I previously blogged on how Labour’s Lotto Housing policy, where they will effectively allocate their subsidised houses by random lotto type draws.
But sadly for those who like Lotto and were hoping to win a taxpayer subsidized house, their numbers are looking very dodgy.
Now bear in mind when I say their numbers are dodgy, they have not provided many numbers. Merely that they will do 100,000 Lotto houses for $1.5 billion of net capital. They have given no details on how much land they would need, no detailed budget etc. It’s the sort of policy you dream up in desperation the week before a conference.
But they have given us one concrete figure. The Government will build 10,000 new houses a year. Now let’s break that down.
10,000 houses a year is 192 houses a week. Now if you take the working week of 40 hours, that is 4.8 houses per hour. That is a new house every 13 minutes of the working week.
Hands up those who think the Government can build a new house every 13 minutes? If your hand is up, please keep it up and please join the queue for free trips to the North Pole to see Santa Claus.
But even if you think the Government can build a new house every 13 minutes, also consider the impact on building costs. Labour often forget or ignore basic economics such as increased demand pushes prices up. Trying to build 10,000 houses a year, on top of the existing building programme and on top of the Canterbury rebuild will see huge inflation in the construction sector. The costs of labour and materials will inevitable increase. And that means of course taxpayers get let with the bill for cost over-runs on 100,000 houses. Imagine how much more money we’ll be boring offshore to pay for it!