Editorials on State House Policy

June 29th, 2009 at 2:15 pm by David Farrar

The Dom Post last week said:

During last year’s election campaign, the National Party promised, if it won, to put the Kiwi dream of home ownership back within reach.

Part of its plan was to allow some state house tenants to buy the homes they lived in, while maintaining the state housing stock by reinvesting the money in replacement homes. It has since also committed to building another 1550 state homes over four years.

In February, it announced it would fast-track $124.5 million worth of investment in state housing by upgrading 10,000 homes and adding 520 others before July. This week, it went further.

From September, tenants can approach Housing New Zealand to discuss their purchase options, which might include their also benefiting from the state’s so-called Welcome Home mortgage guarantee scheme, which applies to low-income earners buying their first homes. …

But perhaps the most notable aspect of this policy is its stark difference from that which the last National administration implemented. Then, state houses were sold to tenants and not replaced, and Housing Corporation mortgages were on-sold to financial institutions. The state plainly wanted to get out of housing.

The motivation this time seems different. The Government of Prime Minister John Key, who began his life in a Christchurch state house, seems to be saying that state involvement must be a hand-up only to home ownership, and that those who can afford to move on should do so. It is to be hoped they take the hint.

And today’s Herald:

Tenants of state houses will shortly be given an opportunity to buy them. Housing Minister Phil Heatley has announced that houses will be offered to tenants at market valuations from September and Housing New Zealand will use the money to build new houses.

This news has been greeted with predictable disapproval from Labour, the Green Party and various advocacy groups who claim to be concerned for people in urgent need of a state house. Their preferred solution seems to be to spend whatever it takes to house everyone who cannot afford to buy a home. But since that would be an open-ended liability it is plainly impractical. So what else would the opponents of state house sales suggest?

Their policy on this issue is probbably the same as their policy on every issue – borrow and spend.

But historically, Governments of all stripes in this country have baulked at forcing comfortable state tenants to forsake their homes. These people are often elderly and settled and it would be cruel to uproot them. Since Labour and the Greens agree with the Government about that, why do they not support the gentler course of enabling these people to own their homes?

Well Phil Goff used to.

This perhaps hints at the critics’ real concern. As the Greens’ Sue Bradford put it, “Houses which are sold can be back on the market quickly, with investors and developers reaping profits. This happened in the 1990s,” she said, “and I’m sure it will happen again now.”

The Left does not like the idea of any property becoming a source of private profit, and Ms Bradford has the gall to accuse the Government of “ideology”.

Amusing if it wasn’t so sad.

The policy looks to be good for the tenants, good for their neighbourhood, good for those waiting for a state house, good for the taxpayer, the building industry and the economy. Good for everyone, in fact, except those who live on constituencies of state dependence.

Take a bow Labour and the Greens.

Tags: , ,

31 Responses to “Editorials on State House Policy”

  1. Pascal (1,969 comments) says:

    Now if only we could get One News to present fair and balanced coverage of any issue relating to the National Party. And not have their usual media shills portray this only from the Labour Party perspective.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. Auberon (873 comments) says:

    Add Notional Radio to that list!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. Doug (410 comments) says:

    Also TV3.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. Put it away (2,880 comments) says:

    “Good for everyone, in fact, except those who live on constituencies of state dependence”

    OH SNAP !

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. jarbury (464 comments) says:

    Did you write the Herald’s editorial DPF? Considering the posts you wrote last week, you should be taking serious copyright issue with what they’ve written today – I think it’s word for word just about.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. 2The Janitor (4 comments) says:

    jarburieduphisarse – what do you communist idealouges have against private ownership of houses. Surely, this is good for the country. Will instill ownership, which n nerly all cases is good for the persons soul & wellbeing. Surely people get sick of sucking the mastatis infested public teat all of the time. Maybe you should try more ownership than whinging. Or are you worried they will not know what they are doing and they will need guidance of a new dear leader Goff.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. Jeff83 (745 comments) says:

    The real concern is that they are sold and the money from it is then just allocated to a general pool and the public housing sector shrinks. Public housing should (not saying all people currently living in a state house should really be receiving state support) help those in need by enabling those at the bottom, especially those with families to have shelter.

    Whilst RedBaiter and co will say the state should have no interest in providing services which the private sector can, I think the majority of New Zealanders would like to think everyone has access to shelter which they can afford, especially those with families (more thinking of this from the children’s perspective than the parents). Guess this goes to my belief in providing everyone who grows up with access to shelter, education and food, three basic rights as I see them. From there people are to provide for themselves. This is in part why I would favour a movement to vouchers from cash for state benefits – as we, i.e. society who pays tax, are paying for state benefits, we should be able to entrust that the money is going where we are intending it. I.e. clothing, feeding, and providing shelter. Not being pissed up against the wall.

    If the money from sales goes into building new houses, which is the stated policy, I have no problem with it. What I would have a problem with is if this is not done, which only time will tell.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. wreck1080 (3,924 comments) says:

    Good policy.

    The stereotyping side of me says that state house tenants are more likely to be criminals and buying their own houses will give them motivation to give up crime.

    But, I guess in reality only the high quality state tenant types will take up the buy option.

    Either way, everybody wins.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. jarbury (464 comments) says:

    what do you communist idealouges have against private ownership of houses

    Where did I say I have a problem with the government’s policy? I was merely saying that today’s herald editorial is extremely similar to what DPF was writing last week. Uncannily similar in fact.

    My main worry when I first heard of this policy was that strategic sites would be sold off (like losing one site in the middle of a big block) making it impossible to do larger redevelopments. This happened all the time during the 1990s and I have spent a lot of the last few years dealing with the poor outcomes of that (when assessing redevelopment options for HNZC). But I am assured that HNZC will have veto power of what can and cannot be sold off, with specific mention of strategic sites being made. So I am reassured in that sense.

    Thus, I don’t have any problems with the proposed policy. However, I still do think it would be smarter for HNZC to redevelop blocks of property and then sell off some of their additional units. I guess they could do that as well.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. stephen (4,063 comments) says:

    Uncannily similar in fact.

    Seems to be me that the arguments in favour are few and pretty straightforward, we aren’t exactly talking the EFA here.

    edit: or maybe everybody is just reading the same National press release :-D

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. jarbury (464 comments) says:

    edit: or maybe everybody is just reading the same National press release

    I wouldn’t be surprised…..

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. Bob (497 comments) says:

    Turning over the houses and the tenants seems a good idea to me. People have more dignity and more encouragement to improve their lot when they own property. At the same time houses are available for the next lot of people needing help.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. Rex Widerstrom (5,354 comments) says:

    As the Greens’ Sue Bradford put it, “Houses which are sold can be back on the market quickly, with investors and developers reaping profits. This happened in the 1990s,” she said, “and I’m sure it will happen again now.”

    I used to have a bit of time for Sue Bradford – she had some fire in her belly and a lot of drive, even if I didn’t always agree with the direction she was driving. Now she’s become a naysayer who can’t see beyond her own rigid worldview and thinks we all need telling what to do.

    The Australian First Home Owner’s Grant (now worth around $21,000 in some circumstances) comes with a simple clause in the contract – if you accept the money you must live in the home yourself and not sell it for at least a year. If there’s concern that state houses will just be turned over quickly for profit, seeing the residents back in the rental market, then it’s simple enough for the government to tag the deal with a similar proviso.

    But of course Bradford is now so locked into the mindset of much of the left (but also, alas, many on the right) – that people are incapable of realising what’s in their own best interest and thus need the dead hand of the state to control every aspect of their lives – that creative compromise is seemingly beyond her.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  14. coolas (115 comments) says:

    … ‘the Kiwi dream of home ownership’ … is a slogan that needs to be questioned. There are other models in Europe and Japan which see high income earners choosing to rent for life rather than buy. Government, private Housing Societies, and private landlords provide good quality, well maintained, housing. Perhaps it’s a cultural thing. There’s no cringe to tenancy in Paris, or Milan, or Tokyo. And some of the tenancies are inherited over generations.

    It would be refreshing to see another tack set on the housing issue. Partnerships between Government, Local Authorities, and the private sector could develop housing for lease (perhaps integrated with ownership).

    To overcome the ‘capital gain’ reason for buying a house, instead of ‘dead money’ rent, the terms of the lease could be set at say 10% of historical cost plus the rate of inflation. Some profit to the lessee when they wanted to move could come from a ‘sale’ of the benefit of the pegged rent either back to the owners, who could then charge market rent, or sold to the incoming tenant. Or a blend of both.

    There must be lots of innovative ways help shift the Kiwi home ownership obsession, because the dream is often a nightmare, as rising mortgagee sales well testify.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  15. artemisia (242 comments) says:

    In the early 1980s there was a shift in state housing approach. It was considered that provision of state housing was pretty much an income availability issue, rather than a house availablility issue. With that in mind, there was no need for the state to actually own the housing if income support was provided – which it was and still is. The Dom Post statement as quoted by DPF that “The state plainly wanted to get out of housing” needs to be seen in that context – in other words it is more correct to say the state wanted to get out of owning housing. Works for me ….

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. Auberon (873 comments) says:

    Jeff83, how do you square this, from you:

    “The real concern is that they are sold and the money from it is then just allocated to a general pool and the public housing sector shrinks.”

    With this from the Minister of Housing:

    “All the money Housing New Zealand earns from the sale of a home to a tenant will be reinvested back into a replacement state house … One family will buy a home, and as a result, another deserving family on Housing New Zealand’s waiting list will get a state home.”

    This reads to me like the money will be allocated into a very specific pool – for replacing every house sold with a new house – in which case the public housing sector wouldn’t shrink at all.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. david (2,557 comments) says:

    I don’t think too many people have a problem with the principle of housing being available for those who cannot otherwise afford it. nfortunately the principle tends to run up against human nature when it becomesinstitutionalised and part of Policy. Like with any subsidy, human nature (wittingly or unwittingly) tends towards increasing the use of any item which is “sold” at less than its market value. This is almost a law as immutable as the fact that water always runs downhill, so we find that among those who “cannot afford” commercially available housing are a number who do not take appropriate care of their finances and so, by default almost, consign themselves to the classification that qualifies for subsidised housing.

    Part of the solution to this should be an incentivisation for people to use the crutch provided by subsidised housing to get themselves into either home ownership or commercial rentals. This policy goes some way towards providing that incentive but i fear that the reluctance to place a time or income limit on state house tenancy will mean that only those who have used the crutch effectively will provide the pool of potential purchasers. The majority will relax in the comfort of the security blanket provided by the state and will remain as “state house qualifiers” for the forseeable future.

    It is easy to see the problem but I must admit that finding the answer is somewhat more difficult if the term “politically acceptable” is used as a qualifier.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. xxx (34 comments) says:

    How is it that a state tenant so hard up they require a state house can afford to buy one?

    No one asking that question. Not important is it. Just rush off to the ideology back-slap room instead.

    Well, you voted the dumbo’s in, can’t complain they’re wasting your money later on. An really, if you think apprieciation of property and maintenance of it comes from ownership you really need more life experience.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  19. peterwn (3,277 comments) says:

    xxx – because of changing circumstances, some state house tenants can then afford to buy. Traditionally however there has been no ‘mechanism’ to evict such tenants – this would be political suicide anyway.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  20. Bog Roll (6 comments) says:

    Maybe they will be paid to take their house, like the high country leaseholders.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  21. llew (1,533 comments) says:

    How is it that a state tenant so hard up they require a state house can afford to buy one?

    No one asking that question. Not important is it. Just rush off to the ideology back-slap room instead.

    There is a percentage of tenants (it used to be around 10%) who pay market rent. They’ve either been there since the last Nat govt’s market rent days, or they’re renting in areas with low demand from low income renters. The old Home Buy scheme (all this has happened before & all this shall happen again) was aimed at them, maybe this one is too.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  22. Viking2 (11,491 comments) says:

    peterwn, there has always been a mechanism to evict state house tenants! Its known as a 90 day notice. No reasons are required to be given. They just were never motivated to actually manage their properties at all. There are countless examples of low incomer’s getting a house and then in time raising the total income into the house. All state houses should be total household income related. If that happened then we would get a much better utilization of houses.
    In imho opinion the housing supplement as was in place before Commander Klarks time was a much better way of assisting housing priorities for the support was targeted directly at individuals based on the earnings of that individual and the people they supported. The private sector is quiet capable of supplying housing on that basis. Currently there is no shortage of housing apparent that I am aware of despite HNZ great waiting list. It is a manufactured fiction, ask any rental agency and you will get the same answer. We have plenty to let. The issue is rather the ability to pay and the afore mentioned supplement would fix that.
    It also spreads around the undesirable so that they do not cause so much mayhem and subjects them to better community attitudes.
    One of the worst features of the state housing system is that it is just another system that beneficiaries can rort and they do. I know of a neighbor who we were really pleased to see gone who has been handed a brand new four bedroom state house for $89.00 per week. I know of another who whilst gainfully employed with a reasonable wage, a wife and two kids who were dealt the same deal while the guy who worked alongside of him with three kids had to pay his mortgage at $300 per week. Why would they even bother to own their own house when they can get that sort of a deal?
    Like all things state we should assist those that cannot help themselves and those that can should get a hand up and sent off to help themselves.

    In terms of protecting the resale for a profit it takes more than a year. Any sale should be locked in place for a minimum of 5 years and preferably 10 with the only out being an out of town transfer for work or death. We should be looking to create stability in the housing area and if someone is not prepared for that then they should not get to own a state house. In fact I would discount their house on the basis they remained there for that 10 year period because that brings so many other social benefits. So stay put for 10, pay down a chunk of mortgage in that time and you can have your house for valuation less say 10% at todays price. That’s a darn good deal in anyones terms.
    I watched Heatley trying to score points on the video last week and all I could see was a light weight second rate Minister who appeared not able to develop any policy of his own (despite being in opposition for what 9 years), didn’t even bother to follow Bob Clarksons suggested policy( probably the only person in the Nats. who knows anything about building and that stuff), and then had the gaul to criticize Phil Goff while reintroducing an almost self same policy that Goff had put in place in 1986. 20 years before. OK so Helen canned it all but like most things she fucked up I suspect very strongly that Goff was fairly pissed off with her for that. ( Take that as a for sure.)
    These ministers are disgraceful and should join the comedy theater rather than masquerade as someone well paid to run our country.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  23. whalehunter (479 comments) says:

    like all of national policy so far, this one is safe and changes not much.
    so safe, that no state housing renter/occupier will buy the house they have stacked a claim too.

    we do have a minimum wage, an unemployment benefit, a DPB, ACC and a sickness benefit, a working for families, student allowance, flatmate’s, family members and so on…

    my work mate was a porn broker who did a lot of work for WINZ. A typical situation was; delivering a couch to a state house, where the children were playing ps2 on the plasma tv, sitting on a crate with a wrx in the driveway. Another; a person would come into his shop with a $200 voucher for a fridge and then try and sell it back to him for $120.

    Get real people…. we are helping a ‘lifestyle’.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  24. llew (1,533 comments) says:

    my work mate was a porn broker who did a lot of work for WINZ.

    If this was during the the Christine Rankin days things were worse than I thought!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  25. whalehunter (479 comments) says:

    lol, yes… pawnbroker

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  26. llew (1,533 comments) says:

    :) Gave me a good laugh though – thanks.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  27. Shunda barunda (2,983 comments) says:

    :D

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  28. tvb (4,431 comments) says:

    “Good for everyone except those who live ON constituencies of State Dependance”. Every now and then the Herald hits the nail on the head. Living ON constituencies of state dependance is what the Labour Party is all about. Strip away the tears, the sympathy, the prejudice against anyone successful, you lay bare the utter ugliness that is the Labour Party. They want everyone dependent on the State (i.e. the Labour Gopvernment) to shut up and vote Labour out of fear. That is how Labour treat Maori, the old, the solo parent, the unemployed, the struggling middle class. And they want the state to pay for the running of the Labour Party because the Labour Party do not distinguish between the State and Labour.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  29. Anthony (796 comments) says:

    Once you are in a state house you can earn as much as you like – all that happens when your income rises above a threshold is that you end up paying a market rent. Of course the market rent doesn’t take into account the superior security of tenure that a state house offers over the private sector. I suggested that a premium of maybe 20 percent be charged to higher income state house tenants to make up for this security and encourage them to leave – but that is too harsh for the current government and instead they prefer to encourage people to buy their state house.

    It’s all PC nonsense as people in the private sector who haven’t been lucky enough to win a State house lotto draw have to face the real world. Why should state house tenants be treated with kid gloves and given special status? Plenty of poor people don’t get a state house!

    It is also utter nonsense to suggest that extra state houses have to be built to keep up the supply if any are sold. The ones that are sold still have people living in them – the housing supply has remained the same – just as many people are housed! House prices and rentals depend on the overall supply and demand. The government could sell the whole state housing stock tommorrow and the only effect would be for those living in them to get a rise in rent to market levels. No one else’s rent or house price would be change one iota because of the sale! Rents were in fact lower when the last National government was selling off state houses without replacing them.

    No one seems capable of even the most basic logical reasoning when discussing housing policy.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  30. Jeff83 (745 comments) says:

    Auberon,

    Yeah read the policy, which I am in favour of if it is followed, my concern is that the policy is actually followed and not changed at some later date.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  31. Ross Miller (1,704 comments) says:

    Viking2 … Heatley vs Goff. No contest. Goff, so pathetically weak and so committed to the policy he supposedly introduced in 1988 (and never fully implemented) that all he could do was to sqeak his agreement when Helen canned Nationals verson of it (fully implemented) when Labour returned to power in 1999.

    And do I see any commitment to that policy by Labour now? Answer … silly question.

    Goff is everything to everybody and Labour’s latter day version of Bill Rowling made worse by Viking2 promoting him.

    Proof positive that ACT (like all Parties) has their share of unguided missiles.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote