KiwiBuild on life support

Labour’s flagship housing policy, KiwiBuild, was announced in 2012 to much fanfare. It was going to solve New Zealand’s housing woes. Labour promised it would build 10,000 homes a year by the end of its first term, a big promise considering when Labour was last in government it promised to build 1600 houses in Hobsonville over six years. Not only were they never built, Labour never even got as far as gaining consents.

Labour first announced KiwiBuild six years ago, when it was in Opposition. Since becoming the government, Minister of Housing Phil Twyford has consistently walked back the scheme as its popularity plummeted. Last month one of the first ballots for a KiwiBuild home had to be extended. That’s because the policy hasn’t been thought through. Some houses in the development had received no bids at all.

The minister has been so focused on announcing KiwiBuild developments to give his scheme some credibility that he hasn’t checked whether the demand exists for properties with two bedrooms at the price point he has set. Mr Twyford isn’t listening to New Zealanders. Eighty per cent of Kiwis who have registered for KiwiBuild want a three- or four-bedroom home.

There is a risk that fixing prices through a ballot will create lottery winners by selling the house below market price, or the government will be forced to underwrite houses it can’t sell.

This looks likely considering the price for a KiwiBuild home continues to climb. Officials have estimated that a first home buyer household would need to be earning $114,000 a year to purchase a $500,000 KiwiBuild house, but the median household income is $25,000 less than this.

Mr Twyford has been forced to admit what these numbers show — that the scheme isn’t for lowincome families, but this has only happened after the government created an expectation that hundreds of thousands of New Zealanders were going to get access to a government-provided home, which is simply not going to happen.

KiwiBuild has become an untargeted lottery, costing billions of taxpayers’ dollars, but isn’t making a difference to the lives of those who need it most. National is committed to helping more New Zealanders into houses, but government support should be targeted at those who need it most, and should come with an obligation for people to help themselves.

Labour has had nine years in Opposition to come up with a comprehensive housing policy. If it had put the work in then, maybe its housing policy would be vastly different. It has argued that it is offering housing support to Kiwis on a range of incomes, but in reality the only people who can access that support are those on middle to high incomes.

National’s plan was better. By increasing the overall supply of housing in general, first home buyers on low incomes could use the KiwiSaver, HomeStart and Welcome Home loan schemes to get a deposit together and buy their first home.

Mr Twyford’s KiwiBuild policy is struggling to stay afloat.

"National is committed to helping more New Zealanders into houses, but government support should be targeted at those who need it most ... "