The meeting that shows why housing is broken

Ask local board candidate Suveen Walgampola to describe the atmosphere of an antihousing intensification meeting at a central Auckland church on Sunday and he uses two words: ‘‘pretty cooked’’. ‘‘The only way new migrants like my mum gain housing are these new developments . . . clearly the status quo is unsustainable. Special character is not heritage.’’

But he missed the most ‘‘cooked’’ part of it, because he crept into St Matthew-in-the-City so late there was nobody on the door. If he had arrived a little earlier he’d probably have been stopped and told to wait for members of established residents’ associations to take their seats.

The biblical metaphor of the innkeeper who tells Mary and Joseph there’s ‘‘no room at the inn’’ is often used as a metaphor for the housing crisis. Except at this public meeting there was plenty of room; the innkeepers just seemed to be wary of the ‘‘type’’ of people who were trying to get a seat.

Coalition for More Homes spokesperson Scott Caldwell says: ‘‘They wouldn’t let us in until all the ‘invited’ people were in – which is basically all the residents’ associations.’’

But accompanying Caldwell was a member of the Auckland City Centre Residents Group (CCRG), Oscar Sims. ‘‘I managed to blag my way in before the meeting started by saying I was from the CCRG,’’ Sims says. ‘‘The first thing she [the woman on the door] said was, ‘Oh, so you’re here for prointensification,’ and I was like ‘Are you just asking that because I’m young?’’’

‘‘After some haggling, I got let in and talked to media. Then I went back outside and they wouldn’t let me back in again.’’

Mayoral candidate Michael Kampkes, who helped organise the event, said residents’ association members were promised seats, but younger people shouldn’t have been kept out.

All of this is much like the housing issue itself: there’s enough space for more people in New Zealand, plenty of characterless villas that could be better utilised, and land that could be better developed.

There are plenty of places and professions that could do with more people too: the Government is so desperate for nurses it has started believing Shortland Street can save the day. Meanwhile, almost every sector from information technology to the freight industry is complaining that increased pay rates aren’t attracting enough people.

Yet everybody keeps being told there is not enough room for anybody, or anything, new. The reasons are always the same and include everything from Asian immigrants aren’t very responsible with their lawns right through to ‘‘We just haven’t built enough infrastructure yet.’’

One of the big political reasons for the hesitation to give new migrants residency is that they become eligible to buy a house. The perception is that this drives up house prices. But does anybody really believe we would have a surplus of infrastructure or housing if the population didn’t increase? Or is the more likely scenario that we would have built even fewer homes and put off those essential infrastructure upgrades for even longer?

A recent ANZ survey found the intention among building firms for future residential construction has fallen off a cliff and now sits at -73.7% (meaning far more of them intend pulling back on construction work than not). Building consents might be sitting at record highs over the whole year, but in June they declined 2.3% – their third consecutive monthly fall.

There’s plenty of room at the inn. The political economy is just not set up to let people in.

Why? Interest rates might be going up, but we still have a shortage of housing, so the industry still needs to catch up. The reason is the system is built to never catch up. Part of it comes down to development rules that some Yes In My Backyard (Yimby) activists are lobbying to roll back.

Between 1938 and 1977 a 1% rise in population led to a 0.5% increase lift in house prices, yet between 1977 and 2018 that same increase caused a price bump four times that rate. As the Infrastructure Commission concluded, stricter development rules came into play between 1977 and 2018, which affected the ability of builders to increase house-building to keep up with population growth.

Then there are developers who are incentivised to buy land and simply wait for councils to get around to paying to build the infrastructure for them. And let’s not forget local government, which increasingly levies rates based on capital values rather than land – a move that favours people who own valuable pieces of residential land but don’t do much with them.

As with St Matthew-in-the-City on a Sunday afternoon, there’s plenty of room at the inn. The political economy is just not set up to let people in.