'Kiwibuild needs expert group set up'

Property

Salvation Army questions ability of government departments to handle the flagship house building plan; seeks establishment of group to deliver houses 'quickly and at affordable cost'

28th May 18, 3:13pm by David Hargreaves

The Salvation Army's casting doubts on the ability of government departments to deliver on the Kiwibuild affordable housing programme and is calling for establishment of an expert group to deliver the required houses.

A media statement from the Salvation Army said that "growing uncertainty" over whether Kiwibuild can "reignite the Kiwi dream" of homeownership needs to be countered.

"Recent reports from Treasury and The Chief Executive of New Zealand Certified Builders indicating the programme may not be able to deliver the housing required creates uncertainty for families who see Kiwibuild as their path to homeownership," the statement said.

"In the middle of the worst housing crisis New Zealand has faced in at least two generations, such uncertainty has an adverse impact on affected households.

"Kiwi families need to have certainty about Government plans to provide the level of housing required in the next five to ten years.

"The Salvation Army is calling for Government to set up an expert group, charged with delivering the required number of Kiwibuild houses quickly at an affordable cost for families needing them. Government departments are not presently well equipped to direct the Kiwbuild programme.

"The Kiwibuild programme needs to be directed by New Zealanders who have between them a wide range of high-quality skills. We urge the Government to urgently convene such a group so that the KiwiBuild concept can deliver as quickly as possible this homeownership housing."

National's Housing and Urban Development spokesperson Judith Collins seized on the Salvation Army statement, saying it indicated confidence in KiwiBuild "is rapidly fading, with the Salvation Army the latest group to lose faith".

She said the Kiwibuild plan was "ill-thought through and it’s not delivering for New Zealanders".

Earlier on Monday Westpac economists suggested the Kiwibuild strategy would be a "slow grind".

Doubts have emerged about Kiwibuild's ability to deliver 100,000 affordable homes in 10 years following Treasury forecasts that have been the subject of a very public falling out between Housing and Urban Development Minister Phil Twyford and the Treasury officials, referred to by Twyford as "kids...disconnected from reality" - a comment that saw him pulled into line by Prime Minister Jacinda Ardern.

The spark for this firestorm was Treasury's assertion in the Budget Economic and Fiscal Update (BEFU) that: “Changes in the timing of capital expenditure on KiwiBuild since the Half Year Update (HYEFU) mean the boost to growth occurs later in the forecast period than previously assumed.” Accordingly, it believes a greater portion of investment will occur after 2022 than previously expected.

Twyford had told interest.co.nz's Jenée Tibshraeny that Treasury’s maths was “simply wrong” and he pointed to a paper the Ministry of Business Innovation and Employment (MBIE) had given him that showed, while Treasury believes that $2.5 billion will be spent on residential property investment in New Zealand between 2018 and 2022, MBIE put this figure at between $4.8 billion and $11.6 billion.

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31 Comments

by NoFax | 28th May 18, 3:24pm 1527477890

I guess the Salvation Army are another group of right wing trolls.

by Grendel | 28th May 18, 3:39pm 1527478792

Agreed,

The salvation army calling BS on this Kiwibuild shambles! Wow...its all I can say.

I never saw that coming. Bank economist definitely, Treasury sure, but this! I was worried before, I am afraid now.

by Roger the lodger | 28th May 18, 4:00pm 1527480029

*omnishambles

by Boatman | 29th May 18, 4:36pm 1527568574

Kiwishambles

by Yvil | 28th May 18, 9:57pm 1527501441

by Yvil | 28th May 18, 3:31pm 1527478294

So setting up yet another working group, that we pay for, is the way to go? I naively thought that the government knew what it was talking about when it promised 100'000 new affordable homes in 10 years.

by Advisor | 28th May 18, 3:52pm 1527479520

Auckland Council reports that the entire city saw a 7,200 increase in the city's overall housing stock in 2016. If you were naive enough to believe that a government with no experience in residential construction would magically build the same number of houses under its own brand each year, then you had another thing coming for you. Now they want brownie points from us for over-committing during elections and failing to deliver once in office.
There has been no actual or proposed change in the migrant profile since Nov 2017 to start with. Unless we want incoming bakers and cooks to build us houses of cakes and lollies, we can't be sure if the government even has a plan in place.

by Pragmatist | 28th May 18, 4:04pm 1527480282

Don't worry, the younger generation will solve this problem.. they'll start packing their bags and heading overseas in large numbers soon.

by pacifica | 28th May 18, 11:32pm 1527507128

What makes you think that they haven't already been leaving in droves for better jobs, with better pay and achievable housing?

by Boatman | 29th May 18, 4:38pm 1527568731

THEY ARE LEAVING ALREADY ........... the 65,000 net immigrants YTD are hiding a serious number , the awful truth is that year to date nearly 100,000 non-New Zealanders actually took up residence here .

Now if that does not scare the hell out of you , then nothing will

by RickStrauss | 29th May 18, 5:02pm 1527570164

Population replacement to serve the older Kiwis. Young, poor migrants to staff the restaurants and businesses for low wages, and rich older migrants to bid the house prices up.

by Pragmatist | 29th May 18, 6:40pm 1527576050

I said large numbers... you ain't seen nothing yet.

by Auckland | 28th May 18, 3:40pm 1527478834

Deutsche Bank lays off 10k employees, maybe John wheeler was correct in saying 2018 is the year of the crash ! Forget about Kiwibuild, homes will be cheap soon.https://www.youtube.com/watch?v=pKO-cNnWV98

by dictator | 28th May 18, 5:28pm 1527485300

Deutsche Bank has been in trouble for a long time and violating capital requirements pretty much since the GFC.

by Fritz | 28th May 18, 6:01pm 1527487277

One must question that bank's judgement when they rate Wellington most liveable city two years running.
Now, Wellington is my hometown and I am fond of it but that rating just doesn't seem credible to me.

by dictator | 28th May 18, 8:13pm 1527495233

The CBD isn't very livable anymore. Most have moved to Newtown or similar for rent they can afford.

The evaluations of any NZ city don't stack up when banks claim that a large part of our economy is based on cryptocurrencies when that's not even close to reality. Easy to say a place is the most livable if you've never been there.

by pacifica | 28th May 18, 11:40pm 1527507609

No bank has ever claimed that but please continue with your passing relationship with reality. It amuses me greatly. In many cases you can do a what is called research to fact check but given what you said I worry your standards would include conspiracy theorist blogs that also believe in lizard people in that list. Here is an idea, the banks publish their statements, financial data and much of it can be found on this site. Now even if you used this site as a source you should be able to find anything at all to indicate anything on that remark, (even the cryptocurrency investment sites & local exchanges haven't gone that pants on head but nominations are open for the wooden spoon award).

by waymad | 28th May 18, 4:55pm 1527483344

Full marks to the Sallies for looking behind the KB Potemkin Village facade, and seeing the grim reality. Sticks, straw and hot air.

But not so sure about an 'expert group' - I thought we had experts in building, land and infrastructure development scattered all over the shop anyway - some even advertise on TV! Shurely we just need to remove all the rocks currently in their path to KB Glory, fund 'em with OPM and let 'em rip? That's what this Stuff article seems to be saying.....

by Brendon | 29th May 18, 5:02am 1527526962

I think KiwiBuild is good in the sense that it means the government has to find the obstacles that stop the market from building more affordable housing and remove them. If they don't then KiwiBuild cannot reach its targets and the government loses political credibility.

My personal interest lately has been to look at the obstacles preventing Auckland and other similar Anglo cities from building more intensively. I think there is an opportunity from doing that analysis to help KiwiBuild and the wider housing market.

It may not be a silver bullet but it would certainly help.
https://medium.com/land-buildings-identity-and-values/can-great-design-…

by Brendon | 29th May 18, 6:07am 1527530854

I estimate that through my Master Planned Block approach the section or land cost of new KiwiBuild and market rate houses could be reduced down to approximately $225K in the urban areas within walking distance of Auckland's western rail corridor.

by bilbo | 29th May 18, 11:25am 1527549944

Nice article Brendon. Perhaps Labour should fire Twatford and put you in charge.

This is what we don't want: https://www.stuff.co.nz/business/94418443/christchurch-leads-cooling-ho…

Lots of flat stand alone houses surrounded by 3 meters of shady land on each side. There is no sunny green space in subdivisions like Wigram skies. 90% of the ground is covered by roads, roofing or shade from houses and fences.

by Brendon | 29th May 18, 11:59am 1527551996

I actually applied for a job in MBIE, in their urban performance branch but did not get past the interview stage. I suspect my problem was more that I didn't fit into the MBIE culture rather than anything to do with Phil Twyford.

Re the crap being developed in Wigram and such like. I don't get it. Why not make half the development medium density 2-3 story attached housing -with bigger back yards and rest proper stand alone housing?

I just think there is bugger-all competition in the housing/construction market and consequently prices are high, quality is low, customers have little choice.....

by bilbo | 29th May 18, 12:14pm 1527552855

Spot on. They have little choice. Why else would people settle for a 400sqm section with the neighbours a cat-swing away. I was searching for housing a few years back. I took one look at Wigram and it was obvious this place would become something of a ghetto in 20 years.

I guess the MBIE culture is very bureaucratic and lazy? The building code is an absolute dogs breakfast.

People are starting to consider tiny houses away from all this utter bullshit. The people running the system like MBIE and councils would rather people live in cars than an affordable efficiently built housing.

by THE MAN 2 | 28th May 18, 5:49pm 1527486579

I think we should set up a working group that will costs millions to decide whether we should should set up another group to put together another group to build these so-called affordable homes for people that can’t afford them!

Surely this new COL can deliver on their promises?
Why would the Salvation Army not think that Twatford and Jacinda can fulfill their promises, why not.
Because they have not done anything of any true value for the country since they have been in power!!!

by Fritz | 28th May 18, 6:05pm 1527487512

Well done Sallies for highlighting a big issue once again.
I don't agree with an 'expert group' though.
Rather there needs to be a government ministry solely focussed on kiwibuild. The ministry should be largely administratve, leaning heavily on private sector consulting and construction expertise

by Brendon | 29th May 18, 5:11am 1527527467

I think the point is the Ministries that do exist like MBIE, Environment and Treasury that have had 9 months to do the analysis on how to implement the government's housing policies have not done it.

These civil servant departments with thousands of employees, vast hierarchies, big budgets.... what are they doing?

If they do not start delivering then they will need to be replaced with something that does work...

by Zack Brando | 28th May 18, 9:31pm 1527499880

New Zealand is full of sleepy Hobbits. Some of us are 'woke' and actively exchanging our complaints for an airfare to Australia. New Zealand doesn't work for everybody .. namely traditional renters, workers and first-home-buyers.

KiwiBuild might benefit unemployed parents, elderly living in rental accommodation and cashed up first-home-buyers. Not seeing much of a benefit for anyone under 45. Hopefully KiwiBuild turns out great but it's too little too late IMO. If you're living in our cities, not tied down and wanting a better quality of life - Australia could be for you.

Too many complaining Hobbits here, don't be one of them. Complaining will just get you down, rather make a plan.

by Uninterested | 28th May 18, 8:12pm 1527495143

"Complaining will just get you down"
Well said

by Bluff | 28th May 18, 8:10pm 1527495029

The premise of supply to meet demand to address affordability is out the window. Some one grow the balls to push the reset button.

by Brendon | 29th May 18, 6:26am 1527531999

The problem is not with the premise but with the implementation. Only Greater Christchurch has had a true building boom. Where the build rate exceeded 10 new houses per thousand people. And not surprisingly Christchurch house prices plateaued and rents fell.

Auckland has difficulty using the Christchurch urban growth model though. Auckland has tapped out most of its peripheral sprawl options. All the planned motorways have been built and they struggle to cope with existing residents and have little ability to ramp up to cater for more fringe growth housing.

Auckland needs to solve the problem of how it can do density well. If that is not part of the competitive supply solution for Auckland (Wellington too due to geographic constraints) then in my opinion New Zealand will not solve this housing crisis.

I am not against some fringe development as Hugh Pavletich used to say -to provide a supply vent. To prevent house and land prices escalating which would feed a land banking business model. But the bulk of new housing in Auckland should come from intensification adjacent to the developing congestion free rapid transit system.

by Boatman | 29th May 18, 4:35pm 1527568545

You know when the benevolent members our our society , in this case the Sallies point to the Emperors naked state , then its game over .

Its clear that Kiwibuild is a major con job , we still dont have a clue as to the mechanics of how it is going to work , of even how we are going to fund it .

Its should be dubbed Kiwishambles