Kiwibuild could help boost rental stock
Icatherine.harris@stuff.co.nz
t’s been suggested the Government might be better off using some of its KiwiBuild houses for social housing and rentals, as its opponents ramp up criticism of the building programme.
Economist Shamubeel Eaqub says the number of first-home buyers who could afford to buy one of the 100,000 houses that KiwiBuild hopes to build over a decade were slim.
‘‘You have to have the deposit and you have to have the income to repay the mortgage. We knew this was always going to be a problem, particularly in the expensive areas.’’
He said either the Government needed to lower the cost of entry or put the houses to some other use.
It could supplement the housing supply by providing new rental housing or more social housing outside state housing.
‘‘At the moment there is no one who can really do that, but if the Government says we’re in the market to essentially procure X thousand units of ‘build to rents,’ and we’re going to underwrite the rent at some kind of indexation, the stuff would be built.’’
He said Wellington City Council had already taken that lead by announcing last week that it would partner with private owners to provide 350 rentcontrolled apartments with multiyear lease options.
Eaqub said it made sense for the Government to underwrite rental housing. The accommodation supplement was a huge cost, and if those on the supplement were put into inflation-indexed government rentals, it could gain some control over those costs.
‘‘These are the kind of programmes they’ll have to do if they really want to increase housing supply and reduce this uncertainty of who’s going to be the end buyer. We don’t have institutional landlords in New Zealand yet,’’ Eaqub said.
Housing Minister Phil Twyford has said he is looking at the possibility of shared equity programmes to assist people into homes.
The Government has always maintained that increasing the housing supply through KiwiBuild would effectively reduce competition for housing and bring down the price.
In doing so, it was also combating the problem of developers not building for the affordable end of the market.
Twyford maintains that by underwriting or buying affordable KiwiBuild homes off the plan, it is reducing the risk and speeding up housing developments.
But ACT leader David Seymour said earlier this week that was just shifting the deck chairs.
‘‘Phil Twyford is going around buying properties that would have been built by the private sector anyway, slapping a KiwiBuild sticker on them, subsidising them, and flicking them on to first-home buyers.
‘‘The Housing Minister is absolutely right when he says that a greater supply of homes will solve the housing crisis.
‘‘But he must act accordingly by fundamentally reforming the Resource Management Act so the private sector can get on with the job of building them.
‘‘KiwiBuild is just a $2 billion marketing gimmick,’’ Seymour said.