Editorial: National changes tack over the housing crisis
EDITORIAL: National has finally shown signs that it recognises the depth of the housing problem. Yesterday it announced that it too is proposing to build houses. This is a major change in direction away from Nick Smith's approach of "do little except change the planning laws".
Whether National's new policy will do the trick is less certain. The headlines said it would build 34,000 new social, affordable and market houses in Auckland over a decade. But at the same time it will demolish more than 8000 houses as well. So the net gain is just under 26,000.
This is not a sumptuous number in a city where house prices have exploded and where thousands of young people have given up hope of buying a house and where homelessness is a serious issue. And partly a modest policy is inevitable when National still can't bring itself to mention the "crisis" word. Even the supposedly "new broom" minister Amy Adams is still talking coyly about the city's housing "challenges".
Labour and the Greens have predictably damned the new approach as too little and too late. They are probably right about that, but the politics of housing are more complex than they look.
There is a housing crisis, but plenty of voters are leery of the scale of Labour's promises. Can we really afford to build 100,000 houses over 10 years, half of those in Auckland?
Nine years of careful and incremental policy changes have encouraged voters to think that a bold plan is reckless. There is still not a widespread feeling that it's time for big political changes.
Labour too has partly bought into this mentality, since it has scrapped its former policy of a capital gains tax. Its softer policy, of ending tax breaks for house rentals, has come under sustained attack from the property lobby, with vociferous support from National.
They argue that scrapping the ability to offset rental losses against other sources of income will lead to rent rises and fewer properties being available. In fact, landlords who withdraw from the market as a result would presumably sell their houses and therefore loosen up the supply and depress the price, both desirable outcomes at present.
Labour also says that its ambitious house-building policy will add to these trends. This, however, won't convince voters who doubt the feasibility or affordability of that policy.
In general, abolishing taxes that encourage speculative investment in property is a good move. Many house buyers in Auckland now own multiple properties, and this needs to change if prices are to come down and housing needs are to be met.
Housing is the area where National is most vulnerable, and yesterday's announcement is a recognition of this fact. It also represents a softening of National's ideological objections to state house-building and in particular to Housing New Zealand's ability to competently manage a new building programme.
If this represents a new and more pragmatic approach to the housing crisis it is welcome. If it is merely the Government doing the least it possibly can to manage the crisis and give the appearance of action, it's not.