The Dominion Post reported yesterday that the most expensive state house in Wellington is a $750,000 five bedroom house in Island Bay.
I'm an Island Bay boy, having lived there for the first 18 years of my life. I was surprised it would be home to the most expensive state house, as house prices there have always been at the middle to lower end of the market. Personally I think it is a great area to live in, and to bring kids up in.
That house is likely to be sold by Housing NZ, and the proceeds used to buy more state houses in other parts of Wellington.
State houses are highly desired by lower income families as the amount of rent they pay is not based on the value of the property, but set at 25 per cent of the family's income. So the lower your income, the lower your rent is.
The Government's policy has been to sell most of the more expensive state houses, and use the capital freed up to buy a greater number of less expensive houses elsewhere.
This way the total number of state houses increases, and the number of families who get the advantage of an income related rent also increases.
However critics of this policy say that this can lead to state houses only being in low value residential areas like Cannons Creek, and can ghettoise families on state houses.
I tend to think it is best to help a greater number of families, even if it means some state houses are not as nice as they have been previously.
What do you think is the best way to help low income families with housing? Assuming that Housing NZ has a limited capital budget, would you rather it be spent on a greater number of modest value houses, or on fewer houses but located in more desirable areas?
David Farrar is a centre-right blogger affiliated to the National Party. His disclosure statement is here.
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