Housing in the spotlight

03:10, Jan 28 2013

Out of the blue, housing policy has become the platform from which our political leaders intend to respond to social needs.

Labour leader David Shearer kicked things off at his party's last annual conference, when he unveiled an ambitious plan to build 100,000 low-cost homes over a 10-year period.

Two-thirds of them would be built in Auckland, and first-home buyers - according to Shearer - would be able to buy a modest house for $300,000.

The policy would be financed by $1.5 billion in housing bonds. Apparently this plan would deliver a net benefit by injecting $2 billion annually into the economy, in construction activity and related jobs.

Much of the criticism levelled at Labour's plan has turned on whether houses can actually be built for the price stated, and whether even a $300,000 home is affordable to low-income families.

Plainly, many would struggle to raise the deposit and maintain their mortgage repayments, given that many family breadwinners are poorly paid, with little in the way of job security.


Regardless, last week's polls showed Labour's policy has struck a positive chord with voters.

National, for its part, has treated house prices as being largely a reflection of the land zoning and consent policies that councils have adopted.

In a speech last week, Prime Minister John Key repeated the theme that quicker, more flexible decision-making by councils that made more land available to developers would bring down house prices to within reach of those most in need.

Late last year, Auckland mayor Len Brown tried to flag that while the resultant urban sprawl might benefit developers, it would also create additional costs in infrastructure that somebody (ie, ratepayers) would have to pay for.

Key indicated that later this year National would release further details of its housing affordability package.

The Greens - the third entrant in the housing policy stakes - also unveiled their own programme last week.

Their package simultaneously tackles the problems of home buyers and renters with (a) a rent-to-buy mechanism for gradual home-ownership, (b) a "warrant of fitness" of basic quality standards that all properties put up for rent would have to meet and (c) a proposal that rent increases should happen only once a year, thereby giving renters a measure of home security, and a greater ability to budget for their housing costs.

In fact, while it was the rent-to-buy element that earned the media headlines last week, that aspect seemed far more like a pilot programme than an entitlement available to everyone on day one.

The Greens have a policy of building 2000 new homes a year - a lower and arguably more realistic figure than the 100,000 in 10 years that Labour is advocating.

Within that 2000 annual target, the rent-to-buy mechanism of gradual ownership would comprise only a modest strand of the programme.

However, it would extend some assistance to those families with few resources and poor job security - ie, the families currently at risk, and most in need of government help.

With all three parties, further details will follow.

Currently though, every political party seems to be singing in tune with the Rolling Stones' classic Gimme Shelter…You know, the one that goes, "If I don't get some shelter/ Oh yeah, I'm gonna fade away..."

Fairfax Media