By Alex Tarrant
Housing was the name of the game for our politicians Tuesday, as the Minister for Social Housing and Housing NZ, Amy Adams, launched a project to build on vacant land in Wellington’s Hutt region, and as Question Time contained a handful of colourful exchanges on the subject including the PM praising Building & Construction Minister Nick Smith for an outstanding job.
We saw the return of National's "planet Labour" attack line, questions on just how to define housing affordability and claims of cynical election bids.
On Tuesday morning, Adams announced a project to build and refurbish over 700 homes on Crown land in the Hutt Valley, as she kicked off the government’s ex-Auckland housing roadshow. The building of 30 new social houses will begin immediately, while “master planning” will be drawn up for a further 300 homes; 383 existing homes will be refurbished.
On a completely separate note, Hutt South is a marginal seat National has targeted to take off Labour on 23 September.
Back to the announcement. Sticking with the precedent set in Auckland, a third of the new homes being built will be social housing, at least 20% will be classed as ‘affordable’ and the rest – just under half - will be market housing (or "unaffordable" by definition of not being classed as affordable, as Labour would like pointed out).
Labour Party leader Andrew Little on Tuesday morning said the announcement was “a very last minute, desperate election bid.” He attacked Adams for not being able to say how many affordable houses could be built.
In the House later, Labour’s Phil Twyford asked Adams how many of the new houses would be classed as 'affordable,' to which she replied at least 60. Adams was able to get a dig in at Labour, too: “130 will be social homes, which I know Labour aren’t interested in,” much to the bemusement of the those across the aisle.
Labour in April promised 400 new houses in the Hutt Valley – 100 social housing units and 300 KiwiBuilds, which it said would be sold for between $200,000 and $350,000 each.
Going by the government’s Auckland ‘affordable’ criteria being the Welcome Home Loan scheme cap for a new build, those 60 residences could cost up to $550,000, be in some of the lowest income areas in Wellington and still be classed as ‘affordable’.
Andrew Little earlier in Question Time had asked Bill English about whether the government had kept tabs on the amount of ‘affordable’ houses built in Auckland’s Special Housing Areas, following on from Nick Smith’s Radio NZ interview that morning.
English said he would expect the Auckland Council, “who argued vigorously for those requirements,” would collect the information. He then took to promoting a bunch of other figures, including 5,000 consents for new homes in SHAs, 10,400 consents issued over the last 12 months in the city overall, flat house prices over the last nine months, and improving housing affordability according to the Massey University measure.
Little retorted with his next question: “Focussing just for the moment on things people actually live in, called a house,” why couldn’t the government say how many affordable homes would be built in the SHAs?
Again, the Auckland Council was in the best position to do that, English said. “The government focuses on the broader picture of housing affordability, and with flat house prices and rising incomes, housing affordability is now gradually improving.” Cue a dig at Labour opposing Point England.
Little asked whether overseas speculators would be allowed to buy any of the new Hutt houses, or those built in Special Housing Areas. “And if so, why does he allow that?”
English’s answer was always going to create disorder. “I know the Labour Party is very focussed on, I think, the three percent of overseas resident taxpayers…who may or may not be what he calls speculators. What you know is that, in a market where more supply is coming to the market, more quickly than ever, and house prices are flattening, then the room for speculation is very minimal.”
How about Corelogic saying sales to first home buyers was at its lowest level in 20 years? There may be arguments about what those numbers represented, English replied. “What we know is that the housing market is going through an adjustment. And that will have…[Labour interjection]…the members were against the prices going up, and now they’re against them not going up. Which is, on planet-Labour logical, I suppose.”
Encourage Smith to at least be mediocre?
Little turned to Smith’s interview Tuesday morning. Given English must agree with Smith’s self-assessment that he is not a miracle man, “could he encourage Nick Smith to at least become a mediocre Minister who actually builds some affordable houses?”
The PM had clearly prepped for such a question. “Minister Smith has delivered Special Housing Areas, HomeStart grants, new Auckland unitary plan, Crown building programme in Auckland, National Policy Statement on urban development, RMA reform Bill, unit title corporate reform, urban development authorities, and Building Act liability reform.
“What an outstanding contribution from a team led by Nick Smith,” he said. Cue laughter and a cry of “only Maggie clapped,” coming back at him from the Labour side.
Who is counting what affordable homes are being built?
The Greens’ Metiria Turei was next, taking on Nick Smith about how many affordable homes would be built in Auckland’s Special Housing Areas. SHAs were making a huge contribution to increasing housing supply in Auckland, Smith replied.
“We do not record the sales price of new homes in Special Housing Areas, or newly zoned areas under the new unitary plan,” he said. However, some information on sales prices in government-initiated developments. At least 400 of the new homes in government-led special housing areas were sold for prices under $650,000.
Turei tried again. If neither government nor the Council were doing so, “is anybody counting how many affordable homes are being built in Auckland in the SHAs?” Smith relied on agreement between the Productivity Commission, the Auckland Council and the independent hearings panel that “trying to use the Resource Management Act to regulate a portion of affordable homes was unworkable and would not work, and that what we needed to focus on was the overall level of affordability.”
A ‘patsy’ question from an Auckland-based National list MP the party is seeking exposure for ahead of the election allowed Smith to put his own figures across. There was record home construction in Auckland. The latest Stats figures showed 2,794 homes were consented in May – the highest for any May in 40 years, up 20% from a year ago. Meanwhile, house prices in Auckland had been flat the past nine months, and improvement in the Massey index again. The data showed National’s policies were on the right track, he said.
A brief exchange on the purpose of the SHAs, then Turei asked Smith whether he stood by his line from the morning that affordability was in the eye of the beholder? “It is absolutely true that what is an affordable house does vary depending on a person’s circumstances. And the fact that there has been 5,000 homes in Special Housing Areas that have been built...”
Smith turned to Labour: “...and I note that Mr Twyford is interjecting. They announced the policy four years ago, saying affordability was $300,000. Then they made it $400,000, then they made it $500,000. I’ve seen three figures from that member as to what he thinks is affordable.”
“That’s because of you!” Twyford yelled back. Prices were rising so much every year that the caps had to be lifted.
You can also watch Labour's Kelvin Davis question Maori Development Minister Te Ururoa Flavell on Maori home ownership here: