Affordable housing front-and-centre in Parliament Tuesday: Amy Adams announces building programme in (marginal) Hutt Valley; English says Nick Smith and his team are doing a great job

Affordable housing front-and-centre in Parliament Tuesday: Amy Adams announces building programme in (marginal) Hutt Valley; English says Nick Smith and his team are doing a great job

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:

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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....and we believe you Billary because?

17
up

Who says - one of their own who are the reason for this housing ponzi.

May be they believe : Say lie 100 times and it become truth or atleast people start feeling it. Election time.

17
up

May be they knew today's headline.

FHB BUYER SHUT OUT OF AUCKLAND MARKET.

Heard a statement / logic today by one of national supporter Mark - sport presenter - Why do FHB buyer worried about buying a house, just rent it.

Now they are saying that one should not even dream of owning a house. Think and Vote.

It is this attitue that has to change by voting for change.

Arrogance has to be humbled.

11
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True. Surely anyone who didn't believe that National have outright sacrificed young Kiwis' chances for the benefit of their older voters who worked hard to be born at the right time should be acknowledging reality by now.

If it's a choice between older voters having a reduced investment portfolio and reasonable housing costs for Kiwis, National's only choosing the first group.

Young Kiwis, vote National and #RentTillYouDie

Young Kiwis is so last century Rick, they are young Global Citizens now. A place for them within the Empire is assured if they commit to thirty years hard labour in the corporate salt mines, show extraordinary entrepreneurial skill or achieve top five percent in the indoctrination academies. I too was a naive young Jedi Knight but now I have gone over to the Dark Side. If you get in early you can get a high ranking position in a Death Star Global City. The Zeitgeist has decreed it so resistance is futile.

If that was indeed an opportunistic troll to an emotional online comment, it did exhibit elements of creative flair. For that, you should be commended.

In fairness, some on here do see some parallels between the Auckland housing market and the Death Star, with perhaps the Irish housing market being one of those earlier-build Death Stars.

The youth are supposed to be the Borg as baby boomers forever complain about their cybernetic interfaces and avocado dependency (I assume they are borg food).

This election will be / should be different as young are more aware.....hopefully

I think the young aren't there yet. They're still not hurting enough and there's not yet a demagogue up to the task. But I wouldn't be surprised if we're not too far off a nationalistic backlash in future as they realise how much National has sacrificed their chances for the benefit of the oldies...

Labour were the Nanny State, but this lot are proving to be the Granny State.

good comment Rick. I too don't think the young are there yet and won't use the power of the vote. Pity. As an official oldie myself I would say that I have a 'nationalistic backlash' against the simultaneous destruction of our environment and economic welfare both. I would describe myself as an economic nationalist, is that the fences to need to go up and we do need to protect ourselves. The global approach has not produced for folk although it seems to have produced for the very few. example. What value a bigger GDP if it leads to reduced incomes.
I don't think the contest is between young / old ( I would say that. LoL ). I think the contest is between New Zealanders and them over the border.

Yeah, you're right - it's not entirely between generations, as many in the older generation are not benefiting from National's direction either, and many also have to choose between enjoying the wealth tied up in their house and consigning their children to not owning their own home, or passing the wealth on. I know a great fellow who has a stunning old villa in one of Auckland's better suburbs, works in the building industry, and is absolutely furious at how National has allowed Kiwis to be displaced by investor and foreign demand (which from his visibility in the industry, is bigger than National acknowledges...but everyone knows that - Nick Smith would likely contend that foreign demand is in the eye of the beholder).

Edit: I should add...he has too many children for the villa to be adequate to keep them all in the market. So now file having more than two children under "poor life choices", apparently.

haha. If Nick thinks foreign demand is in the eye of the beholder, that demand is probably a sharp stick.

nearly fell over choking on my cereal, BE is such a comic, next he will be telling jokes about brownlee or bennett

http://www.stuff.co.nz/the-press/business/the-rebuild/9973853/Christchur...
https://www.tvnz.co.nz/one-news/new-zealand/housing-nzs-new-boss-in-blun...

Some amusing coverage of National's bemusing attitudes to housing and transport here.

National ministers perhaps showing their antiquity a little.

When it comes to cities NZ is head shakingly stupid. Most kiwis do not have a clue and this government in particular with its denial and distraction is not trying to change that. A few people -like David Hargreaves, Alex Tarrant, Transportblog (now GreaterAuckland) and some other websites try to educate kiwis but mostly it is a hard slog against disinformation and apathy......

I've been banned from Transportblog (now GreaterAuckland).

Auckland planning is awfully expensive, because it drives up land costs too high to allow development. Auckland planning is awful, because it relies on huge expanses of countryside around exurban towns being converted to sprawl. All critiques, provided with factual evidence of course.

I was asked to leave.

The site cheerleads for extensive new funding for Auckland transport costs, using selective information.

Thank goodness you're banned. I wouldn't go near that blog.

This is Trumpism at its best which has obviously spread way down to the antipodes. I will say what I like because it must be true because I am saying it. Before you know Bill will be shearing Patrick Gower on Facebook or similar.

National has screwed up immigration is an humongous way that has got us into a housing crisis of epic proportions ( and they did not even tell , hint to us, or advise us of these intentions or what they were doing behind the scenes )

That said, Labour is not really inspiring much confidence for voters , they say the want to maintain inward migration levels , their "affordable" housing policy is no such thing , and simple arithmetic says it cannot work.

Affordable to who ?

Median house prices in Auckland were recently double the " affordable" level , and even if it halved ( which it wont ) its still too expensive

An affordable Labour -built house at $550,000 with a $100,000 deposit its not in many young family's reach or affordability .

And who is going to build all these houses , because we are going to need 3 of them for our offspring , and I intend to be among the first in the queue if it ever comes to pass ?

I am not holding my breath , however .

Couple of thoughts, though. Like you, I haven't decided who to vote for and - surprisingly enough to some, I imagine, I'm a long-time National voter now dissatisfied with their performance.

Aren't Labour suggesting cutting immigration to 30/40,000 per annum? It's a start, surely.

Wouldn't a government build be able to benefit from economies of scale, and - besides that - does it matter if the taxpayer builds more housing stock at a slight loss, for the benefit of many? And wouldn't this increase in housing stock and the signals it sends to the market serve to reduce the attraction of property as an investment?

Also, I thought they stated they'd remove negative gearing - that double-dip where an investor gets to pretend they're a business in one situation, and pretend they're not when it comes to tax on what are really profits.

I mean...dunno who I'm going to vote for yet, but these things seem better than National's studiously avoiding doing anything except feeding the housing bubble for the last nine years, coupled with cynically denying any crisis exists after having campaigned on the urgent need to address said housing crisis.

Wouldn't a government build be able to benefit from economies of scale, and - besides that - does it matter if the taxpayer builds more housing stock at a slight loss, for the benefit of many?

Everyone can benefit from economies scale, by building homes at the existing large economy of scale that is Auckland City.

This forms part of the core of the Labour Party's housing policy (Phil Twyford), where they plan to eliminate the RUB of Auckland - reduce the land cost component and increase the economy of scale for production.

This runs completely counter to the Labour Party's housing policy (Phil Goff), where they purposely restrict building using the RUB of Auckland - hiking up land costs and diminishing economies of scale for production.

I feel I should vote for Labour policy, but I hate what Labour has done to Auckland.

If this all sounds too weird to be true, it probably is.

The Labour Party of Phil Goff vs the Labour Party of Phil Twyford.

How does medium work, that's the middle isn't it, so if most of Auckland was doing ok in sales and the lowest was say $500,000 and the highest say $2,000,000 is the medium $1,250,000, please till me if I'm wrong, so if Auckland was still doing ok and some houses weren't far over $500,000 and thousands of houses sell for say $1,000,000 but 10 houses sell for 5,000,000 does that mean the medium is $3,250,000, if this was a average the number would be around $1,000,000, Also seeing how many of the cheaper housing areas have sales dropping a lot, so figures are being seen meanly in areas $800,000 to $8 million or reading on auctions on mainly apartments, mediums and averages used to suit the authors goals, there's always 2 sides to houses prices, up and down, ok up and flat, people with a house and people who haven't yet, home owners cheering the market up and FHB cheering the market down, banks, RE , media, national cheering prices that are utterly peaked and FHB, and there supporters that are losers doom and gloom, told to go live in other city etc, it's identical and fear to cheer both ways , I must say tho i do feel very sorry for a lot of investors that are so leveraged up and understand why there comments are so harsh about people talking down the market when they have so much to lose, where FHB only have the hope of ending renting

It's not the price in the middle, it's price of the house in the middle of all houses that sold.

I.e. if 11 houses sold for various prices, it's the price of house number 6. Less skewed by outliers than the average.

Interestingly at the moment, we're seeing very, very low numbers selling in Manukau auctions, and more selling in central suburbs...so perhaps that's keeping the median a bit higher than what it otherwise might be.

I think the term you mean is median, not medium.

If we have the numbers 1, 4, 6, 7,9, then yes, the median is the middle number i.e. 6.

So yes, if we have lots of sales in the 500s and a few in the multi millions, then the median will be in the 500s or a bit higher maybe. Whatever value is in the middle.

Average, is a different thing where you add up all the numbers and divide by how many numbers there are, so in the above example, 1+4+6+7+9 = 27. 27 / 5 = 5.4.

So they don't always give the same number, and yes, reporters probably use the one they like best for their article.

I find it so ridiculous that back benchers of a party can ask their more senior members questions which go something like "What positive points can the housing minister..."

To which the minister in question stands up and spouts forth on what a wonderful job they're doing.