The Green Party's call for the government to scrap a rent subsidy is getting further traction in Parliament, with Labour now calling for some Accommodation Supplement funding to be diverted to other housing affordability programmes.
And the ACT Party has also got in on the action, accusing Labour of attacking landlords and not understanding the "real problem" behind housing affordability - a lack of land supply for new residential housing, according to its leader John Banks.
Green Party co-leader Metiria Turei last year attacked the Accommodation Supplement - a government payment to people deemed unable to fully afford board, rent or mortgage costs - as a "subsidy for landlords." See: Accommodation Supplement: Landlord subsidy punching a big hole in govt books due to unaffordable housing, or an essential benefit?
Turei called on the government to wean people off the supplement by investing in a large-scale state house building programme and require action from the private and community sectors to help increase the supply of affordable housing.
A government housing advisory group warned in 2010 the Supplement might cost the government NZ$2.2 billion a year by 2016, almost double the official Treasury projections, up from NZ$1.197 billion in the year to June 30, 2011.
Labour gets in on the act
The Dominion Post on Monday reported Labour housing spokeswoman Annette King calling for an "urgent look" at the Supplement. Labour contested the 2011 election with a policy to "review the Accommodation Supplement and its effectiveness in improving affordability and housing outcomes."
"It is a major subsidy for landlords but it hasn't produced better housing or more access to housing or an ability for people to buy housing," the Dominion Post reported King saying.
"If we just let it keep growing year after year as more and more people struggle to pay rent, then we are doing nothing in terms of changing the ability to house people and it's time that we had a highly focused look at how do you turn that into something that is a whole lot better," she said.
"I think we need to take a hard look at how we could turn some of that accommodation supplement into providing affordable, decent, warm housing and how we could turn some of it into people being able to own their own housing."
ACT gets in on Labour
ACT leader John Banks said King's "attack on landlords" showed "a lack of understanding about the real problem behind housing affordability."
"Ms King was today reported as saying that the rental subsidy being given to low income tenants was simply being ‘pocketed’ by landlords and hadn’t resulted in better housing, more access to housing, or the ability for people to buy housing," Banks said.
“The real problem is not the subsidy, it is a result of a lack of land supply for residential housing which is pushing up house prices and therefore pushing up rents for all tenants,” he said.
“Increases in the cost of housing means that home owners have less money to invest in doing up their properties once mortgage payments, insurance and rates have been taken care of. Rather than beating up on landlords, Labour would be better to focus on improving the overall supply of housing. ACT has long argued that the biggest roadblock to increasing housing supply is the regulations that control the supply of land."
“In its report on Housing Affordability, the Productivity Commission found that over the past 20 years, the cost of a section has grown far more quickly than house prices, which indicates that ‘appreciating land prices have been a key driver of house price inflation in New Zealand.’
“This problem has been exacerbated in Auckland, with the price of land now accounting for 60 per cent of the total house price as compared to 40 per cent for the rest of the country," Banks said.
“It is the policy and planning practices of local and central government through legislation like the RMA that has created artificial barriers restricting the supply of land. ACT would undertake a dramatic reform of the RMA to ensure this problem is addressed," he said.
“If New Zealand is going to house another generation, whether in owner-occupied property or rental accommodation, the key is not to beat up on landlords but to get the regulatory environment right so that more land is made available for homes to be built.”
The latest skirmish on housing affordability followed a discussion about affordabillity on TVNZ's Q&A programme on Sunday. See the video above.