Labour's answer to the housing crisis | The Jackal

18 Nov 2012

Labour's answer to the housing crisis

Today, the Labour party leader, David Shearer, gave a speech:

Today I’m announcing that we will put 100,000 Kiwi families into their first home.

That’s the sort of big change we need to make a big difference to people’s lives.

We’ll oversee and invest in a large scale 10 year building programme of entry-level houses that Kiwis are crying out for.

Yes, it’s a big commitment and it’ll take a couple of years to ramp up, but we can do it.

I won’t stand by while the dream of home ownership slips away from future generations.

At the peak of last decade, about 30,000 new homes were built a year. Now it’s less than half that.

These are the missing rungs on the housing ladder. And it shows what an active and responsible government can do to help.

The start-up cost of the building programme will be financed through issuing government stock called Home Ownership Bonds.

The money we make from selling the houses will go back into the pot for building more.

The houses will be compact in size. Some will be stand-alone dwellings and others apartments. All of them will be good quality and energy efficient.

The homes will be sold to first home buyers who’ve saved their own deposit, like with KiwiSaver.

We estimate that the maximum needed to be raised for a kick-start will be $1.5 billion.

It will quickly become self-funding though. And because it’s a capital investment, it won’t affect our commitment to balance the books and return to surplus.

I can already hear our opponents complaining that this is too bold. That the problem’s too big and there’s nothing we can do.

I won’t accept that. I won’t give up on the Kiwi dream of an affordable home.

I have spoken to Auckland Mayor Len Brown to take up his offer of a partnership with Auckland council to make land available.

In addition, we will introduce a National Policy Statement under the RMA to ensure that planning rules and consenting decisions support affordable housing.

This is most excellent news and acknowledges the huge and growing need for more affordable housing in New Zealand. It also acknowledges the success of other state housing initiatives in New Zealand that ensured many Kiwis, including the current Prime Minister John Key, had security through affordable housing.

David Shearer might understate the effectiveness of such a policy, but like the state housing policy after WW2, there's a distinct possibility of a financial return on the governments initial investment.

The opportunities inherent in such a large scale plan to save costs by buying in bulk should ensure it's cost effectiveness. Being that the government can match the housing required with the people who require it through better technology should also ensure savings and efficiency. This policy will also boost the economy, which has been limping along under Nationals stupid neo-liberal agenda.

There is the political angle to consider, in that some property investments might not increase in value as fast as they are now once the state houses come on line. But I don't think there's any other choice and something must be done to address the overheated market in New Zealand and the fact that we're not building enough houses to meet demand.

Clearly one of the biggest positive to Labours housing policy (PDF) is that it will give those who've lost all hope of ever owning their own home a chance to get onto that all important property ladder. The social benefits to this are huge and shouldn't be underestimated.

So well done David Shearer... That's exactly the type of thing I would do if I were Prime Minister.