NZ PM Jacinda Ardern pledges widespread NZ housing reform

By Leith van Onselen

I noted in the lead-up to the New Zealand General Election, held on 23 September, that Labour had an excellent housing platform that addresses both supply and demand distortions via negative gearing reform, banning foreign buyers of existing homes, tighter capital gains taxes, removal of urban growth boundaries, plus bond financing for infrastructure. Its plan to reduce immigration by around a third is also sound, and would help to relieve chronic housing and infrastructure pressures, especially around Auckland.

After new housing minister, Phil Twyford, signaled over the weekend that the new Labour-led Government would pursue its housing and immigration reforms, yesterday’s ‘speech from the throne’ by Prime Minister Jacinda Ardern confirmed it:

The programme I will outline today is ambitious. It draws on the priorities of the parties. In the first 100 days, this government will put in place the building blocks for this programme of work…

This government will take steps to improve our resource management system, with better spatial planning and better enforcement. An urban development agency will be introduced, and more emphasis placed on public transport and light rail.

This government will remove the Auckland urban growth boundary and free up density controls. New developments, both in Auckland and the rest of New Zealand, will be able to be funded through innovative new financing methods like infrastructure bonds. This government will also give Auckland Council the ability to implement a regional fuel tax.

To help ease pressures on our housing, infrastructure and public services, this government will make sure we get our immigration settings right.  It will cut down on low quality international education courses and will ensure work visas issued reflect genuine skill shortages.

Housing is a top priority for this government. Action will be taken to address homelessness. State house sell offs will stop. And the State will take the lead in building affordable houses.  Through its Kiwibuild programme, this government pledges to build 100,000 high quality, affordable homes over the next 10 years; half of them in Auckland.

A Housing Commission will work with the private sector, councils and iwi to cut through red tape, undertake major projects and ensure new, affordable homes are built rapidly.

This work will begin immediately, as part of this government’s 100 Day Plan. To boost the workforce, employers will be financially supported to train 4000 young people as apprentices, including on-the-job construction training.

High demand for housing will be dealt with by cracking down on speculators who are pushing prices out of reach of first home buyers. Foreign speculators will be banned from buying existing New Zealand homes. A comprehensive register of foreign-owned land and housing will be created, and the Overseas Investment Act will be strengthened.

The ‘bright line test’ will be extended, so income tax is paid on any gains from the sale of residential property bought and sold within five years. Speculators will also no longer be able to use tax losses on rental properties to offset tax on other income.

This government will make life better for renters. A ‘Rent to Own’ scheme will be developed. All rental properties will be required to meet standards for insulation, heating and drainage. Funding for home insulation in general will be boosted and a Winter Energy payment will be introduced for superannuitants and those receiving main benefits. This government aims to ensure that every New Zealander has access to a warm, dry, safe home.

Australia’s delinquent politicians on the fake left and right should take note.

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Comments

      • This is relevant to her ability to produce good policy?

        She could look like a hat full of bullfrogs and I would still be on her cheer squad for taking some positive steps to fix housing affordability.

    • ErmingtonPlumbingMEMBER

      Come on, Come on, fellas,…just because every Left leaning man here, probably has already “rubbed one out” thinking about the wonderfull Jacinda,… doesn’t excuse a Sexist Commentary.
      The fact she looks like a good sort and a “real goer” is totally beside the point of this article!

      Keep the personal stuff to yourselves,…or you will be thought policed!

      https://youtu.be/0GAijQjmzDA

      • HadronCollision

        It’s actually just totally anachronistic, gross, misogynist and just gross.

        Keep it to yourselfs

      • What a star Brendon is. Love the next vid on freedom of speech. I had never heard of him before, thanks EP. He just happens to agree with me…

      • ErmingtonPlumbingMEMBER

        I’ve been depressingly wondering for years who would rise to champion free speech as well as the late and wonderfully articulate Christopher Hitchens.
        Though I wouldn’t put him up on quite as high a pedestal as I do “The Hitch”,…Brendon is on his way there.

      • Good old Brendan, always ready to defend those who need it like the woman who quit her job after extensive harassment or the kid who killed himself after years of bullying.

        Oh, wait, my mistake. Brendan’s the guy cheering on the harasser and the bully for the important services to society in weeding out the weak.

        Just another right-wing virtue signaller. Can’t even keep to his Libertarian “the Government must do as little as possible” schtick ‘cuz he needs to make sure he’s keeping the crowd happy with a bit of homophobia.

      • What a load of twaddle. Yeah, all white men don’t have it easy. Correct as in not all white men have the same level of easy, but it doesn’t matter where you are in society, if your a white male you’re got it easier than the others at your level.

        More so called free speech crap.

      • You can say whatever you want. I’ve never suggested otherwise.

        But if you cause someone harm, you shouldn’t get a free pass just because you use words instead of fists.

      • ErmingtonPlumbingMEMBER

        “if your a white male you’re got it easier than the others at your level”

        At your level?,….are you talking about Class, Dennis?
        That’s exactly what Brendon was going on about,…did you watch the Clip?

    • It’s not a lie if you keep it to yourself. Opinions that is…

      Dem chompers tho (I love them).

  1. You mean it can be done just that easily?. A politician can just put fair things down on paper and do it? I’m shocked. There must be a catch.

  2. Her cat died. RIP Paddles. 🙁

    Does this website do obituaries? Could do one for the car factories of Oceania and democracy itself.

  3. Thank you Leith.

    Further texture accessible down this thread at Kiwiblog …

    https://www.kiwiblog.co.nz/2017/11/general_debate_8_november_2017.html/comment-page-1#comment-2071537

    … with extensive background information available at my archival website Performance Urban Planning …

    http://www.PerformanceUrbanPlanning.org

    Public opinion is the driver.

    … Following New Zealand … housing affordability becoming the dominant political issue in Australia …

    From boom to gloom: how rising house prices have become a worry … Sydney Morning Herald

    http://www.smh.com.au/comment/from-boom-to-gloom-how-rising-house-prices-have-become-a-worry-20171103-gzeh8r.html

    … extract …

    … The latest Ipsos Issues Monitor, which asks respondents to select the three most important issues facing the community, shows housing has jumped from sixth place in Victoria to second place since 2014.

    In NSW, housing has topped the list of concerns for the past three quarters. Half of NSW respondents now rate housing as one of the nation’s most important challenges compared with less than a third in 2014.

    Other polls have drawn attention to the growing public unease about housing costs. An Essential Vision survey that asks respondents nationally to nominate the “three most important issues for government” shows housing affordability climbed from sixth ranking to second between 2014 and 2017. … read more via hyperlink above …

    • The great shame is that the previous Tory government failed to get on to this out of the 2008 election … as promised.

      John Key on Housing Reform 2007 – YouTube

      https://www.youtube.com/watch?v=cWPgoAI1cLE

      What I wrote just prior to the 2008 election …

      “Kiwis Pay Price For ‘Cullen Housing Bubble’” | Scoop News

      http://www.scoop.co.nz/stories/PO200810/S00090.htm

      … and at the time of the release of this years Demographia Survey late January this year …

      ‘New Zealand’s housing consensus; Where is the political leadership ?’

      http://pc.blogspot.co.nz/2017/01/auckland-worlds-fourth-hardest-to-buy.html

      John Key failed himself, the National Party and his country … big time.

      He will be held to account.

      • The amalgamated and therefore bureaucratically buggered Auckland Council … like its non – performing Christchurch counterpart …

        Consent delays bring Auckland Council apology | Stuff.co.nz

        https://i.stuff.co.nz/auckland/98713123/consent-delays-bring-auckland-council-apology

        Staff quitting and increasing complexity are some of the reasons building consents have hit “unacceptable” delays, Auckland Council said.

        The council’s regulatory services director Penny Pirrit and building consents general manager Ian McCormick said on Thursday that average processing times had jumped by four days in recent months.

        “It’s unacceptable, I’m embarrassed to be here telling you about it,” McCormick told a press conference. … read more via hyperlink above …

        KiwiBuild doubts raised: building boss blames consent delays – NZ Herald

        http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11939992

        The head of a big land and housing development business has questioned the Government’s KiwiBuild plan to build 50,000 new Auckland residences in a decade, saying consenting processes are causing significant delays to the much lower work flows.

        Nigel Richards, general manager of McConnell Property which works in commercial property and land development, raised doubts about the practicality of the scheme at an event in Auckland last night. … read more via hyperlink above.

        Outrage at Auckland Council spending $46 million on comms | 1 NEWS NOW | TVNZ

        https://www.tvnz.co.nz/one-news/new-zealand/outrage-auckland-council-spending-46-million-comms

        They have never bothered to ask why the smaller Councils of Waimakariri and Selwyn ‘saved’ Greater Christchurch following the earthquakes with their responsiveness … while the bureaucratically buggered Christchurch Council is still not performing … and wont until it is de-amalgamated.

        There are two types of local government … the small and the bad.

        Once you take the ‘local’ out of it, you bureaucratically bugger it.

    • I tell you what, if they do this right, it is a perfectly logical way to make “growth” an industry in its own right – real growth, not the Ponzi kind. Make sure the real economy gets a boost – the actual building of stuff rather than Ponzi inflation in the stuff that wiser ancestors bequeathed to the later generations.

      I have multiple concerns, there is so much that can go wrong with this. They will absolutely need to enable the free market to rise to the occasion, in the form of private-sector ability to finance its own infrastructure for growth and convert any land they want to (except specially preserved locations) to developments. And the private sector needs to lift itself up out of having been distorted back to the cottage industry era – back in the 1960’s and 70’s there were several building firms that did more than 1000 houses per year – now there is one, and almost none others who even do more than 100. “Free to Build”, by Bassett, Malpass and Krupp a few years ago had the depressing stats in it.

      Labour are obviously responding to top quality advice, in contrast to the arrogant Tory government that preceded them. The Housing Minister for most of the time, Nick Smith, demonstrated no intellectual connection at all with Adam Smith, sometimes it is a mystery why people ended up in an allegedly “right of centre” party at all. Muldoon was similar but at least in Muldoon’s day, urban development and housing was ironically much closer to a free market, while almost everything else wasn’t!

      • Wise words: It’s always the private sector that needs to do the heavy lifting, but sometimes this only happens after governments lead the way.
        Most developers that I know are very scared atm and wouldn’t dream of starting a major suburban residential housing project. For starters they just don’t have the liquidity to get the ball rolling on a major project. Banks have tightened so much recently that risk capital is just not available at any sensible LVR, this suggests that everything needs to settle down before it’ll be even possible to kick start it again. Of course the government could step in and make Crown land available, finance the whole deal and basically “just-do-it” I suspect that’s what will be needed.
        I sure hope JA has a huge pair because that’s what it will take to stay the course, if they can they’ll be setup for real growth with real intrinsic value, I’d love to see NZ move ahead and show Australia how it’s done.

      • Fisho – you are spot on. While many reformers now, point to the success of the US south and heartland model of urban growth, which is very close to a private-sector led market and works very well (because it is an old institutional norm), in our parts of the world, our decades of systemic affordability of housing involved government providing an “enabling” lead. Planning and building the infrastructure, developing some locations for “social” housing, and letting the private sector go for broke all around that.

        The inertia in government departments at all levels now, will be one of the biggest things to overcome, this will probably have to be bypassed by creating new departments altogether. The whole bureaucratic culture is one of stonewalling, obstructing, proscribing; and prescribing approved approaches that are fodder for rentiers and speculative gamers. And the ideological fig-leaves for this are acquiesced to by many of the general population. You can guarantee that massive propaganda campaigns will be orchestrated against any new trend to “more sprawl”, which was the decisive element in getting affordability in the past and will be so again.

    • My point about growth being a potential industry in its own right, is that there is so much scope for what you are hinting, migration from Australia, people cashing up bubble value houses and buying fair-value houses in NZ leaving themselves a big cash windfall to bring into the NZ economy. This is what is going on within the USA, there are anecdotes all the time about people selling a $1.5 million house in Los Angeles, buying a $500,000 one (better house, too) in Dallas and investing the $1 million somewhere. Business growth there matches the population shift, partly because so many arrivals have money to invest and also because businesses benefit from lower cost land, and workforces with fair housing costs.

  4. This has to be the new goal. Two party preferred is why we are here to a large extent, much of the corruption would evaporate if there was a competitive political environment.

  5. Looks good on paper, it’ll be real interesting to see what happens when housing prices start to correct.
    I’ve met so many Aussies that believe with their heart and soul that they’ve earned the wealth bestowed by house ownership over the last 5 years. Everyone I ever discuss this with tells me how they’re the smartest RE investor on the planet and that this knowledge is what gained them the edge and allowed them to “win” the Auction. It’ll be real hard for all these RE geniuses to accept that they were just lucky and that their luck has run out.
    Now the big political question is: Do I really want to be the party associated with bad luck?
    When 70% of people own a home you’re looking at a lot more pissed off voters loosing money than can ever be countered by a few happy FTHB that “saved” a few grand on a still very over priced asset.

    • +1 This is my fear, that she’ll get lumped with the blame. However, it’s also an example of true leadership and of a politician actually looking out for the longterm interests of the New Zealand people. She’d have to know she is running the very real risk of political suicide to pursue these policies, but is doing it anyway. A breath of fresh air.

      • Agree completely two thumbs up for trying, however the problem is not that she will fail and go back to wherever she came from, but rather that all our politicians will feel vindicated that this is a hot potato issue which every career minded politician should say well away from. If it blows up in her face, it’ll be worse than if nothing at all had happened.

      • Oh aye! I have been arguing with a mate of mine about it, who has been all doe eyed about her since she got in. I agree with him, her policy is absolutely awesome, and I am also quietly happy as Larry! But as you noted, the cynic in me says that it is just providing ammunition for a complete reversal post bust. Got to stay optimistic though, at least there are still politicians out there like her…I’d just prefer she got up AFTER the bust.

      • The housing issue is a bit like gangrene and Jacinta is going to have to cut it off at the knees for the economy to survive.

        Even though she’s doing the right thing, she’s going to be blamed for it.

  6. “This government aims to ensure that every New Zealander has access to a warm, dry, safe home.”

    It is tragic (and an indictment on the last 20 years or so) that the above is an aspiration of a government of a first-world country in the 21st century!

    Reads like something you might have expected to find in the policies of the government of post-war Bosnia or something.

    • I agree completely. how can it be that this is a 21st century aspiration for a first world country?
      Part of this whole speculation problem is the desire of many land speculators to buy a run-down house and rent said house until they have the capital to develop it or flip it. Tenants can’t possibly damage the house (it’s a tare down) but of course these investors don’t want to put a single penny into this property, in a tight rental market this results in tenants moving their families into some pretty shoddy death traps, mold, asbestos, rodents…you name it…the landlord is not interested in fixing it and the tenant has no tenancy rights (so they’re not going to fix anything), end result is first world governments aspiring to rid their cities of 3rd world housing.

  7. reusachtigeMEMBER

    Her facial features even make her look like a hard labouring commie! She’s the real deal.

  8. I really hope she can pull it all off and that aspects of it don’t get watered down especially with the abolition of the UGB. Breaking the land racket is essential.

  9. Wow! Policies to help people.
    Quite the contrast with Australian paid-off pollies pandering to their lobbyists.

  10. TailorTrashMEMBER

    “A comprehensive register of foreign-owned land and housing will be created,” ……….and when the real stats are in and it’s not as insignificant as the bought media have been spruking the embarrassment might reach over the Tasman to Straya ………at least the punters might demand an answer to the same question here .

  11. Low and light metros that are affordable and mobile are essential for earthquake – prone New Zealand

    Did the November 14 earthquake shake Wellingtonians’ faith in city apartments? | Nikki MacDonald | Fairfax / Stuff.co.nz

    https://i.stuff.co.nz/national/98364002/did-the-november-14-earthquake-shake-wellingtonians-faith-in-city-apartments

    When the shaking stopped, Bede Dwyer expected to look down on to a city of felled buildings and mass casualties.

    He got up from the popped slats of his bed, walked past his smashed television set and crockery – past the microwave that had been thrown out of the wall – and down the stairwell, with its dandruff of plaster and concrete chips.

    “I thought it was going to collapse up there, for sure, it felt that violent … I thought lots of people would have died and buildings and houses would have been completely levelled. So I was really surprised when I went outside – that everything was relatively fine.” … read more via hyperlink above …

    … What lessons have been learned too from the Greater Christchurch events … older and denser central Christchurch on the one hand … and newer low and light Rolleston on the other ? …

    … June 2011 I wrote …

    OPINION: Hugh Pavletich accuses Christchurch City Council of blindness, blunders and chain dragging; calls for effective leadership, ‘open land’ policy and bendy zoning. Your view? | interest.co.nz

    https://www.interest.co.nz/opinion/53947/opinion-hugh-pavletich-accuses-christchurch-city-council-blindness-blunders-and-chain-

    … and a year later …

    Christchurch: The Way Forward | Scoop News

    http://www.scoop.co.nz/stories/AK1206/S00251/christchurch-the-way-forward.htm

    … Where is the political leadership to make our cities safer and more resilient ? …