Labour hoping it can rescue KiwiBuild
If the KiwiBuild reset was a pregnancy it would be close to full term. After admitting in January that the policy would not just undershoot its first-year target of 1000 homes by July but miss it by about 80 per cent, then-Housing Minister Phil Twyford promised to take it away for a few weeks and have a tinker.
On Wednesday, almost nine months later, his replacement, Megan Woods, will finally deliver that ‘‘reset’’.
There are plenty of people who want that reset to be a full-on admission of defeat.
For the National Party, Labour completely giving up on its troubled flagship policy would be a delight, particularly for housing spokeswoman Judith Collins, who has ruthlessly pursued the case against the policy. National went out of government knowing its record on housing was a huge vulnerability, and demolishing the Government’s main housing policy would go a long way towards fixing that.
National has strange bedfellows on the left, much of whom have lost faith in KiwiBuild and some who are now actively against it. Given KiwiBuild’s current price points make the homes available only to the solidly middle to upper class, this makes a lot of sense, especially as the waitlist for public housing has doubled since the Labour-led Government was elected.
The Government is currently building a lot more public homes than KiwiBuild homes, but if you look at Crown land earmarked for
future development it looks like KiwiBuild will start to take over.
There is a group who does not appear to want KiwiBuild to fail, however: The public.
Even with setbacks hitting the news constantly, the latest Colmar Brunton/One News poll on the matter, from June, found 60 per cent of people wanted the policy to keep going. Just 34 per cent thought it should be ditched.
For context, the Government’s gun law changes following Christchurch, which brought almost all of Parliament together, managed 61 per cent support.
The public shouldn’t worry about the policy dying. The Government is very unlikely to give up on KiwiBuild completely.
Woods came up in politics with Left-wing stalwart Jim Anderton. She believes in a muscular state and is not going to just step back and wait for RMA reform and leave the market to sort out the issue.
The wider Government is also acutely aware that KiwiBuild is one of its best promises for a young middle class that isn’t getting any other help (unless they have kids) but probably would have got a decent tax cut from the other guys.
Getting people who make reasonable money out of the rental market (which they can easily afford) and into housing they own is far from the most pressing issue facing New Zealand, but it is an issue, and one you can still win a lot of votes with.
This isn’t to understate the massive challenge facing Woods in cleaning up what has thus far been a huge mess, one voters are justifiably angry about.
So what do you keep and what do you forgo? A large part of KiwiBuild’s charm as an Opposition policy was in its specificity: It wasn’t ‘‘more’’ affordable homes, it was ‘‘100,000 affordable homes’’.
We now know that this number was not really based on anything – Labour’s Annette King came up with the policy after a chat with some NGOs in the back of a car and then the number doubled quickly
to 100,000 as the leadership needed to fend off attacks from its left flank.
At the same time, the relentless focus on numbers is a large part of what has led KiwiBuild so disastrously astray. The absolute priority of getting to 1000 homes in the first year led to a serious overreliance on the dubious delivery strategy of ‘‘buying off the plans’’, where the Government de-risks existing or planned commercial developments by promising to buy a certain number of the properties.
This interaction between private developers and the Government has resulted in basically all of the problems KiwiBuild has faced so far – from homes nobody wants in various places to the allegation from National that all the policy has done is to subsidise property developers.
Whatever you think of National’s argument, it’s certainly pretty hard to argue that the KiwiBuild that people voted for in 2017 should take the form of the Government buying a bunch of homes in near-rural Auckland that were contracted ‘‘off the plans’’ but already built.
So a much more manageable pace of building may well be on the cards, or at least one that relies a lot less on deals with property developers. (A problem here is the thousands of homes already contracted, of course.)
One arm of KiwiBuild that hasn’t failed yet is the huge new suburbs the Government wants to build in places like Mt Albert with its new Kainga Ora megadevelopment agency, which will have the power to cut through local planning laws like a hot knife through butter.
It hasn’t succeeded yet either: the Government still hasn’t actually set up the agency, and definitely won’t have in time for Wednesday.
People generally like the idea of the Government building some new medium-density suburbs – it’s hard for a developer to do something like that by themselves – but none of this is going to happen overnight, and KiwiBuild needs to get some serious runs on the board.
Other parts of the policy away from the target will also be up for scrutiny.
Treasury already says the policy is operating as a subsidy, so is there appetite for making it a more direct subsidy? Are the requirements on prospective buyers too stringent? Are the price caps in Auckland – $650,000 for anything with three bedrooms – too high, or too low? Should the policy switch almost entirely to medium and high-density housing like the stuff that has succeeded in Wellington, and leave anything with a backyard to the private developers?
Should KiwiBuild focus only on homes to buy or should the Government be in the business of building non-social rentals? Should it finally take a proper look at the rent-to-buy scheme Labour promised the Greens?
Whatever Woods reveals on Wednesday will not solve a fundamental problem of the housing policy in New Zealand: Voters and governments want to have their cake and eat it too.
We want our cities to be as vibrant as those in Europe but have a deep-set cultural aversion to living in apartments. We want house prices to continue their steady rise while also becoming more affordable.
We seem stuck with tax and monetary policies that continue to tell New Zealanders that the only safe way to grow their savings is to buy property.
Even with 100,000 homes KiwiBuild would still only be a Band-Aid for a problem like that.
We want house prices to continue to rise while also becoming more affordable.