KiwiBuild: Almost 50 homes built, 99,950 to go

After less than six months, Labour’s plan for 100,000 dwellings has already notched up some victories — and quite a few defeats

KiwiBuild was always a huge call, with its target of 100,000 affordable, highquality houses in a decade. For a start, given New Zealanders’ traditional voting habits, it’s unlikely this Labour-led coalition Government will get a clear run at a decade in power to carry out the plan.

But given that it’s nearly 15 months since the September 2017 election and five months since KiwiBuild officially started on July 1 this year, now seems a good time to take stock.

So, has KiwiBuild delivered the wins Labour promised, or the losses critics predicted?

WIN: 50 lucky families come Christmas morning

Twyford says 50 families will wake up in their KiwiBuild houses on Christmas Day. And just to continue that sleeping analogy, that’s what gets him out of bed in the morning, he told TVNZ’s Q+A on Sunday night. So far, KiwiBuild’s website says 23 KiwiBuild homes are up at McLennan, Papakura and 10 at Mason Square, Otahuhu.

LOSS: Were costs by $18b?

National claims the Ministry of Business, Innovation and Employment (MBIE) told Twyford that KiwiBuild’s $2 billion budget was enough to build only 1000 houses a year under Labour’s original model and it was out by $18b. “Two billion dollars is insufficient working capital to meet the target of 10,000 homes per annum (on an optimistic average three-year recycling of the capital, only 1000 homes could be

underestimated built per year),” MBIE said. The April report was based on information from PwC, although Prime Minister Jacinda Ardern rejected it, saying last month that the “$2b had been set aside to kick-start the programme” and MBIE said the PwC advice was not based on detailed calculations.

WIN: Be patient, folks

This is a case of needing to see the bigger picture: “Kiwis know that this probably won’t be solved overnight,” Twyford says. “They know it’s complicated and they don’t expect us to get everything right all of the time.” In other words, it’s somewhat pointless doing a stocktake this early on. It could be years before any significant headway is made. It’s important to give the scheme a chance.

LOSS: The vanishing CEO

Chief executive Stephen Barclay was in the job for only five months, beginning May 28 and leaving in early November. It has since emerged that his disappearance was due to an employment disagreement. So who’s running KiwiBuild now? Barclay’s email, cellphone and the new Ministry of Housing and Urban Development all refer people to Brad Ward, head of the office of that ministry’s chief executive, Andrew Crisp.

WIN: 4047 contracts signed KiwiBuild said on Thursday it had 4047 contracts to build. Housebuilders have been keen to embrace the scheme and showed enthusiasm by signing those contracts.

LOSS: Socialism for the rich KiwiBuild is not helping the poorest Kiwis into a home. It’s been called middle-class welfare or socialism for the rich. The income caps of $180,000 for a couple and $120,000 for singles have been widely derided as being far too high, allowing the wealthy to monopolise the scheme.

WIN: Homes are rising

There are 77 KiwiBuild homes now under construction, according to KiwiBuild’s website, and a further 33 homes have been completed, showing the scheme has traction and is underway. But oh, it’s just such a long way off that annual target of 1000 homes, due to be completed between July 1, 2018 and the end of June next year.

LOSS: But where are the buyers? Demand seems stunningly low. Despite a mighty 46,489 tyrekickers signing up via email to register their interest, only 248 people have pre-qualified. Where’s the rush? Take, for example, Onehunga Mall, a popular area of Auckland with transport links and a vibrant town centre. This month, five KiwiBuild properties failed to sell via a ballot and were offered to anyone willing to buy them who could qualify for the programme, on a first come, first served basis.

WIN: A truly national housebuilding programme

This is NZ Inc. Contracts have been signed for homes to be built nationally: McLennan at Papakura, Auckland (7); Onehunga, Auckland (25); Northlake, Wanaka (211); Lakeside, Te Kauwhata, Waikato (175); Tuatahi, Mt Albert (18); Mason Square, Otahuhu, (9); and a further 3381 yet to be announced but coming soon. LOSS: Minister admits ‘one or two teething issues’

Answering questions on TVNZ’s Q+A programme on Sunday about lack of demand and ballots not being taken up, Twyford was asked if he was concerned about the scheme and criticism from the Opposition’s housing spokeswoman Judith Collins. “We have had one or two teething issues,” he replied. “One of the lessons has been that first home buyers don’t want to buy a house off the plan that’s not going to be built for another 12 or 18 months.”

LOSS: More expensive than other places

At Marfell in New Plymouth, Twyford announced a $23m scheme to build 68 modest KiwiBuild starter homes. The area has a median price of $326,000 according to property data provider CoreLogic, although the local council’s median is lower. Yet the KiwiBuild places were going for $450,000.

WIN (For National): Oops, a boost for Crusher’s leadership chances

KiwiBuild is proving fertile ground for Judith Collins. She has been tweeting and issuing press releases on an increasingly regular basis, taking potshots at KiwiBuild.

LOSS: Scheme already changed The Government has backed down on a key detail of its KiwiBuild policy. Any capital gain made on a property sold within five years was to be handed over to the Government. Now, that’s three years and instead of handing over the entire capital gain, only 30 per cent is demanded. Changing the rules along the way is never a great look.