Why the boomer v millennial wealth row misses the point
How well-off your parents are may determine how likely you are to get ahead in New Zealand, as a generational wealth gap widens. Kate Newton reports.
Ahousing crisis that is now in its second decade has lurched into a full-blown generational wealth and wellbeing crisis, data collated by Treasury shows.
Economic commentators say the data also points to an increasing class divide, where ‘‘dynastic wealth’’ determines younger New Zealanders’ future prospects.
A baby born today can expect to live longer, and in better health, than previous generations of Kiwis.
But that’s about where the good news for young people stops in Treasury’s inaugural Wellbeing Report – which represents a shift towards a much broader idea of economic ‘‘success’’ than just financial indicators.
Young people are lonelier, are in greater psychological distress, have declining education success and lower life satisfaction. But in a report packed full of statistics that show the youngest generations truly do have it tougher on almost every front, there is one especially glaring figure.
‘‘Since the turn of this century the gap between [the] wealth of the over 65s and under 35s has more than doubled,’’ Treasury Secretary Carelee McLiesh said in a speech launching the report.
The main culprit? ‘‘Limitations in our wealth data make it hard to be precise, but we estimate that at least half of this gap can be attributed to the growth in house prices.’’
The share of people in their early 30s who own their own home has fallen from 73% in the 1980s to 51% at the 2018 Census.
The chart on this page shows that, while all age groups are better off in 2018 than they were in 2001, the net worth of a 65-year-old has more than doubled, while those under 50 have experienced much more incremental gains.
Rather than peaking in the mid-50s, people’s wealth is now continuing to accumulate into their late 70s. This means a
tain a sense of history and place’’ within older residential suburbs.
The protections limit building heights and density, and require resource consent to demolish existing character buildings.
‘‘These rules aim to retain and manage the ‘character qualities’, or the look and feel, where areas collectively share similar and consistent characteristics, such as shared streetscapes, trees, street patterns, building types and architectural styles.’’
The conflict is fracturing Left-Right political lines, with Wellington city councillor Iona Pannett dropped by the Green Party last year over her housing stance.
Pannett voted to protect more character homes rather than freeing inner-city land from requirements for resource consent in order to demolish buildings constructed before 1930.
Auckland’s Character Coalition represents heritage and historical societies across the city. Its chair Sally Hughes said there was a ‘‘misunderstanding’’ among younger people that intensifying character areas would provide affordable housing.
‘‘If you buy a big villa on a property in St Mary’s Bay or Remuera and demolish it to build 20 apartments, because the land is so expensive and because the demand is there, developers will charge between $2 million and $4m for them.’’
Urbanist blog Greater Auckland was quick to point out that many of the character-protected suburbs had the ‘‘best walkability and public transport connections’’ in the city and would remain undevelopable because of the policy.
Generation Zero spokesperson David Robertson said special character areas were pushing ‘‘much-needed housing’’ out of the central suburbs away from jobs, existing infrastructure and transport links, and forcing Aucklanders into ‘‘highercarbon lifestyles’’.
‘‘We need more homes close to where people work, live and play – it’s a question of liveability, affordability, equity and climate action in Auckland – all interlinked topics that need to be urgently addressed.’’
Hughes said she did ‘‘really sympathise’’ with young people, saying the state of the housing market was a ‘‘terrible situation’’ and shouldn’t be allowed to continue.
‘‘I can see why they would feel they’ve been so disadvantaged. But it feels like a shame to destroy what small amounts of character heritage we have when it won’t actually solve the problem.’’
Julia Gatley, associate professor at the University of Auckland’s School of Architecture and Planning, said she commended Auckland Council for its ‘‘commitment’’ to retaining special character areas.
‘‘The emphasis with this category is really on collectives of character homes, not villas, or bungalows, or cottages that are isolated and surrounded by completely different kinds of housing,’’ Gatley said.
The council had gone through the areas with a ‘‘fine-tooth comb’’ to make clear that special character areas were cohesive neighbourhoods that had integrity, she said.
‘‘My personal view is that [Auckland Council] worked really hard to strike a balance between central government’s instruction for densification and the desire to maintain heritage and character values.’’
Caldwell said there was a ‘‘reasonable case’’ for some very limited protections like securing particular areas that were ‘‘very exemplary’’ for having a particular architectural style or rich history.
A better approach would be to implement architectural controls in certain areas so new buildings better fit an older suburb’s aesthetic style, he said.
‘‘This kind of approach is what should be special character, building apartments in a way that respects the qualities of an area.’’
But Hughes disagreed special character zones were strangling development, and said the areas represented only a ‘‘tiny percentage’’ of the available land for intensification.
‘‘We feel the cost is too high because those areas are very special, they tell the story of Auckland there, and it’s too high a price to pay for actually not much additional intensification.’’
She said Auckland had one of the best collections of Victorian and Edwardian wooden buildings in the world and there was historical importance in them as a collection, not just as individual buildings.
‘‘We’re realistic we probably won’t get any additional [protected] areas, but we would like to see them not reduced to the extent that this proposal does reduce them to.’’
But Caldwell said while it might be OK to pick and choose a couple of streets that were good examples of the areas that they reflected, stopping new homes because of this shouldn’t be allowed.
‘‘You can’t just blanket entire suburbs and say, ‘you can’t build here’.’’
‘‘I can see why they would feel they’ve been so disadvantaged. But it feels like a shame to destroy what small amounts of character heritage we have when it won’t actually solve the problem.’’ Sally Hughes Auckland’s Character Coalition