Government to stay out of the equation: he thinks it has a serious role to play in both increasing supply and softening the rough edges of the private market.

By the end of this year, Twyford wants to introduce legislation to reform the Residential Tenancies Act, our main tenancy law.

The key parts of these proposed reforms will be:

  • an end to letting fees that are charged to tenants,
  • a requirement that rents can be raised only once a year instead of every six months,
  • an end to no-reason terminations,
  • the required inclusion of a formula for how those rent rises will be calculated on every tenancy agreement.

That sounds like coming very close to rent controls.

National’s Housing Spokesman Michael Woodhouse new rules on landlords could easily see them exit the market and reduce the supply just when it is needed most.

“Certainly the best thing not to do is to make it harder for landlords to offer their properties,” Woodhouse said.

“We wouldn’t be following these punitive policies for landlords that they have introduced or said that they would introduce, that are making people like Andrew King from the Property Investors Federation say it’s just getting too hard for the overwhelming majority of landlords who only own one or two properties with things like capital gains tax and ring fencing, or the unknown costs from the Healthy Homes Guarantee bill.

“These are not all sophisticated profit-driven landlords – these are nurses and doctors and teachers.

But Twyford doesn’t believe many landlords will be literally leaving their homes empty, meaning the sum total of housing available shouldn’t significantly change.

The biggest potential problem isn’t landlords leaving their properties empty (they wouldn’t be landlords then, they would be bach or crib owners).

In the short term another Government MP  is also keen to help.

Wellington Central MP Grant Robertson is advising any tenants who believe their rent has risen well above the market rent in their area to consider taking their landlord to the Tenancy Tribunal.

The real risk is precipitating an exodus of landlords from the housing market altogether. In particular, as more baby boomer landlords reach or near retirement they may decide there is something simpler and safer to do with their retirement investments.

Rental housing market risk

Many people rely on rental accommodation, through choice or financial necessity (they can’t afford to but their own house). People who buy houses and rent them out provide a vital service. The Government cannot provide homes for everyone.

The rental market and landlords have received a lot of attention from politicians over the last few years as housing prices escalated again after recovery from the Global Financial Crisis – property values had already doubled when the Clark government was in power.

A lot of that attention has been negative, in part for political and campaign purposes.

The Government is set to make changes that will significantly affect housing investments. This poses a risk to the whole housing market if it deters too many people from staying in or getting into property investment.

RNZ:  Landlords bail on rental market: ‘It is just not worth it’

Many private landlords are bailing out of the rental market because they are worried about the new government’s housing policies, say property experts.

If too many landlords sell up, and not enough new investors step in, housing values are at risk of dropping, and there could be a shortage of rental housing.

The experts say landlords are being tempted to take their capital gain and run, before harsh new rules undermine the value of their investments.

The concerns have arisen as the government moves to implement dramatic reforms of the housing market.

The looming changes include:

* A capital gains tax on second homes, depending on the outcome of a special tax inquiry.

* The imposition of ‘ring-fencing rules’, which would reduce tax deductibility for rental houses, by ensuring losses cannot be set off against other income.

* An extension of the ‘bright line test’, under which anyone selling a rental home within five years would be deemed a trader and would therefore be taxed.

Property Investors Federation executive officer Andrew King said these planned changes were scaring off investors from the property market.

He said the personal hostility directed against landlords was another issue.

“There’s been a lot of animosity against rental property owners. There is a lot of misinformation about their tax situation, a lot of people think it is easy money when it is not.

“There are also changes to the how the property can be managed, and there are a lot of increased costs.

“A lot of people are thinking it is just not worth it and are looking at getting out.”

If too many do get out of property investment it will create different problems for the Government – and potentially for for people who have purchased high valued property with large mortgages.

The government has dismissed criticism of its policies as anecdotal.

It said its housing policies were aimed at overcoming accommodation shortages.

Landlords are an essential part of providing accommodation – and that’s not anecdotal.

Prime Minister refuses to reaffirm Kiwibuild numbers

In the first Question Time under the new Government Bill English pressed acting Prime Minister Kelvin Davis on Labour’s commitment to build 100,000 houses in 10 years. Davis refused to reaffirm this repeatedly.

(Davis is Acting Prime  Minister while Jacinda Ardern and Winston Peters are at APEC in Vietnam.)

GovernmentMeasurable Targets

1. Rt Hon BILL ENGLISH (Leader of the Opposition) to the Prime Minister: What will the specific measurable targets be, if any, that she will use to hold her Government to account?

Hon KELVIN DAVIS (Acting Prime Minister): As Prime Minister, I will hold my Ministers to account for improving the well-being and living standards of New Zealanders.

Rt Hon Bill English: What is the appropriate measure we should follow to monitor progress on KiwiBuild where the Government has committed to build 100,000 houses over the next 10 years?

Hon KELVIN DAVIS: We will make decisions on appropriate targets in due course.

Rt Hon Bill English: So does that mean that the current expression of the Government’s commitment, which is “to build 100,000 houses over the next 10 years” does not necessarily mean what most people would take it to mean?

Hon KELVIN DAVIS: We will make and confirm decisions on appropriate targets in due course.

Rt Hon Bill English: Does the Prime Minister stand by her Government’s commitment to “build 100,000 houses over the next 10 years”?

Hon KELVIN DAVIS: We will make and confirm decisions on appropriate targets in due course.

Rt Hon Bill English: Why did the Government commit to “build 100,000 houses over the next 10 years” if it is now not willing to re-express that commitment in this House?

Hon KELVIN DAVIS: Because the previous Government didn’t build houses.

Rt Hon Bill English: Is it possible that the Government is revising this commitment because of public statements made by the Minister of Housing and Urban Development, that the commitment may involve not building houses but buying existing houses?


Rt Hon Bill English: What other reason could there possibly be for not being willing to restate a commitment made by all its members right though the election campaign to “build 100,000 houses”? What other reason could there be not to make that commitment here today?

Hon KELVIN DAVIS: We are not revising targets. We will make and confirm decisions on appropriate targets in due course.

Rt Hon Bill English: So is the commitment to build 100,000 houses an appropriate target, or one that is subject to revision or further decisions, or is it one that we should take at its word?

Hon KELVIN DAVIS: The member will find out in due course.

Rt Hon Bill English: My question to the Prime Minister is this, then: are there other commitments that were made during the election campaign and in the Speech from the Throne that are now open to revision and later decisions?

Hon KELVIN DAVIS: We are committed to implementing what the Governor-General has said in the Speech from the Throne.

Hon Amy Adams: I raise a point of order, Mr Speaker. I just want to clarify: it’s been the practice in the House for some time that a member answering on behalf of another member should clearly identify that. I didn’t want to interrupt the question, but can you clarify whether that is still the case?

Mr SPEAKER: The Prime Minister answered the question.

Davis may have been playing safe, but this was an odd opening performance.

From the Speech from the Throne:

Housing is a top priority for this government. Action will be taken to address homelessness. State house sell offs will stop. And the State will take the lead in building affordable houses.  Through its Kiwibuild programme, this government pledges to build 100,000 high quality, affordable homes over the next 10 years; half of them in Auckland.

Davis said they were committed to implementing that but wouldn’t make a direct commitment.

In the next question Housing Minister Phil Twyford was prepared to make a commitment.

Hon PHIL TWYFORD: Both the Prime Minister and the Minister of Housing and Urban Development have reiterated our policy, which is to build 100,000 affordable homes to restore affordable homeownership to this country.

So it is odd that Davis wasn’t prepared to make this same commitment directly.  He seemed to be avoiding saying anything.

However the Opposition has emphasised the Government’s housing commitment to build 100,000 ‘affordable’ homes in ten years.

Of course amongst other things this may depend on whether Labour stays in government for long enough to ensure they fulfil the commitment.