Housing Minister announces establishment of interim unit within MBIE to start work on 100,000 affordable homes programme

Housing and Urban Development Minister Phil Twyford says an interim unit has been established to start work on the KiwiBuild affordable housing programme.

Taking the 'first steps' to implementing the KiwiBuild programme was another of the coalition Government's first 100 day promises.

The Government has said that the Kiwibuild programme will reside under the new urban development authority that is planned - but that's some way away as it needs enabling legislation.

So, in the meantime a unit has been set up within the Ministry of Business, Innovation and Employment to get the ball rolling.

“It will take at least a year to formally establish the urban development authority – which will be called the Housing Commission – but we’re not waiting to get started on building the 100,000 affordable houses New Zealand desperately needs," Twyford said.

"That’s why we’ve set up an interim KiwiBuild Unit within the Ministry of Business, Innovation and Employment so we can get cracking now while the legislation to establish the Housing Commission is developed."

He says the KiwiBuild Unit will be responsible for:

► Building KiwiBuild homes as part of redevelopment of state housing land, alongside new state and open market homes.

►Scaling up the building of KiwiBuild homes on underutilised Crown-owned land.

►Purchasing (or underwriting) new homes off the plans in private developments.

►Investigating major greenfield and urban regeneration projects, so that they can be progressed swiftly by the Housing Commission once established.

►Working with councils, iwi and private developers.

►Exploring innovative ways to address current constraints including alternative financing options and construction practices.

"Once established, the Housing Commission will take over as the driver of the KiwiBuild programme.

"New Zealand’s housing market has failed to deliver affordable homes to first home buyers. KiwiBuild’s ambitious programme will provide the opportunity for a step-change in the housing and construction sector," Twyford says.

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?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

58 Comments

Cheap houses are built in factory and assembled on the lot. Land price is another story.

Prefabs are the way to go, but....impediments...reprinted here (it arrived, hehe in prefabricated form) with only dates changed.

The hurdles for prefab builds include:

- The need for a 10-year build guarantee (IIRC) by the prefabber, with associated insurance and backstopping costs
- BRANZ attitude to any new materials certification - many tests, several years, mucho pesos
- The existing Materials Cartel protection of 'their' patch - they can reasonably be assumed to throw various rocks on That path
- The limited number of actual Jobs (especially unionised), as factories tend to be highly automated and work around the clock - won't appeal to the blue-collars seeking work in 'em - or their puppet-masters
- And the land prices underneath are still foobarred by the brown-cardy set via Plans which limit supply, inject Time and thus Cost to development, and which change at glacial speed.

Just imagine the reaction of the current playaz to an announcement like This (thought experiment alert!)

"We are prefabricating a Hoosing Factory offshore. It will be highly automated, needing only a few top-flight technicians to keep it running. It will arrive onshore in February and will commence operations in April. The houses produced from this factory:

- will use materials proven overseas but new to NZ,
- will be manufactured to sub-millimetre tolerances,
- will be built under cover,
- will be assembled in 2-3 days on site by an experienced crew using battery-operated tools.
- The factory is expected to have a throughput of 20 houses per day, and will operate 20 hours per day for 360 days of the year.
- Maintenance crews will be flown in for a 5-day upgrade and maintenance window.
- Unit costs for the houses thus produced are expected to be in the region of $800/square.
- All houses will be serial-numbered and will come with a 20-year guarantee of weathertightness."

Ah, we can dream.....

Good Luck PT, we shall all help in the stock take and count the "Affordable Houses" your team has built in 2018 ...

Yes - and not simply homes reclassified from existing affordable housing schemes.

They need to be real tangible homes that wouldn't have been otherwise built

Mr Twyford is still dreaming about these 100,000 affordable homes!
He should really wake up,and then he will be able to tell the truth.
Firstly this coalition will not be in power for 10years.
Secondly the people who he hopes to be able to sell these houses to won’t have a deposit that is sufficient and Banks will not lend to them as they will not be able to service the loan for these 600k houses.
Thirdly, where are these houses going to be built?
Finally I doubt they will be large enough to House the families as they are only meant to be 100m2 and most of Labour’s desired buyers have probably got 6 or more kids!

Could build them in Christchurch, plenty of red zone land they could reclassify. But the Christchurch housing market is a big of a dead horse eh?

The Man 2,
Twyford a dreamer... of course he is. You know about as much as he does when it comes to the construction of affordable houses/homes. Kiwibuild and the construction of 100,000 standalone houses can happen within eight years quite easily. There were years during the 19 seventies and eighties where 40,000 homes were being built in a year under normal contract completion times. We now classify the majority of those houses as affordable homes the term created from a 9 year National government. Procurement specific to the Coalition government and controlled by the government for all house building materials will slash the cost of Kiwibuild homes for the fhb's. Building 40,000 homes a year is old school. Innovation and the latest construction techniques with US or Euro made building materials and chattels can provide Kiwibuild houses for US $200,000 plus. Fletcher's, CHH and Hardies would need to be placed in secondary roles with Kiwibuild. Their materials prices deserve the same fate as the former Fletcher Challenge. Twyford the dreamer is after 100,000 homes, some houses. For Twyford the dreamer 100,000 Kiwibuild homes in 10 years easily achievable.

Great, no excuses are acceptable then. I’ll help Eco Bird count them.

No matter what happens it can't be worse than Nationals SHA's..

Will be harder than counting the number of extra homes that National delivered in 9 years because they don't exist

up
11

Great first steps, and just such a relief to see a government actually try and take steps to address the housing crisis.
The fact that the homeless percentage in NZ is at 1% is utterly shameful.

There is no housing crisis in NZ.
Standard of living in NZ is very high and ai think you need to go overseas to see what I mean.

You go and buy a rental and rent it out to someone evicted from 10 previous homes for not paying rent. With so many benefits going to parasites of society, and they still can't do something simple like pay the rent, it is shameful that some people can be so useless.

So slumlords are not parasites of society?

Its interesting that Kiwibuild is inside MBIE, who are responsible for the Building Code.
Maybe they can force some changes to the code, and the councils only check compliance with the code, a ridiculous idea.
Tell the councils to butt out, they dont check compliance for the cars.
However, somewhere I saw the comment that automation doesnt lower the price, just increases the throughput by 30%
Not suprising when you consider capital and operating costs for the machines.
On my little street I can find 9 different design philosophies but a single pitch roof on piles and particle board floor goes up suprisingly quickly. It isnt that hard.
I rather like the container design though.

I would like to see the government bulk buy materials that meet the high overseas standards and force BRANZ to accept them. These could then be brought in in bulk at half the local price. Nothing like a little competition to shake up the incumbents.

The government could also quality control the builds rather than the council and provide a self-insured guarantee.

Or just turn ComCom loose on the Materials Duopoly, with a well-funded trust-busting ToR. And adopt Aus or other international standards and bypass BRANZ entirely. It's quite ridiculous that local tests are needed for items to brave our local climate, which is much less extreme than that of (say) Cornwall, Scotland, WA or Queensland.

I enjoy giving the Building Industry a good beating but Im not sure our building costs are much different to the USA, the land of free enterprise and mass markets.
I glanced at US and NZ costing sites and exchange rate adjusted they are similar at around $2000 per sq metre.
Of course you can leave out luxurys like the kichen sink and indoor toilet and that helps with costs.
An economist may want to consider affordability of course but this is just a 2 minute glance

Not in Auckland now. Having recently been required to make an insurance claim it turned out that I needed to be insured for $3000 a sq meter or a rebuild was not possible. Incidentally the land is still worth as much if not more than the house. Good luck in building a decent family sized house in a good area now for less than $1M.

Yes,
But 300 sq metres is probably expectations as well as necessities.
You may expect superior fittings, floorings and furnishings..
We went through that exercise a couple of years ago.

I too would like to see .gov do something (anything) cheaper than a private company which has to survive in the Darwinian environment of capitalism.

Skudiv,
Nicely put Skudiv.
But what if gubbermint contract for houses in batches of 1000 for example and guarantee funding.
And what iif they take authority away from the Territorial Authorities?
Must be worth something, perhaps 15% off materials and labour?
In other words the companies may sharpen their pencils...

It does highlight the need to address monopolistic conditions, however. There's no Darwinian aspect to it if you don't have to worry about competition much at all.

Correct, a lack of competitive accountability creates a magical world where;

(a) it takes longer to do things quickly,

(b) it's more expensive to do them cheaply, and

(c) it's more democratic to do them in secret.

Certainly we do get great results from the government in some areas, too. E.g. Pharmac delivers medicine to NZers at far more cost-effective prices than private industry does to consumers in the USA.

Whereas we face high costs for building materials due to (so the commentators suggest) duopoly conditions.

Government is absolutely required, no problems there. But surely you jest about governments being more economically efficient.

1000mg Vitamin C tablets that cost US $10.99 in New York cost NZ$44.80 online in NZ. That's at least three times the cost.

Do you have some info that drugs are different?

Well, if I'd said broadly that governments were more economically efficient carte blanche I might be joking. Lucky for both of us I didn't, I guess.

You're using a dietary supplement as an example? Why didn't you choose prescription drugs instead, where it's widely identified that US consumers face far higher prices than folk outside the US? E.g. the Epipen, US$600 for a 2-pack in the USA vs. US$69 in the UK, back in January?

Do you have some info that suggests prescription medicine in the USA is cheaper on average than in other countries?

Oh, I don't know, I quite like jokes.

I didn't know where to find reliable pricing that Pharmac pays for any comparison on real drugs, so I used something in the health space that's easy to verify.

https://www.productivity.govt.nz/sites/default/files/Final%20Housing%20A...
About page 9 they discuss the factors affecting affordability
They don't dwell on limited competition.

in fact limit the TA to recession planes and the 3 waters.

So they've taken how long to announce the setting up of a committee?

Exactly the letsundothis campaign has just started up, more grief for the team that’s only talents appear to be to spend, form committees and repeal laws. They will be scrutinised on every misstep. You can tell it’s getting to them as left leaning posters in other public forums are emploring people to give them a chance to govern. Yeah right.

Along with reduced immigration, no foreign buyers, future increases in interest rates, another crack in the dam. Wonder how many cracks the dam will take.

You're really winding up ttp, ain't you? ;)

TTP should be proud, the trolls are mentioning him in threads he’s not yet posted in.

you sound jealous

I am to an extent. DGZ, Zachary, TTP get all of the attention.

that's because you're not as much as a troll as them ... lol

Sorry, but the experience of Labour MPs in being successful financially is pretty much nil, and yet they are making these decisions for NZ.
They are going to come a cropper in this coming year, and you heard it from “The Man”.
You can’t keep making up these policies and have something to counteract the spending, because it doesn’t work!

It's ok, the money for this will come from:
- ring-fencing property investments
- 5 year brightline test
- future wealth tax

You and your mob have had your snouts in the trough for 9 years, the benefits of which you have regaled us with for the last couple of years, and now you suggest its all due to the smarts of you and yours - wow

Time to give over and let someone else a turn at the trough

This is exactly the sort of comment that is ad-hom, divisive, and very off-putting to those of us who value intelligent, reasoned discussion on this site.

TM2 is simply pointing out that property, in his (InterWeb monicker big gender assumption there) experience of it, has served him very well. If you substituted 'Corner Dairy', 'Car Repair Shop','Horticulturist' or any of a thousand other occupations, no-one would take any exception. And pointing out that, as per our fave cat-hater, that Property has tax advantages is no defence. Those advantages are the law of the land and anyone is entitled to operate within them.

Your argument - "give over and let someone else [have] a turn at the trough" can be re-stated in a historical-rhyming POV as

"Liquidate the kulaks as a class".

And look how well That ended up....

TM2 and his ilk are not only trying to tell us they have made good incomes from our property market but they are also attempting to talk it up while disregarding the fact that this is totally irresponsible. Indeed, from my perspective absolutely unethical. Our property ponzi if it continues as it has, will eventually crash and very possibly bring much of our economy down with it.. The longer it continues, then the greater will be the crash. The very fact that they persist in spruiking the market is that they have too much skin in the game and have much to lose. It astonishes me that they persist. Surely very very few contributors and readers here will be taken in by their propaganda.

Didge the housing market is alive and well throughout most of NZ and good returns are still available.
Agreed very few on here will be taken in by positivity as many Just love to talk negativity!

I repeat, surely very very few readers here are likely to believe such baseless propaganda.

Didge, it's a fair assessment that those who put all their eggs in one basket will only talk about that one thing, so as to keep their ponzi - pyramid dream alive. It's their way of allaying their own insecurities and draw in as many Johnny's as possible to keep the dream afloat.

In the absence of such shallow dreams, the only way forward is common sense and logical thinking - some find this process too difficult.

I'm confident that very many readers would find THE MAN 2's advice on the property market to be very sound. Buy at the best price possible and start renting it out for a positive return; a scenario that is possible in Christchurch.

Even the Chinese property bulls in my chch office are saying there is no money to be made in chch because of Jacinda. I get much schadenfreude when all these landlords are ticked off. Labour must be doing something right.

Can you hear my peals of laughter all the way down there on the shaky plains!

Does seem like NZ's getting more partisan eh. Feels like the right is going full on Tea Party now, with National seeing their job being to obstruct and prevent things from happening, and their followers and disciples being out in force to support it.

Pretty much correct. Although I’ve always voted National, before this last election I’d never been a Party Member or contributed to their coffers. Now I’m involved and it feels good. Like coming out of the political closet. I don’t doubt that I’ve lost fringe acquaintances from being more vocal, but I don’t give a fat rats. The best bit is once people know what your views are they talk up about their own. 46% Is a great base to build on. All we have to do is bring a couple more percent over from NZ First and it’s all on.

Interesting, on the flip side all anyone else has to do is pick up the wasted TOP and other leftish party votes, nick a couple of percent from National and NZ First, they're home and hosed.

Bearing in mind National voters tend to be older, how's the growth amongst the young going, to replenish the stock so to speak?

How many of that 46% voted for the devil they knew, how many are at risk of quite liking their dalliance with this particular devil and switching to this devil they now know? Seems remarkably chicken counting-y to me.

My concern is that further down the road does lie the rather ugly partisan example that the USA embodies now. National's pure obstructionism where they seem to have outright conveyed that they're going to try to prevent things being done...coupled with the veering toward almost outright propaganda...well, interesting times ahead, I guess.

The Republicans embraced this ultra-partisan model and it's kinda bitten them in the hiney now. This is a really interesting documentary on it, especially the comments of Republican strategist Frank Luntz and former speaker John Boehner: https://www.youtube.com/watch?v=AyloY0AexbM

National will likely need a partner party beyond ACT. They might be dreaming to think they can hold over 50% of the vote by themselves. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11957692

I recall watching Mike Moore in his 1990 concession speech, seeing the enmity towards National and thinking there is no way these parties can play nicely. It’s been that way for the next 27 years except for Key’s inexplicable support for Clark’s ambitions outside NZ. The current government has made indecent haste in unwinding laws, some of it playing to their support base e.g. the school starting age. The 100 day Plan is dated management mumbo jumbo. I don’t rate any of the Government ministers at all. Hopefully enough of the existing government support will agree at the next election to put this accident behind us.

Waymad, property investment has absolutely no tax advantages over other business’s.
Not devisive comments at all!
What this site is designed for is to help people make financial decisions.
The reality is that many on this site definitely need financial assistance, and My suggestion is that they get alongside people that are financially independent to improve their lot!

I hasten to add, TM2, that my barb was pointed at 2otherguys. I'm in your camp, although not a property investor. Agree with the point of the site. But it seems to have become infested with common taters who add nothing to the threads but engage in ad-hom slurs and political point-scoring. I'd volunteer for a moderator's task but value my sanity too much........

The forum is an opportunity to debate points and everyone’s perogative as to what they beleive or want to beleive.
The worrying thing for me is the continued negativity towards the country’s property investors who have every right to purchase property to rent out to people who don’t or can’t buy!
This has been going on for many years and until recently they have been wrong.
Wish there were more participants from around the country than just Auckland because it would paint a far better picture of the situation.
I can tell you now that property investors are not bad people and are just going about trying to improve their financial postion, which everyone has the opportunity to do, if they wished to!

You have it all wrong TM2, clearly anybody who provides housing to anybody else is a evil doer.