Govt unlikely to ramp up state house building this term, but will work with community sector on social housing programme, PM Key says

The government is unlikely to focus on increasing the number of state houses over its current term, but will be working with non-government organisations (NGOs) and the community sector on the provision of cheap social housing, Prime Minister John Key says.

Key is set to kick of discussions with the Green Party today on possible areas the two parties can work together on during the next three years, following a memorandum of understanding between the two last term which saw the implementation of a joint home insulation policy.

The Green Party contested this year's election with a policy to build 3,000 more state houses a year over the next three years, a policy which does not look like being accepted around the negotiating table with National.

See all parties' housing policies in our policy section here.

Speaking to media in Parliament Buildings in Wellington today, Key said the government would look to continue a policy enacted last term to upgrade the existing state housing stock, but said it was unlikely the government would ramp up a state house building programme.

"We may at the margins build some more - we did last time, it was under a thousand though," Key said.

"I don't anticipate us greatly increasing the state housing stock. I do see us improving the quality. We have committed to insulating every home that isn't insulated, and also continuing with the refurbishment programme," he said.

"We're also going to work with the community sector, and build more NGO-based social housing, but I don't see us dramatically increasing the state housing stock," he said.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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66 Comments

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The Greens policy is a needs based one: it pays to make yourself as usless and needy as possible.

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That is why I go to university.

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I guess John Key was needy and useless when he was a boy living in a state house with his Mum (maybe she was on a on a benefit as well?). Then there he was needy and useless getting a free primary, secondary and University education. Strange how it worked so well for him when he was needy and useless but he does not see the need for such useless  things these days.

According to the Wikipeadia entry his father fought in the Spanish Civil war, my guess is that he fought with the international brigade on the side of the socialists , makes you think.

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Mmm. I wonder if they allowed private rental house owners to claim depreciation on their investment properties, and allowed them to use the equivalent of the old LAQC's, if that would fix the rental housing shortage problem?

Much better than forcibly appropriating my earnings to build state houses surely? I don't want to be in the business of having to supply housing.

 

... Governments, you wouldn't want them running countries ....

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Only if you are a libertarian.....all 1500 of you.....kind of not an issue...

regards

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Steven, ever heard of Stockholm Syndrome?

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Well I consider libertarians psychotic and they will never amount to anything politically, so I cant see there is any danger of me ever liking them......

regards

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And everytime I post on anything, steven comes out with his pop culture wisdom that a Truth depends on how many people believe in it. Hey, that's how old Kim Jong got demi-god status: didn't mean shite though, did it.

Note also that all libertarians want is to me left alone to pursue their happiness, but you can never leave us alone, can you. So in terms of psychoses, which of us has issues?

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You.....99.999% of ppl accept the society we live in, now if you want to be left alone, leave NZ its very easy, leave.

"Pop culture", this isnt a truth thing, its choice...how most choose to live.

regards

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steven and pdk , these guys will need a bed tonite if you could do the decent thing for your friends please

Occupy Dunedin is occupying the Dunedin Octagon no more, with the protesters pulling down their tents and tarpaulins in the city centre today.

The handful of remaining protesters have this afternoon ended their 66-day occupation of the Octagon for the Christmas period and foreseeable future.

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Well Steven, I don't appreciate being called psychotic for being opposed to violence and coercion, which states do better than any other group. It is particularly galling coming from someone who openly supports state violations of individual rights.

My point about Stockholm Syndrome was that, just like captives who start to defend their kidnappers, those who live under the state mistake a lack of abuse for kindness.  You show the classic symptoms. 

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Yeah, that about sums it up Kleefer.

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 Watch out  guys ,  Captain Calamity is on the war-path about us calling each other names .

...... you see these fools who protest that the government is taking away their rights , and they've been in the same state house for 50 or 60 years .......

And you think , Jeremy Clarkson is right , some dozy buggers ought to be lined up infront of their families ,  ..... and shot !

..... and that goes for those bludging creeps infesting the cities' parks with their slummy tent protests ....... go directly to Wall Street USA and take it up with them , twits .

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Yeah right.......so im your opinion Im not fit to make my self determined choices, that flies in the face of libertarianism, you know I should be free to choose.....I choose a society taht I see before me.

and yes if you are a tax dodger Im perfectly happy for you and your property to be delt with lawfully.

regards

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Your first paragraph makes little sense. Yes, in a free society you are free to choose any lifestyle, et al, you want, so long as you do not initiate force or fraud on anyone else: you've never understood that last bit. Your second paragraph proves what all Statists are when the surface is scratched: violent thugs: and of course they are, as the State is now the biggest initiator of force (and fraud when you think of the unsound money system on which it is set up).

And if you 'choose' the society you see before you, I can only think you never watch the news. In case you've not noticed, we've become the society where violence and thuggery rules. I'll take classical liberalism thanks ... oh, no, Nanny State with steven clapping like a gaping fool at the State built gallows of his own life, won't allow it. No freedom, or peace(fulness) to be found here.

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I suppose Steven thinks that it is heartless libertarianism and rampant free markets that produce a "Kahui" class in society, rather than welfarism.

How many young women had their first kid, out of wedlock, in the 2nd and 3rd years after the DPB was introduced? I recall reading something on this once - was it 20,000 newly created fatherless kids, or 30,000?

Just like Steven thinks unaffordable housing is nothing to do with government interference in free markets, and the "solution" is more welfarism. The 1st comment on this thread is bang on.

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I agree in principle with libertarian views on BIG government but as per usual with proponents of idealized dogma, they tend to polarize at the extremes. My way or the highway type of thinking whereas the answers normally reside somewhere in the middle.

Talk of Libertarian ideals always provokes analogies with a western movie in my mind. Ones where a powerful ranchowner and his hired gunslingers(private police force) have the local town in his pocket or cowering behind shutters

http://www.monbiot.com/2011/12/19/how-freedom-became-tyranny/ 

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Having said that - Ron Paul is someone I would vote for

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Mmm. Explain how a position in 'the middle' is better or worse than a decision at either extreme?

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Would you rather put your hand in boiling water, liquid nitrogen, or warm water?

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Would you rather walk in the front door, the back door, or into the wall?

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State housing. wehave plenty at mt eden,waikeria ,rimutaka etc.

 

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so....housing construction is guaranteed to be dead for at least another 2 years

- little support from state house building

- minimal housing development in chch, at least for the next 9 months (and possibly longer)

- any meaningful planning reform is unlikely to be operative for at 2-3 years, by the time District Plans etc are changed  

throw in the fact that its still difficult for developers to get funding, and may become more difficult with Europe  

I really think the govt could have supported the sector through a more ambitious house building programme

 

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Fat chance Matt...they set about killing off the last of the newbuild dreams with their gst hike and now are too scared to admit that was a serious blunder...never admit blunders matt...not good a good show old boy...

The chch rebuild...what rebuild....the smart and the quick left some time ago to snatch a cheap old place south or north of chch...much less costly tarting up a sound on bungalow than feeding the govt a wad of gst on an a new one.

 

{Some Canterbury home-owners face a two year wait to have their homes repaired.

The Earthquake Commission (EQC) and Fletcher's EQR announced its housing restoration goals today, aiming to have repairs to 80% of homes damaged in the Canterbury earthquakes completed by 2014}  tvnz 33 minutes ago.

 

As for the screams for state subsidised housing....it would not be needed but for the landlord subsidy that porks the value of so many rentals....that would otherwise be within the means of the low paid...nope can't have that sort of malarkey...better to waste over $1 billion a year on handouts to landlords...it's the kind of help the bank bosses need.

And so we see another 3 years of BS and farce kicking off in grand ceremony on tv right now in the debating chamber....otherwise known as "The Chamber Pot" for good reason.

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Indeed Wally. National have enacted two major policies that have helped to kill off residential construction - raising GST, and cutting back heavily on state housing construction. Of course other factors have played their part too 

 

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Yes Matt, the cutback however was intended to achieve just that...a reduction in the expansion of the state in the property sector...the opposite to the socialist dogma position...but the gst hike was intended to be balanced by the paye cuts...there was expected to be a balance...that the gst hike proved to be the final straw for many who had intended to build was not thought of...they simply didn't do the groundwork thinking....

Now having produced a turd they refuse to clean up the mess. Indeed the claim things are ok...things are improving....the spin is getting better...even the bank liars are spewing on about recovery, while the rest of the world awaits the run on the banks across Europe, in the UK and in the usa.

That is why the banks here are gearing up for the great game of getting passed the finish line in the bank tests...no bank will fail...count on it...

Back to the gst turd....the wee brain that latched onto this tax switch as a vote winner didn't have the grey cells capable of figuring out the obvious...paye cuts do balance gst but low income families need decades to save the gst theft hike...consequently with their savings being debased and the piddling amount of interest being taxed...they walked and stuff the new build.

The state housing intention of the last govt and this one is to improve the quality of the housing...a fair enough target.

The landlord subsidy however, along with the wee man's gst/paye swap brain explosion, amounts to a very destructive market stuffing farce.

 

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The Earthquake Commission (EQC) and Fletcher's EQR announced its housing restoration goals today, aiming to have repairs to 80% of homes damaged in the Canterbury earthquakes completed by 2014} tvnz 33 minutes ago.

This is funny as I know two people who are  directly involved in the rebuild process, both have been told by the building companies that at least 5-7 years before they finish repairs etc.

Better get a guarantee on that workmanship from fletchers ....

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tax nerds out there-  how hard would it be to exempt new housing construction from GSt? Guess it might be slightly messy from an administrative perspective, and obvious question around equitable tax treatment. But insurmountable?

Take a middle suburb scenario in Auckl, land cost 250K, house build cost 300K - total = 550K. Addon 15% GSt and total sales price is $632,500....

I'm pretty sure that if GST was exempted then A LOT more house building would occur - boosting the economy, and helping address the overall housing issue  

 

 

  

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Matt: not difficult in an administrative sense, but it would be better done as a refund to the home owner on completion and not as an exemption, which would be enjoyed by the builder who would not necessarily pass it on to the home owner. ie spec built homes. A test is the Federal First Home Owners Grants in NSW, which enabled builders to simply increase prices of new homes by that amount. The builders benefitted, not the home owners. The FHOG grants are now being wound back and new build prices are falling in concert.

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Piece of cake Matt...the Councils loot the homeowner for fees on newbuilds and so the evidence exists when the red tape process reaches the final money grab allowing the 'owner' to live in their home....the data is there on the value because the money grabbing is based on it....So it would be child's play to set up an application process that promised a gst refund to new home owners....that would mean a peasant family being able to chop the best part of $25,000 off their mortgage debt in one hit.

The reason this simple policy change (that would boost realtime newbuiild activity and keep thousands off the dole and assist in the skills training for the young)...has not happened is bloodymindedness in the Beehive. They don't want to say we stuffed up big time.

Much easier to close the eyes and refuse to accept they dropped a turd on the economy.

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But housing is already "too favoured" by the tax system........

Isn't it?

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John represents a set of interests.  All Johns decisions (and they are all his it seems) need to be viewed from the basis of these interests.

Most of John's decisions can be shown to be completely rational once you view them in terms of the interests he really represents.

His interests are of course finance. This is not a surprise.

Unfortunately for us we are not major players in international finance, we are not players at all. So his decisons work for the people he represents but they do not work for us.

His decisions do not work for the people of Christchurch, he does not work for for young people entering the workforce, he does not work for exporters, he works for financial interests.

So what is it that they need?

1. To maintain the value of thier investment in New Zealand

2. To have more things to invest in

3. To ensure that the interest payments keep on being made by New Zealanders

And that is all, nothing else.

all of these things are also very short term in nature,

This is not a conspirancy theory, it is very straight forward common sense. Mny people on this site are very clued up and have very good ideas about things that would be good for New Zealand. Tax, welfare, investment, exporting, the environment etc. But non of these things are of any real interest to the interests that John represents.

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very good points, sadly I think you are right.

Lot of suckers got sucked in by "Nice Guy John"

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very good points, sadly I think you are right.

Lot of suckers got sucked in by "Nice Guy John"

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The thing that annoys me most about Key's comments, are that he says interest rates are the most important thing right now.

So young people buying their first home now, can rely on John Key's assurances that the interest rate they will pay for the rest of their life, will be no higher than what they originally signed up for under conditions of year 2011, post-crash monetary stimulus?

Someone also please tell Key and the entire country, the following:

It is far less costly over a lifetime, to pay off a low price house at a high rate of mortage interest, than it is to pay off a high price house at a low rate of interest.

When house prices are low and interest rates high, usually inflation is high, and the size of the mortgage relative to income, falls. People might sign up to an onerous mortgage, but fully expecting that each year, the size of repayment will fall relative to their income. If inflation and interest rates are around 20%, then if the repayments in year 1 are 80% of income, in 2 years they will be 64%, in 3 years they will be 50%, in 4 years they will be 40%, and so on. After a few years, even the principal will be small relative to income.

When house prices are low and interest rates high, the reality always is that the interest rate FALLS in following years, mortgagees re-finance, and pay off their mortgage far more quickly than originally likely.

Older generations who enjoyed the above conditions are doing the younger generation today a grave disservice by "encouraging" them to look at "mortgage affordability" NOW (taking into account interest rates) rather than the DOLLARS OF DEBT. There is NO WAY the younger generation today will enjoy THEIR luck, with interest rates falling over the term of the mortgage and their income "inflating away" the burden of repayment and the burden of the principal.

News flash: There ARE such things as markets with unrestrained supply of land for housing, and in these markets, no demand shock or interest rate cut, forces house prices up at all. There are plenty of cities in the USA where median multiples always have flatlined at around 3.0 - did not bubble during the Greenspan era, did not crash in 2007, and have not inflated now that they are in the Bernancke "QE" stimulus era.

People in these cities today, are enjoying a combination of LOOOOW interest rates AND the same low house prices they always enjoyed - the speed at which young people PAY OFF the mortgage has increased OR their percentage of income on servicing it has dropped from a pre-crisis norm of 35% to under 30%.

Which cities, and the children of young households, have a FUTURE?

NZ needs to re-look at "poverty" figures, in the light of "discretionary spending" after mortgage costs. I am sickened by regularly meeting young couples who work their butts off, who are living like beneficiaries, because the % of their income going on mortgage repayments takes their discretionary income down to below that of a beneficiary in social housing. I am sick of seeing them in "fixer-upper" houses, with no money left to do the "fixer-upping".

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Philbest - Key has absolutely no idea on how to address these issues. Typical accountant. No flair or imagination. Not that a great deal is required to "get it" and "address" the issue

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either that or he doesn't want to address the issue because it suits vested interests to reinflate the bubble again 

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The governement doesn't want to build houses?

Maybe they've seen how the councils around NZ operate and don't want a bar of it?

No one in their right mind would build a house from scratch in NZ nowadays.  The councils just make it far too hard and far too costly.

 

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He that goes a borrowing goes a sorrowing. - Benjamin Franklin

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True  -  but might take 30 years to save up cash to buy your house. 

Over a 30year mortgage your debt should diminish against your rising income and maybe against a rising asset price.

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Watching the new house being built on a 4 section subdivision opposite us. Designed with eaves & bricks - should be waterproof.   Estimated 550k build   -  seems affordable for the 2 income middle family.   Only reporting the facts - not trying to inflame the anti-property crew.

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Wow! House being built on section. I never would have thunk it.  Quck call CNN, you might get scoop of the day!

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@ Plan B - John represents a set of interests.  All Johns decisions (and they are all his it seems) need to be viewed from the basis of these interests. 

Well you are probably right Plan B - but may I suggest that the pair of panda bear eyes John Key is sporting in the video suggests that all is not going to plan.

When I was a dealer in London those nursing seriously large losing trades always looked the same as Key does now.  And state housing is not the problem.

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Correct - and he hasn’t got a clue about interaction between society and economy.

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Muldon may have been wrong about a lot of things but maybe he did them for the right reasons. The only thing I think you could suggest in Muldons defence was that he did it all because he believed it was best for New Zealand, Yes he was an accountant but he was also  a soldier from WW2. At the time I did not like him one bit, but now I wonder when I see people like John Key at work.

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definitely not saying he was right, a great deal of seemed completely mad at the time,just that he was doing the wrong things with good intentions.

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Gotta disagree with you there Hugh : Jolly Kid does have a sense of humour ..... here's one , illicitly heard over a cup of tea with Banksie :

" Banksie , how many lesbians does it take to change a light-bulb ? "

" Dunno , John . "

 " Two ! .... one to actually change the bulb , and the other to write a 700 page best-seller based upon her experience of the event . "

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Whilst not an avid fan of Mr Key, he probably does have better things to do than constantly babble away about housing.  Why don't you take a leaf out of his book, Hugh.

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Hugh has put a lot of work into explaining housing markets. I would have thought that he should be considered more seriously.

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Housing is a hugely important social and economic issue that is not getting the attention it deserves by this govt. Thats why Hugh's words are as important as ever, to keep the pollies honest with his direct observations.   

Hugh deserves a huge bouquet for his ongoing VOLUNTARY efforts, if it wasn't for him I don't know where the debate would be.

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You may consider housing important Matt. That doesn't mean it is. A  house is somethimg you live in, whilst you do something else constructive. I'm surprised Hugh has a business at all given the amount of time he spends blabbing on here. But then again, maybey it comes from his advertising budget. I don't notice anyone else posting thier company URL after every comment. Why is that? Please do share your wisdom on that point.

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Moa man where have you been, back in the age of moas? Poor housing policy has been at the heart of the global economic mess. High housing costs have big economic costs. Poor housing has direct adverse effects on health. I could go on and on. If you don't get your housing policy right then you will have a lot of problems

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The global economic mess, as you call it, was caused mostly by sub prime mortgages.

The people who took out those mortagages thought that making money was easy. Just buy a house and flip it.  If the effort they put into filling a rat hole with polyfiller and lick of paint, was rather directed into a productive enterprise,  then I would suggest the Western world would  be a different place than it is now.  BTW have you discovered anyone else who advertises thier company URL on post's. Or have you forgotten that bit. Not an inconvienient question is it?

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Moa Man - you are one third right.  The mess was caused by easy money AND overly restrictive planning and housing policy. But more by the housing and planning policy, which being overly restrictive fuelled the speculative demand and the easy money. This is why you must understand that housing and planning policy is hugely important. You must also understand that if housing costs consume a large proportion of household income, then less money will be spent in the wider economy. This is happening in a big way in Aus now, with high levels of mortgage stress, and abysmal retail figures. 

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The finance sector has become merely the top layer on layers of rent-seekers surrounding the economic distortions created by politics. For example, the farmers who bank several hundred percent capital gains when their land is included in an urban growth "plan", are the first layer. The banks providing mortgages under conditions of rationing that force urban property prices up, are the next layer. The trade in mortgage backed securities and derivatives, is the next layer - including the multitudes of investors who flock to these as a "safe bet" because "house prices never fall". The Wall Street executives paying themselves fat bonuses, is just the remotest manifestation of a rent seeking racket than began with political interference in free markets.

NONE of this happened in the MANY States of the USA with minimal political interference in the process of urban growth.

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Can’t wait until Shearer carves into Key “Show me the NZpeople” – where are the decent jobs for the majority of hard working Kiwis to allow decent wages and not a daily struggle to pay the bills  ?

 A national government under former FX trader Key, which legislate constantly for more inequality, supporting the rich and letting down the middle – class and poor will not make it for another three years.

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The loudest mouthed show-pony opposition member  in this parliament will be Winston Peters ...... David Shearer will pray that Shane Jones or Grant Robertson teach him some tricks lickety-splick ........

...... it could be a painfully long 3 years being overshadowed by Winnie .

Meebee Shearer could invest in  some Anthony Robbin's books & tapes , to neuro-linguistically programme his way into chutzpah & bravado ........

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Well you are probably right Plan B - but may I suggest that the pair of panda bear eyes John Key is sporting in the video suggests that all is not going to plan.

How observant you are Stephen. Sometimes I switch the sound off and watch the body language and eyes first, before I listen to the words. He certainly looks different on camera these days. Quietly scared. There appears to be an element of pleading  that the lies  and insincerity are still working to cover up the underlying motives. (IMO of course)

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yes I thought he looks absolutely shattered too. Just end of year wariness, or is he stressing late night over govt concerns yet to be revealed, or is his share portfolio slumping big time (or all of the above)?????

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I rate MP's ownership of investment properties as far more serious than ownership of shares - not that our media has caught on to this reality.

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agree. they have a very strong vested interest in keeping the bubble inflated

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Hugh says JK doesn't have a sense of humour, well where's the intentional humour in your postings Hugh ? - I find your 3 times fixation quite funny but alas you are not intentionally being funny, I suspect.  Christmas almost here, time to lighten up

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John Key is beginning to trump the redoubtable Helen Clark for commenting on anything and everything. I just begin to wonder how many of his Ministers will ever  get to comment on their own portfolios. Just today where was the Foreign Minister regarding North Korea. Where was the Education Minister regarding the fiasco on the two ex teachers from Northland?

So where is the Housing Minister to comment about State houses?

Soon the Key John ILL party for NZ or maybe the new Key John One party

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Good for you animal lover and enjoy that Roast Turkey won't you...try some of the Venison sausages and a little of the leg of Ham....

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May be he will think of a new magic number next year - 6.3136 sounds interesting?