Mana Party unveils policy for Maori first-time home buyers that would see the state provide low interest, no-deposit loans, with 10,000 new state houses a year

Mana Party unveils policy for Maori first-time home buyers that would see the state provide low interest, no-deposit loans, with 10,000 new state houses a year

The Mana Party is pushing for no-deposit, low interest, loans to enable Maori first-time buyers to get their own homes.

The party says it also wants 10,000 new state homes built a year.

These policies were announced today by the party's candidate in the June 29th Ikaroa-Rawhiti by-election, Te Hamua Nikora.

"...We want to rectify the imbalance in home ownership through a loan scheme that encourages and enables Maori to become home-owners and not just renters of dumps owned by property developers," he said.

Government financing for the housing would come from Te Puni Kokiri, "effectively cutting out banks and their mean-spirited attitude to Maori homeowners".

In his speech announcing the policy Nikora stated no upper limit on the size of the loans, nor was a costing estimate given. However, party leader Hone Harawira was quoted as saying up to NZ$200,000 could be borrowed by Maori to buy or build a house.

Nikora said housing for Maori was a huge issue.

"In fact, housing for Maori right across the country is at a crisis point, with only 45% of Maori owning their own homes compared to 70% for Pakeha.

"It doesn’t matter where I go, the message is the same – we need the state to build more homes that we can rent and that we can own."

He said Mana wanted land available for Maori "in the same way that land is being made available by government and local bodies to ease the Auckland housing market crisis".

"Maori are as much a part of the history and infrastructure of our urban centres as anyone else; our mokopuna deserve the opportunity to be as much a part of that future as anyone else."

Nikora said Mana wanted to update and extend the former Maori Affairs Housing Loan Scheme.

"Between 1935 and 1987, Maori Affairs built 23,500 new houses and bought 5,000 others under the Maori Housing Act. That scheme was killed off by the Labour government of 1989.

"The Maori Affairs Housing Scheme was simple – houses were built on Maori land, or purchased through Maori Affairs, on a low deposit. Many Maori families continue to live in those homes today and builders comment often on the quality and strength of those homes."

Mana would run the revamped scheme through a restructured Te Puni Kokiri.

Major points to the plan included:

  • Only Maori first home owners would be able to apply
  • There would be no deposit
  • Interest rates would be no higher than the rates government pays on money it borrows
  • Applicants could either build new or buy an existing property
  • Applicants would be able to negotiate mortgage arrangements that suit their circumstances

"Mana’s policy is aimed at my generation, people who often work several jobs for little pay, sacrificing time away from their children to make it happen and yet for whom even joint incomes fall short of deposit requirements in an overheated housing market," Nikora said.

"Mana’s policy would make it easy for whanau to get into a home with less stringent mortgage conditions. Mana’s policy would fully restart Maori Trade Training in all the housing apprenticeships – carpentry, electrician, plumber, glazier, painting, roofing and drain-laying – and provide direct employment to hundreds of young Maori, reversing unemployment of 5,000 in Ikaroa Rawhiti and sending a positive message to those in Australia as well. It is a win-win – our people get jobs building decent homes for our whanau."

Nikora said that Housing NZ had told the Mana Party there was a waiting list of 500 Maori needing a house in Ikaroa-Rawhiti, "even after the list was slashed by National".

"It’s hard to believe that here in the land of milk and honey, in the country where the modern state welfare system was born, people can’t even get a house to live in, but it’s true. That is the responsibility of the state, and government must stand by its obligations to assist those in need.

"Mana wants to build 10,000 state houses a year, 500 immediately in Ikaroa Rawhiti, as a first step to ensuring that every whanau that needs a home can get one, either to rent or to own." 

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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There is a clear precedent for this policy, which is the 1936 RB financing of a the large state housing building program. The RB advanced the government a loan of £5m at 1.25% in order to finance the process. It was very successful.
The options here are similar:
1) As in 1936, RB funds the building at a low/zero rate of funding. 
2) Government funds it at the 10 year bond rate.
For 1 and 2, the loans are repaid when the houses are sold. They can be sold to either individuals or housing corporations. 
3) Government funds it directly with new money (zero interest). This is potentially stimulatory but, again, money can be cancelled on repayment or not, depending on monetary conditions at the time (ie can be redeployed).
This could also be a useful training and job creation scheme for those targeted areas. 

The Mana Party is pushing for no-deposit, low interest, loans to enable Maori first-time buyers to get their own homes.
 
Raf was the policy you refer to a positive discrimination directive or available to all New Zealanders?
 
If there is anyone confused by what I mean when I refer to New Zealanders, can I suggest reading this recent article in the Listener

Stephen,
I deliberately did not comment on that aspect of the policy (as it happens the 1936 policy excluded Maori!). I'll think it's best if I stick to the mechanics of the financing and leave the debate on recepients to other platforms :-) 

I might have it wrong, but from what I understand the State House building programme started in 1936 was John A Lee's baby and funded with new RB issued money. Lee and Savage didn't get on and when Lee was sidelined a few years later, Savage folded to pressure from the BOE and British Government over NZ using public credit in this way (and not borrowing from their banks)

and reading a right wing opion filled rag proves what exactly?
The top 1% is the only group to have very done well in the last 2 or 3 decades, at the expense of the bottom 30% who have done worse and the rest who have tread water at best.
regards

Oh, peachy.  Artificially cheap housing finance, supplied to anyone who can simultaneously provide Maori provenance (how, exactly????) and fog a mirror.
 
Worked out soooo well with Labour's First Rays of Sunlight scheme in the early aughties.
 
I remember very well the exact effect in run-down areas of Christchurch, when that scheme was announced.  It supplied, spookily enough, $100k State-guaranteed munny to, spookily enough, anyone who could simultaneously prove hardship and fog a mirror.
 
Beachside shacks that were marketed for under $50K before that scheme, overnight were on the market for $150K.  And sold....  the sound of CG being trousered was deafening.
 
I'd love to be proven wrong, but my initial reaction is....Will these clowns nevah learn?

They have learned I think....its common to buy votes, National does it with tax cuts and "asset sales" that only benefit their voters or would be voters...
Sadly its strikes me as about the worst case of amoral behaviour Ive yet seen...I'd hoped for better.
regards
 
 
 

In theory this could work. Not sure what kind of house and section one would get for 200K but, perhaps, as these are built on Maori land the sections can be given to the prospective new Maori home owners as the scheme is for their benefit. It would provide employment, transferring money from benefit payments to this scheme which is vastly more positive, and if Maori are happy to build houses on their own lands, why not?
It would transfer tax payer funded housing support subsidies currently paid to a number of families to the scheme although it is likely that more people are needed to run the scheme which will need to be funded one way or the other so the nett gain may be reduced which can limit funds available to some extent. No doubt we can get those numbers.
The sting will be in the last point listed as major points above. It does not matter where you are in the world but if we let the borrower decide what they can afford to  repay (rent or mortgage) in line with their  circumstances the scheme's ongoing finance availability will be limited. And that in turn will reduce its success or doom it to failure completely.
Not listed above, but I presume mentioned elsewhere in the proposal, is what the scheme intends to do with those that default. 
Or is this to be a bottomless pit?

Bottomless pit.  If its built on maori land and not free hold, in effect the land is locked and I cant see a bank wanting anything to do with it, or many punters. Plus the house would be a target for every maori extremist, may even be un-insurable.
Simple really just plead hardship and stop paying the mortgage, no one will be able to evict you and onsell the house.
A free house, whats not to like?
regards
 
 
 
 
 
 
 

This is racism, plain and simple.

I'm inclined to agree with you Kimy. The mention that the land could only be sold again to another Maori is an important detail. 
 
 

Why?  or what do you see as the problem(s)?
For 1) moral hazard. If maori A builds a house for say $200k yet its open market value is $300k Maori A would be "wise" to sell it on the open market and realise $100k, do it twice and the third house is freehold in 5 or 6 years, what a deal!. Other Maori have of course not benefitted they in turn will be demanding such a kick off, rinse and repeat for ever.   Now if it can only be sold to another Maori of the same tribe what then?  Does that then exclude urban maori? lots of messy bits in this proposal IMHO...
2) Who carries the risk of default and loss. ie if a bank takes over the property but isnt free to get its maximum price what then? it just takes the loss even though on the open market it would get all its money back and the ex-owner would have no debt?  Is the Govn the bank?  so it takes the loss in the re-sale? ikky....If its a car loan that goes wrong and the property is the collateral but its un-saleable, or only for a big loss is the Govn left with that loss or the finance company/bank?
OMG is all I can say, congrats Mana a few more policies like this and Labour is probably un-electable in 2014.
regards

These pollies have had lessons on economics from one R. Norman.
 

Wolly dont talk rot.
Show me where the green's housing policy targets minorities with free handouts?  now poor, yes sure...
Or any other party that isnt doing pork barrel politics?  Led by NZF and National....
regards

Wow, that has to be about the most overt vote buying Ive yet seen....doesnt bode well for Labour/Green's in terms of partnerships...  If Green's and Labour dont distance themselves from mana.....how to lose elections in one paragraph.
LOL, la la land, that one...."milk and honey" he's dreaming....though interestingly the 5.5billion on the planet who look at the 1.5billion advantaged probably think the same way.
regards
 

Don't mind me, just a hard working white man that saved for his deposit on a house the old fashion way.

I think you should consider the anger of the poor who have been left behind for some decades.  So they are starting to get upitty and ask for a fair share. The Q is who pays that bill....the rich dodge it, at least for now, so that leaves you and I.
Ask yourself where is the political party for the middle?  The so called left sit on the middle to get our votes but really their policies are left but dont touch the rich.  The right sit on the middle but really their policies are for the right and help the rich.
Either way whichever party is in power you and I who are the majority in the middle who pay the rump of tax have been shafted for some decades and will continue to be so.......
regards

Steven - you have a bizarre way of looking at issues.
 
People have different beliefs and that is the only difference. They then operate under their belief system and that is why you have different outcomes for people.
 
If you always do what you have always done - You will always get what you have always got.
 
 

Well coming from a Libertarian such as yourself I guess thats a good thing, thanks I'll take that as a compliment.
In terms of beliefs, my ones are based on math, science, engineering, data, information. Unlike the bible bashers or political extremists I will change my view if better data, information or math show that is the correct or there is a better course.
Others will it seems just pray harder or shout louder...
"always done" um, what do you think I have been trying to get across for the last 4 or 5 years? that actually we cannot continue to do things as we have done. We will change the only Q is or option to us to how that is done.
regards
 

 
Yes, there were poor people decades ago, and there are poor people now. 
 
That doesn't prove that poor people have been left behind for decades. The same would be the case in a situation where people rise and fall through the income distribution through their own efforts, or lack of effort, and choices.  
 
NZ research indicates that most of the people in the bottom decile, and most of the people in the top decile, in 2002 weren't there any more by 2009.  I googled "income mobility New Zealand"
http://www.treasury.govt.nz/publications/informationreleases/income-deprivation

Funny thing lots of data and graphs to prove you wrong.
regards
 

Which graph or data in particular, and how does it prove me wrong?

These two:
http://www.peakoil.org.au/limits.htm
 
There seem to be some folk of an odd mind-set. You can hammer them with inevitable facts. They go away, pause, then come back as if nothing happened, and it's conversation about business as usual.
 
One guesses it's a self-protection mechanism of some kind. Why some folk need to make their self-protection public, is an interesting en passant secondary question; presumably an iron in the dwindling fires of BAU.

This discussion is about income mobility in New Zealand, that is, the extent to which people move between income deciles over time. Perhaps you could explain further what your link has to do with that.

Actually, no you have attempted to hijack the thread off into a different context.  The % of poor is the same (roughly)  and their increasing disadvantage is increasing.  That some move in and out isnt disputed. 
Lets look at 2 examples,
If you have a look at the US data as a forewarning of here, excess to higher education is now only economic by those who do not incur debt to do so. By economic I mean the debt from the cost of the education now is not covered by the extra wages gained from that education. So infact the so called upward options to move out of being poor across a generation is now being removed.
Recently the NZ govn added an admin charge to student loans ($80 a year?), if you earn so little that your annual payments dont cover that you can never pay it off and in fact the debt increases. I wonder how many ppl WINZ forced to do courses and either failed or never got a decent job?  I know one who I did a course with, he's now a parking attendant at our hospital car park, goes around with a lump of chalk all day....
Second most bankruptcies in the US are now medical care / cost related and I think 75% of those was for ppl who paid for insurance but saw that insurance declined. So as a matter of luck or bad luck you can end up destitute and bankrupt just trying to stay alive (or keep your loved one).
regards

You were the one who said that the poor had been left behind for decades, not me.  I provided a link to data which indicated that that is not the case.  Many people who were poor a decade ago are not poor now.  They were not left behind.
 
Why should I look at the US data as a forewarning of what will happen here?  The US is a completely different economy, and has a completely different approach to financing tertiary education and health care.

As a group we still have poor, we still have poverty, has that groups wealth increased in real terms? no.  Some have moved out, many have not, some have moved in.
All that report comments on is some moved out of the decile and some moved in, it makes no comment I can see that refutes my point that the bottom have been left behind.
So lets start with this,
"New Zealand's biggest growth industry isn't agriculture or manufacturing – it's poverty, a Waikato University professor says.
Social scientist, Professor Darrin Hodgetts, said New Zealand was "growing poverty".
"It's our growth industry and it's growing at three times the OECD average," Prof Hodgetts said.
According to the OECD at least one in five New Zealand children live in severe or significant hardship, while at least one in four children lived below the semi-official poverty line.
According to figures, the richest 1 per cent of the population owns three times more than the combined cash and assets of the poorest 50 per cent."
http://www.stuff.co.nz/national/6753740/Poverty-our-biggest-growth-indus...
In terms of the USA v NZ,
"New Zealand had gone from one of the most equitable societies – in terms of income distribution – to one of the worst."
Thats a nasty trend....isnt it.
So really you are deluded....
regards

Would have though it was obvious. In a a reducing-opportunities-per-head situation, the rich are going to get relatively richer. You only had to note the growing number of 'I own a chain of ten renters' types, to know that. Some of us, of course, realise that the chains are impossibly leveraged, and that even at 0%, there are a lot of dominoes which will fall before parity with reality takes place. Which may skew the trend.
 
http://www.teara.govt.nz/en/income-and-wealth-distribution
http://www.interest.co.nz/opinion/51555/opinion-income-inequality-new-zealand
http://www.treasury.govt.nz/publications/research-policy/wp/2000/00-13/twp00-13.pdf
http://norightturn.blogspot.co.nz/2010/02/some-facts-on-income-distribution-in.html

Who are 'the rich' by the way?

A hypothesis about what might happen in the future does not in any way invalidate my point about what can be empirically shown to have happened in the past.
 
Your links all relate to income distribution.  That is not the same thing as income mobility.
 
 

define income mobility

Here's wikipedia:  the ability of an individual, family or some other group to improve (or lower) their economic status. 
 
The report that I referenced earlier showed that between 2002 and 2009 many people moved between income deciles in New Zealand.  I most certainly would not claim income mobility in New Zealand to be perfect or incapable of improvement.  I don't think there's any country which has achieved that.  But neither is it the case that rich people always stay rich and poor people are stuck in poverty.

Your response in no way connects to the arguement PDK.    .... ??

MdM - poor people - and relative income mobility - think about it this way

A culture shift is being imposed upon the kiwi. In my experience the Maori were not an acquisitive people. Their life revolved around the marae and their kin and the extended family. The extended family value was also a relief mechanism in that it shared the load and shared the burden. And they were happy. Any pakeha who has grown up among the Maori knows this, accepts and respects it, and enjoyed a richer life for it.
 
I have said before on this forum - the kiwi - Maori and Pakeha - are losing their identity.
 
extract from 01 Oct 2011
The here and now is becoming the norm. I agree with some of Reason's points. Auckland has changed dramatically in the space of two decades, due largely to un-planned (un-controlled) growth brought about largely by un-controlled (un-planned) immigration. The qualities that (once) attracted migration are being over-whelmed and changing the place, and not for the better. Reason says he doesn't want the changes being brought in. It is too late. It has already happened. Old-time residents, will be aware of it, but, like the frog-in-the-boiling-pot, it is part of the landscape and not so obvious. To the frequent visitor it is more than obvious.
 
Once upon a time, say 100 years ago, migration from say the UK and Ireland and parts of Europe tended to be the disenfranchised in their own land who sought the potential for a new start in the antipodes, the lands of milk and honey and sunshine. They arrived with $1 in their pocket with the hope of a fresh start. They started at the bottom of the heap and pushed the locals who were already on the heap upwards.
 
Everyone benefitted. No-one was disadvantaged. Now, over the past two decades the game has changed. The wealthy from other countries are arriving as economic or political refugees with economic clout. They come in at the top of the heap and push the locals down economically speaking. They have the economic clout to out-bid the locals. Price no object. The worst aspects are they are arriving at a rate greater than the existing society can assimilate them. They are not assimilating. They are organising into self-help enclaves. That is one very noticeable change in Auckland. The enclaves. It is new. It is foreign. With the consequential pushing of the locals out of their nests, and out-pricing the local new-home creators.
http://www.interest.co.nz/property/55704/acts-brash-slams-aucklands-plan-replace-metropolitan-urban-limit-rural-urban-boundary#comment-645872

 

Not being in Auckland, I can't comment on the points you make about the behaviour or the cultural and social impact of wealthy new immigrants. 
 
I would point out though that the article you link to is about a different point - the artificially-induced constraints on the supply side of the housing market and how that is forcing prices upwards, as happens when demand goes up and supply does not.  The Mana party proposal partly addresses that by calling for more land to be made available to build houses on.
 
 

Either you are missing my point or I wasn't being clear enough
I was trying to address your proposition of economic mobility
That is, moving from one decile to another
 
If you have been following the converstion of the past week ...
 
Try this for an example
 
Here you have kimy who is a 55 year old resident of auckland
He is a player in the property game
He has hocked himself up to the eyeballs
Owns 12 properties worth $5 million with $2.5 miilion in debt
He's rich .. richer than a lot of other people
Last week a 21 year old international student purchased 3 properties in auckland for $5 million cash .. freehold .. no finance
Kimy has suddenly been pushed down the economic totem pole. (decile that is)
Together with a lot of other people

Obviously I have to take what you say about Kimy's personal finances on trust since I don't know him myself.  Yes, he is now one place further back in the order of wealth than he was before.  But he is no poorer in absolute terms than he was before - in fact, he might well be richer, if the value of his 12 properties has gone up as a result of the increased demand.  Further, three former property owners now have $5 million which they value more than they valued their property (otherwise they wouldn't have agreed to sell) so they are better off as a result of the transaction.  
 
Who is worse off - people who want to buy a house in Auckland and can't because house prices are going up.  Yes, this denies them access to one means of increasing their personal wealth.   As previously noted however, that is because supply is not rising in line with demand -  and that in turn is because supply is being artificially constrained by planning rules.  It's not the immigrants who are doing that.
 
 
 
 

The kimy information is obtained from his own postings here
I realise you are a "supply" afficionado .. I'm not .. the question I have is .. should we be increasing the supply simply to adjust to and accomodate the "monopoly game" players who are dictating the terms of the game or should we be setting an entry fee for the players .. and limiting them to "one shot" only
 
There has been enough evidence that a lot of property is literally being taken out of the market and not coming back on as rental inventory .. simply remaining vacant .. taking this game to a different level that is no longer meeting OUR society's need of residential housing
 
Ordinarily I am a free marketeer .. but we have a disconnect between demand which is now .. (and the type of demand) .. and supply which is at best three years away .. what do you do with those who are dislodged in the meantime
 
correct .. immigrants are not a factor influencing supply but the are a huge factor influencing demand

Certainly, reducing demand through regulation would be another way of addressing the present disconnect between demand and supply.  I don't agree that it would be a better way than removing regulatory constraints on supply, but I am sure we can civilly agree to disagree on that.
 
 
 
 

I have been reading through all that. MdM wins the arguement decisively.  Sorry  - but nobody even came close to countering her view about mobility

In your own mind maybe. Iconoclast at 2:31 placed a highly pertinent post that hasn't yet been been answered, or there is even an admitance to a lack of comprehesion.  "I can't comment on the points you make about the behaviour or the cultural and social impact of wealthy new immigrants." You call that a win? I take it you don't get it either, what exactly what the point of you posting then?

The thread started off as one of there being poverty NZ, mdm's view it seems is that thats doesnt matter as the poor can move out if they choose. If yiou read the Treasury piece all it says that some % move out but the same % or more enter poverty.
regards
 

Here's a perfect example of what is happening - it's in your face every day
Check out this article in the NZ Herald - ignore the anti-social stuff
http://www.nzherald.co.nz/crime/news/article.cfm?c_id=30&objectid=10891146
 
What is noticable is
(a) can't speak english
(b) needs an interpreter
(c) owns 4 expensive properties in inner suburbs of Auckland
(d) look at the ages of himself and his compatriots who are 44 and 53
(e) he's been cooling his heels for 2 years and still hasn't bothered to learn english

What I want to know is where they get all the money from

I don't need to consider the anger of anybody. The fact of the matter is its about working hard for your self and motivating your self - not relying on hand outs. 

How does the interest it costs the government to borrow the $200,000 compare with the top rate of the accomodation supplement? If the interest cost is less this could actually save money for the government in the long run. And it has the added benefit of reducing the subsidies paid to private slumlords.

What a can of worms though.  10 year bonds are about 3.2%, so you would want a 25 year bond. The mortgagee would have to pay 3.2% plus capital back over the 25 years.  I cant see it making much of a difference really, all you are cutting out is the banks 2% as the middle man, organiser and risk taker.  Lets say this is done, 20 years later the householder has paid most of that back into a fund to pay that bond off, but the Govn of the day raids it....I mean its easy money for them.  Meanwhile a whole new govn dept has been setup to administer this, oh wait they would have to be maori right?  so hundreds of jobs created out of thin air with I bet little oversight on its competancy....brilliant, just brilliant.
regards

Kimy - are there any land maps providing detail of the two registers?
 

There's very little Maori land on the fringes of Auckland (where, let's face it, the main problem is). Take a look at the map search feature on Maori land online - http://www.maorilandonline.govt.nz/gis/home.htm So the lack of land for housing development isn't due to it being tied up as Maori land. Less than 5% of all land is Maori land, and the vast majority of that is very rural.

I better check my whakapapa immediately!
 
 

Is this New Zealand's Moment of Shame? - Is this what it comes down to
Have read through the lead article again and studied the comments. The comments themselves raise issues that are deserving of further examination - but leaving that aside for the moment.
 
What sticks out most is the subliminal message that this is a "retreat to the reservation" identical to the treatment of the North American Indian at the hands of the "paleface" except this is the Maori themselves seeing a need to retreat to the safety of their own reservations. A day of great sadness.
 
Raf and Stephen Hulme take up one aspect of the discussion
Ms de Meanour and Steven take up another aspect of the discussion
 
Here is a discussion on the continuing poverty of the North American Indian living on Indian Reservations. The connection is pretty clear - Both Nations did not share the Anglo-European concept of Land Ownership. And today both nations are the poorer for it - they have both been left behind.
A look at the bottom 1% Why are Indian Reservations so Poor