Peter Dunne says the Government's flagship housing programme is beginning to look like no more than one of Edmund Blackadder's cunning plans

By Peter Dunne*

Kiwibuild is beginning to look more and more like no more than one of Edmund Blackadder’s cunning plans.

While this week’s controversy about the couple getting the first Kiwibuild home is nothing like the drama National is making it out to be, it is nevertheless just another example of the policy’s shifting sands.

It is worth recalling that in its election policy just one year ago Labour promised that it would “build 100,000 high quality affordable homes over 10 years”. The policy went on to talk about curbing homelessness through building affordable homes in the $350-450,000 price range.

The implication was unambiguous - Labour’s approach was going to be far more activist than National, and Kiwibuild would be Its primary policy to deal with homelessness and the housing crisis.

The not unreasonable belief consequently emerged that Labour would get on top of the housing crisis, in a way that National never could.

Given the general view of the time that National had let the housing crisis get well away from them, without too many ideas of how to resolve it, Kiwibuild began to look as though it might just be the fresh approach needed.

How different things look one year later.

So far, just 18 Kiwibuild homes have been built, and another 447 are on track for completion by July 2019, leaving a shortfall of 535 on its first year 1,000 homes target.

Put another way, a first year achievement rate of just under 47%. And there has been a subtle but clear rewrite of the Kiwibuild objective.

According to the Kiwibuild website, the objective is now the much more passive one to “deliver 100,000 homes for first home buyers over the next decade”.

So, no longer will the government build “100,000 high quality affordable homes”. And no longer does “affordable” mean $350-450,000, but $650,000.

Moreover, now the plan is merely to “deliver” 100,000 homes, which, in the best Blackadder fashion, means accumulating all the new homes already being built over the next 10 years by the private sector anyway, and dressing them up as Kiwibuild homes.

And by introducing the new qualifier of “homes for first home buyers” the government can better tailor its plans to fit with what the building companies are currently doing anyway, and market it all under the Kiwibuild label.

Any suggestion that Kiwibuild will mean 100,000 more houses being built than might otherwise be the case has long since vanished.

All that is happening is that existing plans are being branded under the Kiwibuild label, which is win-win for both the government and the industry.

Therefore, in reality Kiwibuild is a very clever strategy of the government doing very little, but making it look like a lot, and all the while being able to milk many photo opportunities for Ministers as the still uncommon achievement of each house being completed happens.

Meanwhile, the homeless Labour were so concerned about in the lead up to last year’s election remain homeless, with not much apparently being done to meet their needs.

A specific initiative is the Sweat Equity programme, but it is only available for 6,400 homes, and is unlikely to be sufficient to house the many homeless families Labour used to focus its attention on.

In addition, over the next four years the government is planning to increase the public housing stock by a net 1,000 over the total projected under the previous government last year, likely to still be less than the total number currently on housing waiting lists.

Mind you, given its own record on housing is hardly one to crow about, National is not going to be taken seriously on this issue for a while yet, making some of its current criticisms a little hard to take. The public memory is not that short. So, despite the criticisms, the benefit of the credibility doubt still lies with Labour - just. 

Nevertheless, when the marketing awards are next given out Kiwibuild deserves first prize as a cunning plan, well marketed, but delivering very little and changing not very much, while all the time leaving people feeling good about the government’s warmth and kindness. Not even Blackadder and Baldrick in their heyday could ever have been as devious.


*Peter Dunne is the former leader of UnitedFuture, an ex-Labour Party MP, and a former cabinet minister. This article first ran here and is used with permission.

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63 Comments

Neatly skewered, lightly basted, and spinning slowly on the spit. That's KB, all right, and that was a very good read, Sir/Mr/Rt Hon/Yer Honner (former dignitaries are a minefield as to the correct form of address...) PD.

Yep if you flog a dead horse long enough, it stays as dead as it always was, but you can sure make some noise whilst at it.

Can't really disagree with anything much in the article. I'm not a fan of Dunne, but what he says is true. KiwiBuy is increasingly looking more and more like a complete flop. When it looked like they were actually going to be building and using the govts purchasing and regulatory powers to build housing it sounded like a good idea.

They should abandon it, and get to work on building as many state houses as fast as possible, including buying developable sections on the open market. Stop farting around with propping up overpriced developments, and keep on with raising the minimum standards on rentals. Give landlords the choice of improving the shitboxes, selling up, or losing tenants to better quality properties (either HNZ or other privately owned rentals that have been improved).

I'll reserve my final judgement for when the Unitec site plans and prices are out.. but for now its a fail.

I have publicly stated that I do not like Peter Dunne nor his actions from when he was the Minister of Internal Affairs. Yet I agree with his article.

Labour has failed to tackle the real underlying issues. There has even been defence of their actions saying they are increasing supply. In reality Kiwibuild would need to outpace demand but that's not going to happen, and the quantity of skilled workers needed is not going to appear out of nowhere.

Judging a 10 year house building program after just one year seems pretty silly to me. And even if Labour 'fail' and only build 50,000 homes, is that worse than doing nothing?

And do we really want more state houses? Isn't home ownership a key driver of happiness, law abidance, etc?

You don't think getting people out of private rentals which we are subsidising with accommodation supplement, into better quality (ie. healthier) new homes is a good idea?

Then there are the side effects of reducing demand for private rentals, and increasing competition amongst landlord for tenants. This will leave private landlords a few options.. Upgrade or redevelop the not fit for habitiation rentals which no-one wants (yay, better quality housing for tenants, and lower rents), or sell the rental property (more supply for buyers, should lead to lower prices for buyers), and of course the accommodation supplement money ($2billion per year.. ) stops getting funnelled to landlords bank accounts, and instead is invested in expanding the housing supply via state houses.

And once we have enough/excess supply, the state can sell off state houses that aren't needed, possibly with a rent to buy scheme to get state house tenants into home ownership, though that would be a bit down the road.

Peter Dunne would know about failure to address the housing crisis, HE hitched his wagon to the party of crisis deniers for years! Let's not forget the fan favorites, tracks like, "There is No Housing Crisis" and "Its a Housing Challenge". Now he has the audacity to write articles about the housing crisis and KiwiBuild - he's a disgusting person!

I look forward to the release of Mr Dunne's Christmas album, featuring the tracks:
- Peter the Pinokio Reindeer
- We Wish You a Merry Street Corner
AND Everyone's Favorite,
- Homelessness is Coming to Town

You obviously have absolutely no response to his criticisms of KB - therefore you are attacking the man.

Urban Development Authority legislation potentially next year could be a game changer, but you'll find an excuse not to buy whatever the case may be.

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Totally disagree, clearly it was Baldrick who came up with the cunning plans! Blackadder was stupid like a fox.

MTP you are correct. It was Baldrick that came up with the cunning plans and KiwiBuild would rank among his best.
However, Blackadder wasn't too stupid and looked at the implications. I can see him initially rolling his eyes and then agreeing with him in this instance; "Mmm . . . . and people will be stupid enough to believe it and vote for us."

Perhaps the same thing but the other way way round “ If people are as stupid to vote for us in the first place, then they must be stupid enough to believe in this.”

Agree. Perhaps Twyford has Balders as a consultant!

Great, very pertinent article, very well done Mr Dunne

He doesn't mention the Housing First programmes that have been funded nationwide, e.g., in Auckland;

https://www.housingfirst.co.nz/results

From this new funding;

https://www.stuff.co.nz/national/politics/103619757/government-announces...

But there's no getting past the fact that the problem was/is chronic.

Seems to me that the government is attempting to address housing quality and affordability on a number of fronts - but it is curious why they haven't moved on freeing up land supply by way of removing AKL's urban boundary. Could it be that is harder to achieve than they thought - and hence the urban development authority approach. It would be nice if Twyford would clarify forward intent in that regard.

I dont disagree its chronic, however building "affordable" 550k+ homes and "giving them away" is not a fix its a load of b****cks.

Labour should get real and start boosting Housing NZ inventory as the ppl really in need at the bottom can otherwise never be homed decently.

They are hardly giving them away. In my opinion, those 'lucky' winners of the KB ballots in AKL in particular, will find themselves in negative equity in the not too distant future. But if the programme (i.e., the government acting as guarantor) keeps development going - it is worth it to my mind where we do have housing shortages.

I personally object as a tax payer to being the guarantor for the loss.

My understanding, although I haven't read up on it well, is that the guarantee applies to the developer (in the event the stock does not sell) as opposed to the purchasers in the event of mortgage default. The guarantee (once a development is complete and on sold) then gets recycled onto the next development project.

At least that's how I understand it, but other folks here are likely more familiar.

If Dunne is correct that these Kiwbuild properties would have been built anyway but Twyford creates the illusion of increasing supply by slapping on his brand sticker in exchange for the taxpayer carrying underwriting risk during development, we have been misled. Twyford clearly, repeatedly and loudly insisted Kiwi builds would be additional.

Correct

So you would rather the government build a ton of state houses at 100% loss than prop up a few developers for a potential partial loss?

I'm not convinced you understand how any of this works?

If you think you do, would you please explain how you can make a 100% when you retain the asset that you have bought?

He means they have to pay for the builds but hes missing that in return the govt effectively gets an income because they then dont have to pay private landlords.

This was never about addressing housing shortages, rather about conning voters and winning an election.

No, i'm confident they thought they could actually manage to build a ton more homes, they are just not that competent and soon discovered that there aren't lots of parcels of cheap land, and a few thousand builders looking for work. Good intentions, but piss poor execution. Its slightly better than Nationals perfectly executed intention to do nothing at all.

Your last sentence says it all. It looked like National was doing nothing. BUT in fact they were and PT is riding on their coat tails. What white rabbit is he going to pull out of the hat next year. Kiwifix

Wave that blue flag a bit harder imhenry.. maybe someone will believe you if you try harder.

Please no, the transport infrastructure from the South and West of Auckland is completely overwhelmed already with tons more new build sub-divisions being completed. The last thing Auckland needs is more urban sprawl.

Yes, well if these are the reasons, they ought to admit it and explain that that is why they've backed off their promise to remove the urban boundary..

Removing the RUB would decrease sprawl, reduce pollution, create jobs and improve the Auckland economy.

The real reason - removing the RUB in 2016's booming market (when the policy was announced) would probably have caused Auckland house pricing to fall by 0-2%, which would not have been a problem.
Removing the RUB in today's stuttering property market might cause Auckland prices to drop 10-20%, which would be a problem. Retaining the RUB allows the 2018 Auckland market to have slow marginal falls in the 0-2% range.

Incidentally retaining the RUB exposes Auckland to higher risk of a larger crash in housing value, than removing it. But if that happens it will probably be after the next election.

How would removing the RUB reduce sprawl?

Auckland has extraordinary planning. The RUB blocks development at the boundary of the contiguous Auckland suburbs, but allows for wholesale development around every town in the Auckland region away from the contiguous suburbs. By retaining the RUB we force development to sprawl further and further away. If we remove the RUB people will be able to live closer to Auckland - be less sprawled out.

Yet there are ppl who would live in such homes. The problem is the cost of putting in public transport is going to make the existing tax payers wail. It wouldnt be so bad if I thought it could be done competently but fat chance of that.

Please yes. The unique idiocy of Auckland planning is the current Auckland Urban Boundary exists solely to produce massive sprawl. The RUB prevents building adjacent to existing suburbs, BUT provides almost limitless land supply starting 5-10 km away from existing suburbs. With the RUB Auckland Council is creating mega-sprawl most akin to LA in its structure. If anyone thinks traffic is bad now wait five more years as Phil Goff forces more development into areas outside the public transport network.

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They haven't moved much on immigration either. At the end of the day, if you double the population then you need to double the amount of housing, electricity supply and water?
NZs fertility rate is below or at replacement and has been this way for the last 20 years, so population growth is not because kiwis are breeding like rabbits.
NZ has the highest population growth rate in the OECD, because of poor immigration policies.
NZ does not have land borders and is not subject to people caravans; it has poor immigration policies attracting hordes, from the third world, looking for government handouts from kiwi tax payers (housing, water and electricity infrastructure - paid for by previous generations and future generations (kiwibuild)).
Government policy over the last 20 years has been a betrayal of kiwis, born and bred in NZ, who now face housing shortages and future electricity and water supply shortages because of bludgers from the third world ripping off tax payers.

NZ (and particularly Auckland) also has a very good proportion of young people thanks to these immigration policies. These young people will be propping up the boomers in retirement. It will be interesting to see how badly ageing populations perform in coming years compared to NZ.

Young immigrants paying for all this infrastructure by serving coffee to each other and the oldies they bring in with them using 'chain immigration'.
NZ will never get rich bringing in people from the third world to serve coffee and work in cafes or chop vegetables. Third world people have third world educations and third world skill sets, if they continue on this path then NZ will become a third world country.
Where is the new Fisher and Paykel that generates millions of dollars of export revenue that these migrants brought over with them using new technology they invented to pay for all the new housing, new electricity generation and new water supply they need? Opps thats right they go forcing down the wages of the staff currently working at old Fisher and Paykel when they compete for the old jobs there.

Something our contract developer from India once said to us - "New Zealand has brought in the wrong type of Indians".

Another excellent article by Peter Dunne.

...535 short on first year. And even that is a big miss on some massively shifted goal posts. They post-facto arbitrarily wriggled the 'start' date back 9 months, reduced the number they would build per year in first years (knowing full well they are most likely out next election anyway so will never really have to deliver on larger numbers promised) and need to do 10000 a year to reach 100000 promised in 10 years. That is now up to about 11000 a year given a year with sweet FA delivered. The mountain is getting ever steeper

They are useless at this. What they need to do is bring the monopolies to heel (primate and local govt). Cut the huge regulatory cost and time impediments to housebuilding and kill the materials cartels. That will reduce house prices by a couple of hundred k without them needing to otherwise involve themselves in embarrassing failures of policy and management like kiwibuild.

And then in the 11th year, all the resources that had to be ramped up to deliver all these houses can go and do what?

Hamish. A well understood challenge to any large scale building program. Twyford would have addressed this in his planning when creating the Kiwibuild strategy while in opposition. Otherwise he risked coming out with a poorly thought through, half baked concept that would quickly be proven unworkable, require significant modification and morph into a smoke and mirrors political labelling exercise underwritten by the taxpayer. Oh, wait ......

Just wait, there will be even less homes built under Labour as a direct result of Kiwibuild. As the decline in residential construction intention shows - when the Govt subsidises some developers into the Kiwibuild programme, and FHB hang around in a queue waiting to see if they've won a "cheap" home in the lotto, it forces non-Kiwibuild developers to either slash their costs/profits to build even cheaper than Kiwibuild homes, or start building for the high end, upgrader market - because the FHB market has effectively dried up for non-Kiwibuild developers. And if they can't do either, they simply will not build at all.

Gosh, I am shocked. Government fails to deliver! Whatever next?

I guess they will find some other small successes to take credit for. Couple Buy House In Queenstown. Man buys house in Christchurch. Homeless man found motel room. Motels full to bursting. Tourist gets on bus. That sort of thing.

Over-promising & under-delivering has been political bread & butter since way back. Politicians, a bit like teachers, can't really do much in the real world, so they turn to organisations where you can talk a lot & do nothing. Hence, we have a very mediocre format of what should be the best leadership system on the planet. This is what's killing the West. Too many mediocre people in high places doing f... ...l. It's a global disease. Regional govt is just as bad, except in Switzerland, where they have what I would describe as the best of the current democracies, either on show, or in practice. There is no Known cure currently, as those involved don't want to change anything. And can you imagine the noises coming from Wellington if we did? Like most things, it appears as if there has to be some sort of catastrophy before any meaningful change will occur. Although looking forward somewhat, we might be in luck!

Prefab has to be the long term answer to this. It seems like prefab housing in NZ is at about the same place as electric vesicles were when Elon Musk started Tesla. It needs someone with incredibly deep pockets to force the change to happen. I personally was hoping this government was going to be that someone.

Twyford earlier reported widespread interest from businesses keen to work with government on creating prefab factories and I would have thought we'd have seen soft focus images of our smiling leader cutting opening ribbons to many such Kiwibuild dedicated facilities by now. Have I missed these ?

The Coalition have no idea of what they are doing, as they have no business acumen or success behind them.
Mr Twyford looks so out of his depth in both of his portfolio roles.
FFS he says that the KiwiBore homes are spacious????
They are far from spacious Mr Twyford, you are away with the fairies!!

Bring back National. They'll get it done!

lol, they had no interest in solving their "good problem to have".

They would waste less of our hard-earned money while not getting it done. I vote for that.

Nary a person with common sense, in Parliarment..nor Councils so do not hold your breath.

Just keep swapping self indulgent idiots on a rotational basis. Robbing Paul to pay Peter....is one small observation.

Musk is deep in debt...so do not look to him for support...Prefab is sensible...he ain't.

The rest of the World can build, far better, far cheaper, far more efficiently, with far better results than we can.

Yet we have far more room...for improvement. Duh.....ya wonder why?.

Have we learned nuffin in the past 200 years.

I have only been here for 40...but we tossed it all away...Logic....nah...Nation sold out..to feather the nest. Milk the system and dream of leaky, shaky, Mcmansions as the only way of life.
Cheap rentals. and sensible building solutions.....nah...not likely.

Don't be too hard on Musk.

He achieved the highest cumulative $ revenue for all car sales in the US last quarter.

An incredible feat from a standing start given the very mature entrenched competition. Toyota, Honda, Hyundai, Ford, Chrysler, GM !!

Typical Dunne , lots of criticism , not one constructive solution .
More has been done in 9 months than in 9 years of his part governing.

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WHAT UTTER BOLLOCKS !

I pointed out on this forum during the election that Kiwibuild could and would simply never work .

Unlike 1945 , we dont have 200,000 demobilizing soldiers that can convert their guns into nail-guns and embark on a massive post-war public works program .

Anyone with half a brain could see well before the election that Kiwibuild was a scam and a con to lure voters who could not do the most basic arithmetic to simply see it could not be done .

The fact is , the Government cannot be the provider of housing -of -last -resort to everyone .

Hell , even Helen Clark saw this , and thats why she made it easier through tax breaks for private investors to provide housing stock , when she realized that the State did not have the resources to do so

We dont have enough money , the taxpyers cannot afford it , we dont have enough builders , and we dont have enough people to skill up to do the building work

Auckland Council continue to milk and rort the system for fees , levies and eye-watering sums for the most basic services to new subdivisions .

Immigrants keep piling in here by the plane-load , exacerbating the problem.

There is zero political will to sort it all out

Politicians and economists are all poor accountants. Much is made of the accommodation subsidy to private landlords. Only half of all tenants get the AS. The average payment to private tenants is 25% of the subsidy paid to lucky tenants who live in HNZ houses even if their income is the same. So every new HNZ house puts the economy backwards not forward. The tax payers cost of 8 private tenants equals the cost of one HNZ tenant. What is more the private tenants are happier and have better quality more responsive management by a landlord who cares about their home rather than a civil servant who goes home at 4:35pm Monday to Friday.

Half of all tenancies claim some sort of accommodation supplement? Yikes. And the other points mentioned are also very interesting statistics - have you got any links to information that confirms that analysis? Cheers.

. Much is made of the accommodation subsidy to private landlords. Only half of all tenants get the AS. The average payment to private tenants is 25% of the subsidy paid to lucky tenants who live in HNZ houses even if their income is the same. So every new HNZ house puts the economy backwards not forward.

Incorrect. Every dollar that the govt pays to a specu-debtor landlord in accomodation supplement goes where exactly? Mostly into paying interest on a interest only mortgage, which means the majority of it gets funnelled straight out of the country in bank profits. May as well set it on fire.

Where as the housing NZ client doesn't actually get paid any govt money, the money is tied up in the asset, which remains the property of the govt. End result is the housing NZ client has more of their meagre paycheck to spend in the NZ economy, which is generally much better for the economy than funnelling it overseas to the bank shareholders.

Half of tenancies are boosted through the Accommodation Supplement flowing to landlords?

Phew...talk about middle-class welfare, not standing on one's own two feet.

Cunning plans that don't ultimately come to much? How appropriate this should be posted by Peter Dunne.

that is the best headline I have read for a long long time. Well done Peter Dunn, and interest.co.nz!

The real kicker is that the Government will ,actually "build " not a single house , which is what thew gullible young electorate was conned into believing .

Unlike the perception Labour created during the election campaign , which was publicized as if this was a return to the post-war era when the State actually did build houses .........