Sunday, February 25, 2018

Twyford's flagship policy is a shambles

Those of us with reasonable short-term memories will recall Phil Twyford's bullshit and bluster during the election campaign over his Kiwibuild policy.  He regularly and unashamedly announced that Labour would build 100,000 homes within ten years, through its Kiwibuild policy. 

I looked at Labour's plans in October last year.  Central amongst it was Kiwibuild.

Its website proudly proclaims:

KiwiBuild will deliver 100,000 affordable houses over ten years for first home buyers. Half of these will be built in Auckland. That is a ten-fold increase in the number of affordable houses being built in Auckland each year, from 500 to 5,000.

The stand-alone KiwiBuild homes in Auckland will be priced at $500,000-$600,000 with apartments and terraced houses under $500,000. Outside of Auckland prices are likely to range from $300,000-$500,000. These will be high-quality homes built to modern standards. Scale and modern offsite manufacturing techniques will enable these homes to be built at low cost.

Well, in between its role as pumping up Jacinda Ardern as some sort of TV celebrity or reality TV star, and reporting on Richie McCaw's wedding, the media has finally done its job.

The Government's flagship policy to deliver low-cost homes to first time buyers could be a fail on the affordability front, according to its own ministry officials.
Documents released to Newshub Nation under the Official Information Act reveal KiwiBuild apartments and houses to be priced up to $600,000 in Auckland could still be well out of reach of their target market.

It identifies price as one of the top risk factors for Labour's so-called affordable housing strategy.

"Indicative modelling suggests there may be insufficient first home buyers willing and able to purchase a 100,000 KiwiBuild houses at the price points that are outlined in your manifesto."

The Ministry documents estimate that a first home buyer household would need to be earning $114,000 a year in order to purchase a $500,000 KiwiBuild house. That's compared, it says, to a median household income of $90,000.

Mr Twyford estimated a buy-in household income of almost half that.

"You are probably going to have a household income I would guess $60,000 plus to buy a Kiwibuild property straight up," he told Newshub Nation.

Asked how many rental households in Auckland would meet the $144,000 income threshold, the Minister said: "I'd have to get advice on that... I just don't know."

But advice that went to the Housing Minister in November contained that information.
I thought Nick Smith was a disaster.  His successor is worse.  He lied to get votes.  He continued to lie when challenged on it.  And now he has lied about the advice he received.

The opposition need to go hard on this.  I'd seek a resignation.  But I have high standards.  Much higher than this dropkick, Twyford.


Anonymous said...

Exactly the same situation in the UK with the Tory's making much the same promise with exactly the same difference in cost's except when you see a dollar sign change it to a pound.

Corbyn has the answer......all property and land, and there is a lot, that is unoccupied for year or more will be triple taxed. So much property has been bought up by developers and private buyers for investment purposes and left unoccupied or unbuilt, better than putting it in the bank. Supermarkets own thousands of acres in towns all across the country and in some places they have bought available building land in order to keep competitors banking is not nice.

Lord Egbut

The Veteran said...

Egbut ... arrogant socialism at its worst then. So if the family batch is, for what ever reason, unused for a year the owner will be levied a punitive tax.

Re unoccupied land. And what happens if the land is not zoned residential (or don't they have zoning in the UK?) ... just askin.

Psycho Milt said...

From the Herald article:

The MBIE papers released to Newshub Nation say an analysis of the Auckland housing market in 2015 suggested only 25,000 private rental households in paid employment in the city made enough to buy a $500,000 house.

And there probably aren't many more than that now, in a city in which the average house price is something like a million dollars. That is a searing indictment of nine years of willful damage to the Auckland housing market by the previous National-led government, damage inflicted in the interests of real estate companies, associated trades and wealthy National voters.

Blaming Twyford for facing difficulty in doing something about NACT's colossal clusterfuck is like blaming the firemen for taking 15 minutes to turn up to the house an arsonist set on fire. Yes there is someone to blame here, but it's not the guy who's trying to actually fix the problem.

Anonymous said...

Veteran.....53 million people in England, a country the size of the South Island and yes there is the Green belt surrounding cities where legislation forbids building. That is a legacy from the U boats that almost starved the UK into submission during the war.

Of course there is an appeal mechanism which will look at circumstances and as you well know how things work this is not aimed at the ordinary people people but at those who have taken advantage.

Lord Egbut

Anonymous said...

Psycho, the national govt doesn't run Auckland City, the Auckland City Council do. Auckland is largely screwed because idiots closer to home than Wellington are running it. They may have assistance from higher perch idiots but a lot of the problems can be sheeted home to locals.


workingman said...

Lord E,

The Greenbelt system was proposed in the mid 1930s and detailed planning was in progress before WWII got in the way and then was finally implemented in 1947. The greenbelt for London is nearly 3 times the size of London.

Of course outside of the official Greenbelt it is virtually impossible to build outside of any existing town. Succesive governments have implemented a build on brownsite only policy.

I lived in a small village in Hampshire (Southwest of London) that I left in the mid 1970s. I visited a couple of years ago and in those 40 years not a single new house had been built. Only the rich can live in the country in the UK. Prices in this small unexceptional village, with no shops, no public transport, nearest train station over 10kms away, start at over NZ$1,000,000 for a small ex farm workers terraced cottage.

Anonymous said...

Workingman has hit the nail - it's not the price of houses that is the problem, it's the cost of the land to build them on. And throughout National's last 4 - 5 years, who was it that opposed plans to reduce the cost and access to cheaper land in urban areas? Why it was Labour, Maori Party, Greens and Possum Bow tie.

If the RMA urban amendments had been progressed, and Local Councils were forced to spend rates on infrastructure as intended, then by now we would be seeing much lower development costs and overall new house prices.

Also, if a family is servicing a $400,000 mortgage, how the hell will they be able to afford the extortionate council rates and insurance/eqc/fire service levy on top? Or the $10,000 - $15,000 Body Corp annual charge for an apartment?

These costs need to be rationalised as well.


The Veteran said...

PM ... a golden rule in politics is to under promise and over deliver. Twyford has managed to turn that on its head and he will pay the price for that.

Nick K will correct me if I'm wrong much much of the problem in Auckland can be sheeted home to Auckland City Council and their failure to free up land for housing coupled with a District Plan that was distinctly developer unfriendly ... and who pray tell controlled the Council for the past nine years ... 'pants down' Len Brown and Phil Goff aided and abetted by a left leaning council.

Same in Wellington and same in Christchurch and Dunedin poor sods.

workingman said...


Have you forgotten about the huge increase in property prices between 2003 and 2007? I personally know of about a dozen properties in both Auckland and Wellington that doubled in that time, and these were just normal houses.

From 2002 to 2006 Auckland house prices increased by approx. 70% and that was only brought to a stop by the GFC of 2008. That was some clusterfuck by the Labour party that takes some explaining.

In Jan 2002 the median Auckland house price was approx $330,000, and by Dec 2007 it was approx $600,000.

Psycho Milt said...

Psycho, the national govt doesn't run Auckland City, the Auckland City Council do.

The Auckland City Council doesn't get to decide whether non-resident foreigners can buy Auckland property, nor does it get to decide whether importing cheap foreign labour such that we get 70,000 people a year coming in.

Psycho Milt said...

Have you forgotten about the huge increase in property prices between 2003 and 2007?

I certainly haven't. I left for Kuwait in 2003 and was astonished how much property values had gone up when I got back 3 years later. As I recall, John Key recognised that as a significant problem back in 2008 and referred to a housing crisis caused by the then-Labour government, which needed something doing about it because how could people in Auckland be expected to house themselves at an average house price of $600,000? He was right.

Thing is, once he gained power there suddenly was no housing crisis, increasing property values became a sign of how prosperous the country was, participation in the inflating property bubble by non-resident foreigners was welcomed and increasing immigration numbers became an end in itself. So, nine years after he declared $600,000 houses a "housing crisis," the average house price in Auckland was upwards of $1,000,000.

Twyford's share of the blame for that is about 0.00, so it seems to me the OP is berating the wrong politician.

Nick K said...

Nick K will correct me if I'm wrong much much of the problem in Auckland can be sheeted home to Auckland City Council and their failure to free up land for housing coupled with a District Plan that was distinctly developer unfriendly ... and who pray tell controlled the Council for the past nine years ... 'pants down' Len Brown and Phil Goff aided and abetted by a left leaning council.

Same in Wellington and same in Christchurch and Dunedin poor sods.

Nah. I blame the Resource Management Act. Everything leads from that. Councils write their plans under that Act. That piece of legislation, more than anything else, is the root cause of the problem.

It was Simon Upton (a Blue/Green) who introduced that legislation.

The Act needs to be burned. And yes, if it were me, and I was a MP, I would take a paper copy of it to the front steps of parliament and set fire to it.

Anonymous said... are just repeating the message in my first post. Land is the problem and there is a lot you can do about it. As in the UK New Zealand has been used as a land bank by overseas investment companies and wealthy individuals.

There are 22,000 thousand empty properties in Auckland alone. This is a massive failing by successive Govts who's prime duty is to ensure it's citizens are housed, fed and have access to health care. The problems were recognised ten years ago and National have had eight years to fix the problem and made no attempt. The UK labour manifesto has changed from taxation to use it or lose it.

Any empty property that does not have planning approval within one year will be compulsory purchased and used for low cost housing.

It's not rocket science...

Lord Egbut Nobacon

Anonymous said...

Workingman...... The greenbelt was proposed in the 30's to prevent urban sprawl. It was only after WW2 that the policies became agriculturally focused and strict legislation put in place to ensure agricultural land remained inviolate......forever.

Lord Egbut

The Veteran said...

Nick. ... no argument that the Palmer inspired RMA is part of the problem ... a problem that was in train to being fixed until Peters won the Northland by-election and torpedoed the deal.

The RMA gives free rein to Councils that delight in making it difficult for developers and Auckland City was one of those. To be fair some smaller Councils went out of their way to be developer friendly and treated the RMA as a guide not a bible.

The RMA was a town planners dream. All power to the planners.

Paranormal said...

Legbut, have you stopped for a moment to consider why a valuable property is empty and not being rented out to generate an income to pay for the outgoings?

Here's a starter for 10 points - How much protection for dodgy renters is too much?

Vet & Nick, undoubtedly the RMA is the problem. One of the key things it gives left leaning anti development councils the ability to set a Metropolitan Urban Limit that artificially increases the value of land inside the boundary. Just like the green fields in the UK. PM is misguided railing against the Nats.

Adolf Fiinkensein said...

"There are 22,000 thousand empty properties in Auckland alone."

Ledgut must be counting all the used cars for sale as well as every caravan in someone's back yard.

Anonymous said...

Troll DLT.....If you had done me the courtesy of reading the attachment you would see that there is actually 33,000 unoccupied properties. About 11,000 have a genuine reason for being unoccupied. As usual no link to your bilious rantings.

Para......not sure what you are trying to say...Land banking is a myth or that it is "left leaning" councils fault...any links?

Lord Egbut