More land and houses means fewer affordable properties, academic says
More land and more houses does not mean more affordable homes, a University of Auckland academic says.
Elham Bahmanteymouri, a lecturer in urban economics, pins most of the blame for unaffordable housing on policies encouraging the supply of more land and houses.
Bahmanteymouri has completed a thesis examining the influence of "neoliberalism" on urban planning and found the focus on achieving lower prices through greater supply had caused affordability problems across the world.
"Land and housing are not normal goods, they are speculative."
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A speculative good was largely purchased for financial return, Bahmanteymouri said, and a higher price could cause more people to want to buy it rather than hold off until prices fell.
"With a higher price, always more people intend to participate in the market and they supply their land but they expect higher capital gain in the future."
It's why, Bahmanteymouri said, "we never have lower prices in land markets and housing markets".
"Psychologically none of the human beings want to lose their asset or capital, especially regarding land and housing.
"We want to keep the price at the same level or higher level, always."
Bahmanteymouri said housing remained unaffordable even during property busts like the large drop in prices seen in the United States in 2008.
"People really couldn't buy a home because of the lower purchasing power of the whole society."
At the Ellenbrook development in Perth, Australia, a public-private partnership that Bahmanteymouri classed as "100 per cent neoliberalism", land was sold to developers on the provision that around 12 per cent of it would be used for affordable housing.
"I had an interview with the developers and the companies, and also planning institutions, none of them, no-one can say to what extent they provided affordable housing there.
"Even the developers, they themselves they don't know, there isn't any certain numbers as to what extent they achieved affordable housing."
Responding to Bahmanteymouri's questions, developers and others used the argument that affordable housing should not be marked out or separated off from other forms of housing, so they could not determine how many affordable houses they had constructed.
"Most of the actors are involved in buying and selling land in a kind of vicious circle, and they met their main aim.
"Even the local planning institutions, they are involved in buying land and even the operation of public-private partnership is based on this operation of buying land and selling land in the area."
She said Germany provided an alternative model, and the level of industrial activity there meant it was less reliant on the housing and financial sectors.
"Too much liquidity in the economy always provides lots of problems, for example, unaffordability.
"Housing is not the subject of speculative activity in Germany at all."
Bahmanteymouri graduated with a doctorate from the University of Auckland on Thursday, a journey which started in 2015 after working at Iran's Ministry of Housing and Urban Development, where she became interested in the link between psychology and economics.
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