Say it quietly – has KiwiBuild finally found its mojo?

Death, taxes and the construction industry’s boom and bust cycle: the three eternal verities of New Zealand life. Building consents are down by a quarter from last year’s peak; new liquidations are announced every week.

Some sympathy for construction firms is in order: they have been hammered by ever-rising material costs and interest rates designed to engineer a recession. But, like a socially irresponsible rollercoaster, they keep performing this rise and fall, over and over.

In 2004, New Zealand was consenting 30,000 dwellings every 12 months. Five years and a global financial crisis later, that figure had halved. A decade then passed before the peak of 50,000 consents was attained last year, just before the latest slowdown.

As the veteran finance writer David Hargreaves has observed, ‘‘Once our building industry contracts, it takes a long time to get it cranked up again.’’

But we can’t afford this delay.

Despite the recent boom, we still have a housing shortage, even if estimates of its size vary.

And a return to rising immigration brings tens of thousands of newcomers to accommodate. More people, fewer homes built: the seeds of the next housing crisis are already being sown.

The government can’t, of course, solve the construction industry’s internal problems. But for over a century, it has been understood that the state can act as a counterweight to economic cycles, propping up demand when private investment stalls and flattening out downturns.

Obviously it shouldn’t try to rescue every failing firm: some creative destruction is inevitable, necessary even. But liquidations are also immensely wasteful. Teams are dispersed, institutional memories lost; firms are slow to reform. Ideally this damage would be minimised.

How, then, might our political parties ward off another housing crisis?

National’s plan, launched earlier this week, abandons the bipartisan accord on infill townhouses, substituting a classic carrot-and-stick combination, albeit in reverse order.

Councils would be forced to zone enough land for 30 years of construction, and rewarded with $25,000 for every house built above the long-term average.

That has a certain logic, and the plan thankfully does uphold one piece of the higher-density consensus: more six-storey buildings along transport routes.

But quite apart from probably encouraging urban sprawl, which drives up emissions and infrastructure costs, the plan wouldn’t necessarily help builders immediately.

Analysts at Greater Auckland Inc fear it might actually slow things down, as councils rip up current plans for infill housing and start afresh.

By contrast, Labour, already in government, can point to work under way. More than 5000 state and transitional homes are in construction, and the Budget funded at least 3000 more. That work could – if run smoothly – provide certainty to stressed house-builders.

The Government’s Build Ready Development scheme also aims to stop planned developments falling over, either buying them up for state housing or underwriting open-market sales. Ministers say this has guaranteed 144 homes already; a second round of applications will close this month.

Labour will no doubt campaign on further state-driven house construction, and in doing so lay down a challenge to National, which admits it built too few social homes under John Key but hasn’t said what it would do next time round.

This week’s plan would actually remove the $200m-plus Affordable Housing Fund that supports community-sector construction, though National’s social housing policy, yet to be launched, may well suggest an alternative.

There is, of course, another state scheme designed to provide private builders with certainty by guaranteeing the purchase of homes at a discount. Its name is KiwiBuild; you may recall some discussion of it in the press.

It launched amid a housing boom, when no developer needed to deal with it – a key reason it flopped first up. But it has plugged away, delivering 1700 homes (albeit somewhat short of its original 100,000 target).

A further 1000 are under construction, as are 1700 conventional private-market homes in developments that are – the Government argues – enabled by those KiwiBuild guarantees.

And after all the scheme’s negative publicity, developers are turning to it in their hour of need: more than twice as many KiwiBuild contracts will be approved this financial year than in 2021-22, the Government forecasts.

That doesn’t guarantee plain sailing. One house-builder recently told me the price cut they have to take, to get the KiwiBuild guarantee, has risen from 2.5% to a scarcely believable 17.5% – driven, apparently, by the Treasury pricing in the risk of developments failing but not the full social benefit of maintaining construction rates.

Certainly it’s plausible that the Treasury, like a cynic, would know the cost of everything and the value of nothing.

It would nonetheless be a delicious irony if KiwiBuild finally found its mojo – just as Labour enters an election campaign with an Opposition determined to scrap it.

More people, fewer homes built: the seeds of the next housing crisis are already being sown.

The parties agree we need more houses; the state’s role in delivering them remains as contested as ever.