Kiwibuild’s Potemkin village cul-de-sacs
In 1789, the Russian Empress Catherine the Great toured her newly acquired possession of Crimea. The region had been devastated by war, but governor Grigory Potemkin did not want his empress to see this. So, along the route, he arranged for the construction of prosperouslooking villages.
That’s the story anyway. Like a lot of things, its veracity has been called into question. But whether it happened or not, the template has been followed time and time again.
Joseph Stalin used ‘‘Potemkin villages’’ to pull the wool over the eyes of ‘‘useful idiot’’ Western journalists. These worked, with reporters credulously writing home about astonishing Soviet advances while millions were starving to death.
North Korea still maintains a phony village near the Korean Demilitarised Zone in the hopes, presumably, that South Koreans will be fooled into believing that life is better North of the border.
The initial Kiwibuild developments of the Labour-led government aren’t fake. They’re real houses that real people will live in. But they are certainly being used for similar purposes.
Housing Minister Phil Twyford will have been thrilled with the initial coverage of the moving-in day for the first lot of Kiwibuild-branded homes.
‘‘First Kiwibuild families continues Labour tradition of providing decent, warm, dry homes,’’ blared an uncritical headline that reported on the proceedings. A street party was held, sparing no expense if the entertainment from Dave Dobbyn was anything to go by. The prime minister was there, in conscious mimicry of Michael Joseph Savage.
That satisfaction will have waned, however, as the Government’s foes and allies both registered disquiet in relation to the profile of the new homeowners. The couple chosen to illustrate the project, for example, were young and upwardly mobile. One is a marketing professional and the other is embarking on a career in the lucrative medical profession.
Not that there’s anything wrong with being upwardly mobile. Quite the contrary, in fact. And the young man and woman concerned have done nothing wrong at all. Not quite fitting the archetype of the battling Kiwi family we assume to be the object of the New Zealand welfare state is not a crime.
Twyford took to RNZ to defend the policy. Kiwibuild was never intended to provide relief to low-income earners or the homeless, he pointed out. This is fair enough as far as it goes. But what about middle-income earners?
To buy a Kiwibuild home your name has to be drawn from a lottery. For a couple to be eligible for entry, their combined annual income must be less than $180,000. This makes sense when you consider the Kiwibuild homes just sold went, at a knockdown price, for just under $650,000.
But the median household income for New Zealand families (from all sources) is less than $100,000. How many households could service a mortgage on a Kiwibuild home on that kind of income? Not many, I’d wager, that didn’t have family help of some kind.
Labour wants to build 100,000 of these homes over a decade. That’s a nice, big, round number. Given the construction industry is already straining to meet demand, it remains to be seen whether that’s achievable. We will have to see.
In the meantime, however, we should be sceptical of any claims the programme will do much good other than for those lucky enough to be able to enter and win the lottery.
In the worst-case scenario, the programme could end up like the one run by Hugo Chavez, the late president of Venezuela, around 2012. When state socialism – somehow – failed to secure warm and adequate housing in the country, his government took to awarding new apartments to people from the slums by lottery.
The whole thing was televised, with ‘‘El Commandante’’ handing over the keys to crying families.
Twyford is no dummy. As an Opposition spokesman for housing, he did much to move Labour away from the idea it could just tax its way out of our housing problems.
He understands these issues are decades in the making and will take decades to fix.
Flashy programmes aren’t going to do it. When fairness is restored, it will be at the end of a gradual process initiated by regulatory form. Things won’t turn around all of a sudden.
They’ll just slowly get better as the market rebalances over time.