No­body home.

North & South - - Columns - Vir­ginia Lar­son

Hous­ing. I try to avoid the sub­ject, but it’s not easy. While I cling to the hope san­ity will re­turn to the prop­erty mar­ket, al­most daily there’s a news re­port or anec­dote that re­minds me we are still deep in la-la land (the dream­like men­tal state, not the movie). The lat­est non­sense was a Bar­foot & Thomp­son mar­ket re­port that put the av­er­age house price in my Auck­land sub­urb at $1,130,556. Cross my happy home­owner’s heart, there isn’t one house in my neigh­bour­hood worth $1,130,556.

A friend who’s been go­ing to open homes most week­ends over the past few months con­firms the lu­nacy: prop­er­ties that sold for $500,000 two years ago are now listed at more than $800,000; a poky flat is spruiked as “the jewel in the crown” of a drab sausage-block, with princely price ex­pec­ta­tions; “cute apart­ments” turn out to be smaller than a dou­ble garage. My friend has a de­cent de­posit and mod­est life­style am­bi­tions. She wants some­where to live – a quaint, old-fash­ioned idea, I know, now New Zealand’s res­i­den­tial prop­erty is a do­mes­tic and international spec­u­la­tors’ mar­ket.

For eight years, John Key’s gov­ern­ment not only re­fused to ad­mit hous­ing was a cri­sis, it tried to smear the pig with lip­stick and call it a “prob­lem of suc­cess”. Na­tional’s other tac­tic has been to blame its way out of any re­spon­si­bil­ity. The Re­source Man­age­ment Act and coun­cils are its favourite tar­gets, and Bill English shows no signs of chang­ing the nar­ra­tive. In late Fe­bru­ary, ad­dress­ing his party’s Blue­greens fo­rum (Na­tional’s ad­vi­sory group on en­vi­ron­men­tal is­sues), he said the high cost of hous­ing was a re­sult of ef­forts to pro­tect the en­vi­ron­ment in Auck­land and other big cities.

The coun­cils don’t get off the hook, with their often ar­cane build­ing con­sent pro­cesses and zon­ing rules that have en­cour­aged land-bank­ing, but it’s surely a blame-game too far to sheet the high cost of hous­ing to coun­cils’ “well-in­ten­tioned…but poorly- di­rected views about the en­vi­ron­ment”? Clearly, English isn’t wor­ried about Auck­land’s reg­u­lar sewage over­flows or the sound of chain­saws top­pling ma­ture trees, few of which are now pro­tected against the city’s ur­ban in­ten­si­fi­ca­tion.

Blow­back for Auck­land Coun­cil em­ploy­ees has be­come so un­pleas­ant, man­age­ment is­sued a series of in­ter­nal memos over sum­mer called “BBQ Con­ver­sa­tions”. Es­sen­tially, they armed staff with facts to fend off curly ques­tions from “those per­sis­tent friends-of-friends who al­ways cor­ner you be­cause you work at the coun­cil”. The BBQ bul­letin cov­er­ing tricky dis­cus­sions about hous­ing – “it’s your fault houses are so ex­pen­sive… all those con­sents and in­spec­tions” – sug­gested staffers ex­plain that coun­cil doesn’t ac­tu­ally build houses, the con­struc­tion in­dus­try does; that a record num­ber of con­sents was han­dled the past year; and that meet­ing the needs of the city’s grow­ing pop­u­la­tion was a chal­lenge for not just coun­cil, but cen­tral gov­ern­ment and the pri­vate sec­tor as well.

The coun­cil’s in­ter­nal email ac­tu­ally down­played the un­prece­dented num­ber of peo­ple pour­ing into Auck­land. Not so its “Ratepay­ers’ Up­date”, mailed to house­hold­ers in Fe­bru­ary. It stated that in a typ­i­cal week in Auck­land, there are 825 new res­i­dents, more than 800 ad­di­tional cars on the roads and 278 new dwellings re­quired. Auck­land also needs two new teach­ers ev­ery week. Most teach­ers can no longer af­ford to live here, so good luck fill­ing those po­si­tions.

Coun­cils can’t con­trol the num­ber of peo­ple mov­ing into the cities they serve, and Auck­land isn’t alone cop­ing with the mi­grant surge: Tau­ranga’s pop­u­la­tion grew by close to 8500 in the past two years, caus­ing traf­fic woes and a spike in house prices, along with eco­nomic growth.

The gov­ern­ment could con­trol these num­bers sim­ply by di­alling back im­mi­gra­tion (there was a record net pop­u­la­tion gain of 71,305 in the 12 months to Jan­uary). But it doesn’t want to. It would rather is­sue state­ments like its in­ten­tion to build 69,000 houses on Crown land in Auck­land – which English adds will re­quire “an in­flux” of for­eign work­ers to build them. Is there a nutty el­e­ment to this? Where do the for­eign work­ers live?

Like­wise, Na­tional re­fuses to ac­knowl­edge that over­seas buy­ers drive up house prices, even though com­mon sense tells you when those bid­ders are will­ing to pay well over re­serves, new highs are set.

As for putting a brake on lo­cal land-bankers and spec­u­la­tors – sorry, “in­vestors” – the gov­ern­ment’s tougher loan-to-value ra­tios have slowed the jug­ger­naut a bit, but while there’s still no tax on as­sets, res­i­den­tial prop­erty will re­main Ki­wis’ go-to in­vest­ment. And they’re now buy­ing prop­er­ties na­tion­wide, boost­ing house prices and rents.

In early March, RNZ’S Morn­ing Re­port in­ter­viewed a wo­man who, with her part­ner and child, could find only a cold, shabby house to rent in Welling­ton for $450 a week.

“Bill English says high rents in Welling­ton are a ‘prob­lem of suc­cess’. What do you think,” she was asked. “Suc­cess for who?” she replied. Ex­actly.

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