Damien Grant

Who’s to blame for the housing crisis?

The only positive thing that can be said about Minister for Social Housing Amy Adams’s absurd plan to build 34,000 houses is that it probably won’t happen.

Why are Auckland houses so expensive? Humans have been building shelters for at least 15,000 years when our ancestors made them out of mammoth bones. We’ve made homes out of mud, we’ve even made them using snow bricks.

So why are houses in Auckland more expensive than a (pre-election) Hillary Clinton speech? Various levels of government made building houses both difficult by locking up land and expensive by regulating every aspect of house construction.

The Rural Urban Limit and the legal requirement to install double glazing are two examples why 38,000 houses were consented in 1974 and only 30,000 last year.

Professor John Tookey, from AUT, released a report this week stating his view that the Auckland housing market is definitely a bubble and it is destined to burst.

Goldman Sachs projects a 40 per cent chance that house prices will fall by at least 5 per cent.

I don’t have any idea what house prices will do but I can tell you this: the government cannot run a lemonade stand without consulting multiple iwi, paying a living wage and employing $600-an-hour consultants to tell them what photo to use in their annual report.

This will be a boondoggle on a majestic scale. We already have a shortage of builders and the government offering gold-plated contracts, no overtime and a health and safety checklist longer than a Waitangi Tribunal submission will mean construction costs in the rest of the industry will increase.

Private builders will be crowded out but at least the DIY industry will get a boost.

The housing crisis is a government created problem. The solution isn’t more government. Let’s hope this plan dies after the election faster than Winston’s Primeministerial ambitions.