New housing affordability measure is powerful but won't stop the spin
OPINION: Throughout the entire housing crisis, while median prices in Auckland have close to doubled in the last seven years, the Government has lacked an actual measure on what it considers "unaffordable".
This situation let John Key point to a grab bag of Trade Me listings when it was politically useful, and hamstrung journalists and others looking to get a rigorous picture of the problem.
Today that changed - kind of.
The Ministry of Business Innovation and Employment (MBIE) has finally released the Housing Affordability Measure (HAM), which Cabinet commissioned way back in 2012. It has a funny name and is very complicated but it does do one very important thing: it puts a specific number on unaffordability.
*Most renters would struggle to afford a home, new government measure shows
*The many houses of our MPs - which MPs have a stake in multiple properties?
*MBIE worried ministers won't like their long-overdue housing affordability measure
*Labour say Nick Smith 'probably' suppressing housing data
If you're a single renter who has less than $690 of pre-tax income left each week after paying rent or a hypothetical mortgage payment in your area, you're below the threshold, and your housing options are unaffordable.
The story that number tells is a bit more complicated than "everything's screwed" but isn't that far off. With that number in mind, as of mid-2015, four-fifths of renters could not afford to buy even a cheap house near where they currently lived, and close to two-thirds couldn't comfortably afford to continue to rent. (MBIE estimates those renters make up about a third of the country.)
As ever, things are worst in Auckland, where 95 per cent of the renters in Manakau could not comfortably afford mortgage payments on a starter home in their area.
MBIE got this number by taking a look at the exact median amount left over for the entire country in mid-2013, and then adjusting for inflation and for household size.
So no, the picture is likely not quite as bleak as "four fifths of Kiwi renters will never be able to afford a home," but it does show that there is a definitely a serious problem, and in Auckland that problem is getting even worse.
But the complexity and "relativity" of the figure still allows politicians to duck responsibility.
HAM is hard to boil down to a headline figure that opposition MPs could shout across the house. (And if they do, National MPs could quite rightly point out that the same measure shows very high levels of unaffordability during the last Labour Government.)
Building Minister Nick Smith, who answered questions on his way into Parliament but hasn't found the time to take a phone interview with Stuff, said the measure was "as good as any" and that it has "always been a struggle for first home buyers to pull together a deposit."
"It is quite a complex measure, what is important to me is the trend."
Prime Minister Bill English said close to the exact same thing.
"It shows that in the past there wasn't enough focus on getting enough homes on the ground fast enough," he said on his way into Parliament.
"Our approach to housing is succeeding."
In other words: this changes nothing. Government MPs will continue to duck around the word "crisis" while begrudgingly acknowledging the "challenge" in Auckland and then saying "land supply" as much as possible.
They won't flush the market with new social housing. They won't increase protections for renters. They won't attempt to douse the investors off with capital gains tax, despite figures showing one third of all Auckland property sales in 2016 were to people who already owned two or more homes.
They will continue to duck the ball and mention the tiny and unused $1 billion infrastructure fund, while spending record amounts on emergency housing and owning 3.43 properties each.
Credit where credit's due: MBIE didn't make HAM complicated on purpose, and the measure is truly world-leading. While I wish it included analysis of housing deposits - one of the main barriers to home ownership - I understand that the Government simply doesn't know enough about wealth to measure them.
Indeed, briefing documents released to Stuff under the Official Information Act show that officials actually considered using a much more simple "more than one third of income" measure to decide if housing was unaffordable. They scuppered this because they wanted the numbers to have credibility, and they knew that for those in lower income brackets housing was pretty much always going to take up more than one third of income. Using the complex residual income calculator gives the numbers real credibility, in their eyes, and you can see why. Good economic data rarely tells a simple story.
Those same briefing documents showed that officials were worried about the risk of a "lack of Ministerial agreement" with the measure. It's not hard to see why.