4,000 new bedrooms for state housing

May 15th, 2013 at 12:00 pm by David Farrar

Nick Smith has announced:

Housing Minister Nick Smith today announced two initiatives which will result in the building of up to 3000 new state house bedrooms and 500 new homes.

Dr Smith said the first initiative is called Project 324&5 and is designed to convert three bedroom houses into four and five bedroom homes.

“Project 324&5 recognises that Housing New Zealand, and particularly Auckland, have an oversupply of three bedroom homes and a real shortage of larger ones,” Dr Smith said.

“The initiative is expected to deliver up to 3000 new state house bedrooms to 2000 properties over the next two years, with three quarters of them in Auckland.

Sounds very sensible. You get far more extra capacity by expanding current houses, rather than having to buy land and build new sections.

Dr Smith said the second initiative will see an additional 500 two bedroom state houses built over the next two years on large Housing New Zealand properties in Auckland.

“There is strong demand from Housing New Zealand tenants for more two bedroom homes in Auckland. This is a result of a shortage of supply and increasing demand for two bedroom properties, particularly for single people with caregivers, couples with children, and solo parents.

“The Simply Smart Homes infill project will see pre-fabricated modular homes, to minimise disruption to existing tenants, assembled on the sections of large Housing New Zealand properties in Waitakere, North Shore and Manukau.”

Also seems pretty sensible to me. By not buying more land, it means you get more actual houses for the amount of money you have.

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The changing profile of state house tenants

March 4th, 2013 at 11:00 am by David Farrar

Hamish Rutherford reports:

Housing New Zealand is planning to ditch three-bedroom homes on quarter-acre sections in favour of one-bedroom units.

Details of the department’s plan to reconfigure its portfolio are revealed in a briefing for new Housing Minister Nick Smith.

The owner of more than $15 billion worth of state housing, the government department openly admits that barely half its portfolio properly meets the needs of its tenants.

While 43 per cent of its 69,000 homes are three bedroom houses, only 16 per cent of its “priority demand” requires a property of that size. And only 10 per cent of its portfolio is one-bedroom units, meeting 33 per cent of its highest demand.

I suspect when most state houses were purchased or built the typical tenants were working families with several kids. Today I’d guess that most tenants are not in work and have smaller families.

This is one of the problems of attempting to deliver housing assistance through state houses rather than through accommodation subsidies. If the profile of those most in need changes over time, you end up with a mismatch.

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The MP who thinks he is above the law

October 13th, 2012 at 11:00 am by David Farrar

Stuff reports:

Mr Harawira said: “I parked my car in front of a truck and shone my light up high on the woman on the roof. I stayed in my car. They broke into my car and smashed at least one window and arrested me.”

That is Hone’s version. The Police:

Officers had managed to clear all the vehicles to allow the passage of the truck and trailer unit, except for one vehicle which was driven and occupied by Mr Harawira.

“Repeated attempts were made to converse with Mr Harawira who refused to acknowledge police directions and remained locked in his vehicle.

“The house removal driver advised he could not remove his truck and trailer without the removal of Mr Harawira’s vehicle. After exhaustive attempts to converse with Mr Harawira, including written requests placed on his windscreen, the decision was made to enter the vehicle and this was done with the use of an automotive glass entry devise borrowed from the tow company, shortly after midnight.”

So Hone thinks he is above the law.

Meanwhile, Housing NZ yesterday hit out at protesters, saying its tenants were feeling pressured to take part in protest action.

“Since the project was announced, we have been receiving regular calls from affected tenants to say they are feeling pressured to participate in protest action, which has been largely organised and run by people who are not impacted by the redevelopment,” the general manager of asset development, Sean Bignell, said.

The professional protesters such as Hone are bullying the actual local residents. They should stand up to the bullies.

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Housing NZ call centre

June 7th, 2012 at 10:00 am by David Farrar

Stuff reports:

Housing New Zealand has had to hire almost the same number of staff to run its new call centre as it made redundant to set up its “more efficient” system, figures obtained by Labour show.

In April, the state corporation changed the way it operated, shutting its local office doors to its 200,000 tenants and members of the public with accommodation emergencies, and directing inquiries through a new customer service call centre.

The changes led to 70 frontline positions being axed.

The centre was touted as being able to cope with 1 million calls a year but has failed to keep up with demand after receiving 119,000 calls in April alone, 53,000 of which went unanswered.

Labour housing spokeswoman Annette King said answers she received from Housing Minister Phil Heatley showed the corporation had been forced to employ 68.5 additional staff for the call centre.

“All they have done is shuffle jobs from one area to another. But it doesn’t stop there: there is going to be even more employed.”

Housing NZ yesterday apologised for waiting times of up to 40 minutes, although Mr Heatley has said the average waiting time was about eight minutes.

I think Labour has a fair point here. The concept of a call centre may have been sound, but if it actually means more staff and worse service then it is not a good thing. Inquiries should be made of whether demand was under-estimated or the length of calls was miscalculated.

In terms of the waiting time – even eight minutes is a very long wait. It is slightly more tolerable if the call centre software can tell people how long the likely wait is, or their position in the queue. Anyone know if it does? This should be a function of all modern call centres.

The average time can be skewed by extremes. What I would be interested in knowing is what the median response time was, plus the response times for say the 1st, 10th, 25th, 75th, 90th and 99th percentiles.

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Read the whole article

March 31st, 2012 at 9:08 am by David Farrar

The first paragraph grabs you:

A family of 11 are living in a four-bedroomed state house in Shirley, as Christchurch’s rental housing drought continues to bite.

Three are sleeping on the floor. There is only one bathroom, and they take shifts watching television in the lounge.

The extended family of Somali refugees say they are living in Third World conditions. Because of limited hot water supplies, the only shower in the house has a roster.

The kitchen transforms to a “restaurant” at dinner time, the one washing machine is also rostered and scores of shoes crowd the front door.

“In some parts of the world people are living in Third World conditions, but it is not acceptable in New Zealand,” resident Naema Warsame, 33, said.

Sounds like an awful failure on behalf of the state. Why would they put 11 people in a house too small?

A Housing New Zealand spokeswoman said the agency told Refugee Services Warsame’s family could not be housed in Christchurch “because we had no vacant homes”.

She said the new arrivals moved into the Shirley state house without the permission of Housing New Zealand.

So they just took it over? And now they are complaining about it? And they were told there are no vacant homes in Christchurch?  Yet this gets a third of the page three.

Hayden said Warsame’s family had turned down three houses in Christchurch because the family thought they were in the wrong suburb or too damp.

The wrong suburb? So you get to compare NZ to the third world because your 11 person family is choosy about what suburb to live in?

 

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A sensible move

September 6th, 2011 at 12:00 pm by David Farrar

Simon Collins at NZ Herald reports:

Housing NZ chief executive Dr Lesley McTurk has told the corporation’s 1100 staff that staff numbers will be cut by about 100 as the agency’s focus narrows down to managing its 70,000 state houses.

“We will no longer have a role to assist individuals with their wider social needs. We will concentrate on their accommodation needs,” she said.

Most tenancy managers will become “fully mobile” by next September, reporting from their cars to five home bases in central and South Auckland, Tauranga, Wellington and Christchurch.

Housing NZ should indeed focus on being a great landlord, not an agency of social workers.

Labour housing spokeswoman Moana Mackey said a Labour Government would reverse the changes and turn Housing NZ back into “a social housing provider rather than just another landlord”.

Of course.

But a consultation document issued to staff a week ago says the agency would “stop delivering social services that should be delivered by other organisations”.

“Tenancy managers and case managers frequently find themselves following up with many other agencies such as Child, Youth and Family [CYFS] on child safety concerns; district health boards on health; budget services; school truancy issues and so on,” the document says.

“The Ministry of Social Development [MSD] will act as a conduit for all other agencies that need to provide social support to the corporation’s tenants.”

Dr McTurk said all existing Housing NZ branches would be absorbed gradually into MSD’s “Community Link” centres, which already bring together Work and Income, CYFS and sometimes other agencies in 50 locations. A further 30 are planned in the next year.

And that is probably one of the best things you can do to help families in need. A “one stop shop” centre which brings all the social need agencies together should be vastly superior to having each agency doing its own thing.

Let Housing NZ be a great landlord, and MSD be a great  social service provider.

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Well done Housing NZ

August 25th, 2011 at 1:00 pm by David Farrar

The Dom Post editorial:

The three Pomare women fighting state-house eviction have gone to considerable lengths to present themselves as victims.

They are not. The real victims in the sorry saga of Mongrel Mob intimidation in Farmer Cres are those forced to flee and the female Housing NZ worker who still lives in fear of retaliation.

Housing NZ has spent more than $1 million and 2 1/2 years trying to evict Robyn Winther, Huia Tamaka and Billy Taylor after three men associated with them were linked to one of numerous incidents of gang bullying in the troubled Lower Hutt suburb. The expense has been significant, but it is money well used.

Housing NZ has established an important precedent that will in future make it much easier and faster to evict tenants who have people living or staying with them who are a menace. It means the corporation can issue tenants with 90-day notices of termination, which do not require landlords to give a reason, in cases where it needs to get rid of them to end the anti-social behaviour of their associates.

And may they use this power more often. Some areas are no go zones due to the tenants living there.

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Two mercs, a porsche and a state house

April 16th, 2011 at 10:00 am by David Farrar

Jared Savage reports in the Herald:

A sickness beneficiary with three luxury cars has been evicted from his taxpayer-subsidised state home.

Police seized two Mercedes Benz and a Porsche from Paul Yu Hung Szeto when he was arrested on money laundering and methamphetamine charges in December 2008.

I’m always amazed how active certain sickness beneficiaries manage to be.

The 59-year-old was acquitted this week after a seven-week trial in the High Court at Auckland, where a multi-millionaire businessman was found guilty of serious drugs and money laundering charges.

But Housing New Zealand has terminated Szeto’s tenancy in a North Shore state home after the Herald revealed he lived in a rental property in upmarket Mission Bay with cars worth $250,000.

If he lived in Mission Bay why did he also have a state house on the North Shore? Was he renting it out illegally?

Szeto and his girlfriend Wei Na Shi, a 28-year-old known as Candy, were found not guilty in a jury trial at the High Court on money laundering charges.

Candy? I wonder what her occupation is. I’m guessing neurosurgeon, but I may be wrong.

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Going going ……

February 8th, 2011 at 11:00 am by David Farrar

The Dom Post reports:

A trio of gang-linked women who have fought for two years against eviction from their state houses are expecting to be forcibly removed today after being given 24 hours to leave.

Housing New Zealand informed the three residents of Farmer Cres in Pomare, Lower Hutt, at 12.30pm yesterday of its intention to evict them.

The move follows two years of legal action since Huia Tamaka, Robyn Winther and Billy Taylor were issued 90-day eviction notices after an incident involving the Mongrel Mob in Pomare in February 2009. …

Last night Ms Tamaka, who has four of her six children in the Farmer Cres house, said she was devastated by the news.

“I wasn’t expecting that, there’s no way I can get my kids out of here in that time. I just hope something can be done.”

What? Two years is not enough notice? That is around eight times longer than most people get.

Three gang members allegedly terrorised a woman and her two children in their home, leading to a police swoop on gang homes in the area and the arrest of 10 people. …

Housing NZ chief executive Lesley McTurk said she reconsidered ending the tenancies and decided to proceed because there were some actions so severe and disruptive to a community that their impact could not be undone.

“The Pomare area has a history of violence and intimidation. The incident which led to these 90-day notices was not an isolated event.

Off memory, Housing NZ has been unable to find tenants for any of the other nearby properties because of the violence and intimidation. They’ve turned it into a no mans land.

Housing NZ had consistently offered the trio advice in finding new accommodation and that help remained available, she said.

Instead, we’ve had two years of court battles.

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The eviction battle continues

December 10th, 2010 at 8:08 am by David Farrar

Britton Broun at the Dom Post reports:

The battle to evict three gang-linked women from a Lower Hutt street looks set to go another round despite it already costing Housing New Zealand more than $550,000.

The Court of Appeal said yesterday that Huia Tamaka, Robyn Winther and Billy Taylor must take a different route to have any hope of overturning their eviction from Pomare’s Farmer Cres.

After 18 months and four levels of the legal system, the women will now complain to the Human Rights Commission that they were discriminated against because of their Mongrel Mob partners.

They almost sound victims, but the true victims are:

Information released under the Official Information Act reveals HNZ has spent more than $320,000 on security in the street since the women’s Mob partners allegedly terrorised another woman from Farmer Cres in February 2009.

Though all criminal charges were later dismissed, the state housing body has racked up legal fees of more than $240,000 to get the families out.

The lawyers at least will be happy.

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Dom Post on Housing NZ

October 27th, 2010 at 11:00 am by David Farrar

The Dom Post editorial:

For every state-house tenant who stays put despite having the means to move on, there is another person living in a caravan, a camping ground, substandard housing or a boarding house.

It is a simple equation, but one those who subscribe to the notion of a “state house for life” appear unable to grasp.

The consequence of indulging those who can provide for themselves is to shut out those who cannot. Housing New Zealand does not have enough homes to accommodate both groups. It should not try.

The only alternative would be to increase from 70,000 to 360,000 the number of houses owned by the state. And if anyone finds a spare $87 billion in capital for the Government, could they let Bill English know as I think he would be keen to have it.

An expectation has arisen that securing a state house is equivalent to being granted a house for life.

It is not an expectation that is contained in law, but a de facto understanding that is adhered to by Housing NZ staff. Tenants in good standing are allowed to stay for as long as they desire.

The policy applies equally to those who need state houses – the disabled, the mentally ill and the poor – and those who do not – the 5000 Housing NZ tenants who earn enough to pay full market rents and could just as easily rent privately.

That is foolish and unaffordable, and Housing Minister Phil Heatley is right to signal change, starting with reviewable, limited-term tenancies.

In the private sector, your tenancy can be terminated with 90 days notice. A five year fixed term is still a huge amount more stability, than you would get privately.

No-one wants to see the elderly shifted out of the neighbourhoods in which they have spent their lives, but it makes perfectly good sense to shift an elderly person or couple from the three or four-bedroom home in which they raised their children to a one or two-bedroom home down the street.

Especially as there is a family in need, waiting for that larger bedroom house.

The state housing provider should be judged on how adequately the most vulnerable are housed, not on how many homes it owns.

I agree, but sadly I am not sure Labour does.

If that means funding the building of new homes in Auckland and Wellington by selling homes in provincial areas, so be it. If that means reducing the oversupply of three-bedroom homes so it can build more one, two and five-bedroom properties, so be it.

And if it means transferring parts of its property portfolio to community organisations, as recommended by the advisory group, so be it.

Effectiveness, not ideology, should be the Government’s watchword.

Effectiveness not ideology? Now I am sure Labour won’t agree!

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Heatley looks set to make Labour’s housing policy workable

October 25th, 2010 at 9:00 am by David Farrar

Phil Heatley outlined on Q+A some quite radical changes to Housing NZ, but they are changes that would help those most in need – and in fact are long overdue changes necessary to make the model of state housing reinstituted by Labour workable.

Some on the left will try and whip up hysterical opposition to them, but people should be aware the group that recommended them includes the Auckland City Mission Diane Robertson and Major Campbell Roberts from the Salvation Army. And also to her credit Sue Bradford, who was a panelist, seemed quite supportive. So I suggest people resist knee-jerk reactions.

National introduced market rentals in the 1990s. This was highly controversial and unpopular, ans was reversed by Labour who campaigned on a change back. I don’t want to defend the market rentals but explain why they were done.

The idea behind market rentals was that an income based accommodation supplement was a fairer way to assist low income people into housing. It could take into account your exact level of income, the average rental price in your area etc and most of all applied to every New Zealander on a low income.

The idea was that if two families lived next door to each other on identical incomes and identical family sizes and in identical houses, they would both get the same level of support. Up until then the person in the state house got huge assistance, and the person in private accommodation got very little. Unless the number of state houses was so large as to cover every low income New Zealander, then some families unfairly were getting much better assistance than others. And in fact (as this report shows) it was not always the family with the greatest need who was in the state house.

However the market rentals policy was hugely unpopular, for a number of reasons. One reason was the Government failed to sell it well. People thought it was about increasing rental payments from poor families, and there was almost no focus on the fact that the Government would be helping many more low income families than previously.

It also had the problem in that it created a large number of people (around 300,000) who were modest “winners” and a smaller number of people (around 70,000) who were quite large “losers”, and those who are disadvantaged by a policy change will fight against it, while those advantaged by it not so much.

To be fair there were also some unforeseen consequences also, such as private sector landlords pushing prices up, due to state houses doing the same. That was genuinely undesirable, and possible one reason National has not returned to that policy even though it is clearly less discriminatory.

So we’re left with Labour’s policy which is that if you live in a state house, you get a much higher subsidy from the taxpayer – the SHAG calculates it as worth $8,000 a year compared to $4,000 a year from the Accommodation Supplement. There are a limited number of state houses, and one can not change the number of houses in stock dramatically or quickly. So you want those state houses to go those most in need. But I have always said to do that you need to evict people from their state houses if a more needy family is on the waiting list, and you also need to move tenants from larger to smaller homes as their kids leave home.

The SHAG has recommended pretty much exactly that, but in a gentle way. Their recommendations are what you need to make Labour’s policy better for low income families. It means the greatest assistance goes to those with the greatest need.

SHAG’s report is here. Here are extracts from Q+A:

PHIL HEATLEY – Housing Minister.
Well, that’s certainly a recommendation in the report is that any new tenants coming on from now on would be under the understanding that they may just have the house for three years, five years or 10 years, and then we review that tenancy. So the tenancy wouldn’t necessarily end in that time, but we’d review the tenancy and see if their circumstances have changed.

This seems very sensible. Exiting tenants entered under a policy where their expectation is they can remain in the house for life so long as they are good tenants. I like the idea in future that you set at the beginning an expectation of review at a certain date. If their circumstances have improved and there are much needier families on the waiting list, then logically one would allocate to the family with the greater need.

MR HEATLEY So what would happen is& Well, a good example actually is someone’s in a state house – you know, they’ve had it for 10 years. When they first moved in, they had three kids, they were married, it was a four-bedroom. Now they’re alone or there’s just two of them. They just need one bedroom.

This is one of the real problems. The kids have left and now tenants are in a house with lots of spare rooms, while a family on the waiting list with three kids can’t get a house.

Some people will say the answer is just to build more state houses, but there is no way the state housing stock will increase from 70,000 to over 300,000 (the numbers on the accom supplement).

GUYON OK, the other big mismatch you’ve got is the type of houses that you’ve actually got. You’ve got far too many two- and three-bedroom houses. You’ve got a lot of people rattling around in houses that are too big for them. I think that you said there were 2700 houses with spare bedrooms, and about a similar number with crowded bedrooms. Are you going to have to engage in a large-scale selling and buying programme, in terms of selling houses you don’t need and buying ones that are fit for purpose?

MR HEATLEY That’s correct. In fact, we’ve got two types of mismatch, as you describe. The first one is that we’ve too many three-bedroom houses – in fact, 10,000 too many – and we haven’t got enough one-bedroom houses for very small families – obviously people living on their own – and certainly not enough four- or five-bedroom houses. So what we’re going to do is send a very clear signal that we want to realign all that, so we’re going to need to dispose of all our three-bedroom houses and buy smaller and larger ones.

No doubt some will call this privatisation! This does show the difficulties with the current policy – it is very hard to match the demand with supply.

GUYON Will the numbers stay essentially the same at roughly 70,000? Or will you increase it or decrease it?

MR HEATLEY What we’ve said quite clearly, and we certainly said to the people that drew up the report for us, is that we’re committed to state housing, we’re committed to Housing New Zealand&

GUYON On what numbers?

MR HEATLEY  &we’re committed to income-related rents.

GUYON Yeah, we’ll talk about that in a second. What numbers?

MR HEATLEY In terms of numbers of state houses, what we’ve said is we want to house more people in social housing. We want it to be a combination of state housing and combination of houses provided by others in the community-housing sector. So we are going to move away from counting the number of state houses we own or manage. …

GUYON That’s fascinating. So at the moment, there’s a ministerial directive that says you have to own just over 70,000 state houses by the middle of next year.

MR HEATLEY Um, no, the ministerial directive that’s happened over a number of decades under National and Labour, and it’s continued as they’ve gone in and out of government, is to increase the number of state houses.

GUYON OK, but roughly it’s 70,000.

MR HEATLEY That’s correct. And we’re saying&

GUYON So you’re abandoning that target? You’re abandoning any target or minimum number of houses that you need to own?

MR HEATLEY Yes, what we’re doing&

GUYON That’s a massive change.

MR HEATLEY It is, but what we’re saying now is that we want to increase the number of people housed, and we want to increase the amount of social housing in New Zealand, but we can’t do it alone. The government’s in no position to keep buying state houses the way we have been, so we’re going to slow down and probably stop and go to the community-housing sector, who have put up their hand, and they say this in their report, and say, ‘Look, we want to get into housing the most vulnerable.’ In fact, many housing organisations are specialist in their area – disabled, mentally ill, elderly.  ‘And we actually need capital, cash or houses for you as the government to inject into us to grow.’ And we’re prepared to look at that.

This is quite an important exchange. Shifting the focus from whether HSNZ has 70,000 or 70,500 or 71,000 state houses to a focus on how many people are in social housing, which includes the Salvation Army, some local authorities etc.

MR HEATLEY Well, no. What the panel says& And, you know, we had someone on the panel from Auckland City Mission, someone from the Salvation Army, someone from the New Zealand Housing Foundation. They’ve come back and they’ve said, ‘No, what we would like you to do is transfer a whole lot of housing stock or cash or land into our community-housing organisations, which are not-for-profit organisations&’

GUYON On that sort of level? 20%?

MR HEATLEY They’re suggesting moving very fast. If the ministers make a decision, we’re going to have to consider our tenants, not upsetting people’s lives. But the important thing I’d like to pick up on is this is not privatisation. This would mean a state house was transferred to a not-for-profit community-housing organisation who would have to retain the house. They couldn’t sell it, otherwise it would have to come back to us. And they would have to house the most vulnerable. They couldn’t just get, you know, anyone in that house.

As I said at the beginning, the members of SHAG who recommended this include reps from City Mission, Salvation Army etc. I think they have done an excellent job at analysing the problems with the current policy and proposing some changes which will provide better assistance to those most in need.

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Housing NZ’s IT

April 5th, 2010 at 2:00 pm by David Farrar

The Dom Post reports:

A spokeswoman for newly reinstated Housing Minister Phil Heatley says he does not believe he will have a final say on plans by Housing New Zealand to spend $43 million replacing its software systems.

A pity, as there are some real questions about it.

The board of the Crown-owned corporation approved the business case for its Enterprise Transformation Programme last week. The spokeswoman says the project is an operational matter.

Two whistleblowers, two former managers and Roger Phare, operating officer at existing software supplier Technology One, have questioned aspects of the project, for which a bevy of consulting firms has been paid more than $6m for advice.

Yep that is $6 million just for advice on its IT.

Housing New Zealand has so far refused to detail projected annual savings of $70 million that have been called into question by opposition housing spokeswoman Moana Mackey, or comment on claims that it paid consultants up to $600 an hour and created a potential conflict of interest for strategic adviser Deloitte.

Now the very top lawyers in NZ do charge $600 an hour, but I’ve never heard of that level of charging on an IT project. You might pay it for top commercial lawyers in billion dollar deals, but rare for IT projects.

An earlier story in the Dom Post reported:

A whistleblower has claimed Housing New Zealand may have created a potential conflict of interest for a consulting firm that is providing advice for a $43.6 million information technology project. …

Housing New Zealand would not say whether Deloitte’s contract as strategic adviser precluded the consulting firm from securing any work implementing software that would be purchased as a result of the project.

Computer Society chief executive Paul Matthews says organisations need not preclude consultants that provide them with strategic advice from also having a role in implementing any solution, but it would be unusual and “not particularly good practice”.

“It really depends on the circumstances. With most conflict-of- interest situations, if the terms in the conflict of interest are clear and they are open and transparent and all parties are aware of it, then in some circumstances they may not be precluded, but you would expect in a larger project they would be.”

Housing New Zealand last month acknowledged a steering group comprised of senior executives had over- ruled a recommendation by an evaluation panel in appointing Deloitte. It said the panel had over- stepped its brief in recommending a rival firm do the job.

So the evaluation panel recommended another firm, and this was over-ruled by executives? This is the point as which you get nervous also.

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State house fraud

October 8th, 2009 at 9:37 am by David Farrar

The Herald reports:

A man is facing allegations he lived off the taxpayer in state housing while he was a landlord owning two properties.

Allan Wilkins, a beneficiary, allegedly lived in two state houses – first in the city centre then in Orakei – over a period of three years. …

The Crown says during the three years that Wilkins was living in the two Housing NZ Corporation places and receiving big rent subsidies, he also owned 149 Browns Rd at Wiri and 2 Sheehan Ave in Papakura.

The Wiri property is valued at $260,000 and the Papakura house is estimated at $200,000.

Dale Dufty, prosecuting, said more charges would be laid against Wilkins over his tenancies which had defrauded the state of more than $68,000.

Now this is a rare case, but it does highlight one of the problems of providing housing assistance through cheap housing, rather than through income support. It provides an incentive for people to qualify for a state house by not disclosing other property.

I note Wilkins is on a benefit. I presume he was receiving rental income from his other properties, so WINZ may want to be checking that out also.

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State House Tenants can now buy their homes

September 16th, 2009 at 1:36 pm by David Farrar

Phil Heatley announced yesterday:

From today those state house tenants in a position to buy the house they live in can do so, says Housing Minister Phil Heatley.

Over the next week, Housing New Zealand will be approaching about 3,800 state tenants who pay market rent and live in a home that is available for purchase, to make them aware of the opportunity.

Letting a family who may have lived in a state house for years and years, maybe even decades, buy the house is such common sense, you have to wonder if anyone could possibly think it is a bad idea. Well Labour do of course/

Marty G at The Standard has said he is not oppossed automatically to state house sales, and proposes four conditions:

Housing NZ must use all revenue from sales to buy new houses – we don’t want the amount of housing available for the most needy decreasing.

I’m surprised he does not realise that is Government policy – that the money from sales will go to purchase new housing.

It must not sell all the houses in wealthy areas only to construct state house only neighbourhoods – the poor and the wealthy should not be physically separated by government policy.

Now having just argued for the importance of not decreasing the amount of state housing available, Marty then argues for a measure that will decrease the number of available houses.

The median house price in Manurewa is $250,000. In Mt Eden is is $600,000. If you sell 10 houses in Manurewa and replace them with houses in Mt Eden you can only afford four houses.

I’d rather have ten families in state houses, than four, for the same investment.

There are more than enough modestly priced areas to have state houses, without creating state house only neighbourhoods.

The houses must only be bought by their current tenants – we don’t want them claimed by wealthy investors, locking out the poor.

That also happens to be Government policy. I note Marty makes a classic mistake by assuming that people living in state houses are poor. They certainly were poor when they first moved in, but the 3,800 paying market rents are no longer poor. You could argue that their houses should be sold to anyone, with them just given first option.

This is the problem of providing housing assistance through having lower rentals for state houses, as opposed to income assistance regardless of who your landlord is.  To provide maximum equity, you really should evict tenants from their state houses once their income rises so they no longer are “poor”, But no one does that because of the fuss it would create. But what this means is that you have people on a waiting list for a state house who are far worse off income wise than the current tenants.

Likewise when the number of people living in a state house reduces (as kids leave home), you should ideally shift them to a smaller house. Not doing so again leaves more needy tenants on the waiting list (and there will always be a waiting list). This is one reason why I think income assistance rather than lower rentals is a better policy approach.

There must be a caveat on the titles to the properties preventing them being rented out by a private landlord – that way they can’t be bought out by property investors as happened in the 1990s.

Now this is just bizarre. If for example an elderly couple need to more into a retirement home, they can’t rent out the house they own. Blaise Drinkwater responds to this point on his blog:

What Marty G wants to do is sell the house to the tenant—because the tenant is Needy and home-ownership is A Good Thing—, but then dictate who this buyer may sell the asset to at a future date. This kneecaps the value of the house: to restrict the pool of potential buyers is to decrease demand artificially. The needy tenant is disadvantaged by this.

There is envy implicit in Marty G’s calculus: property investors must not be allowed to own ex-state houses because they’re rich and that’s bad. This leads him to a policy preference designed to restrict the wealth of the wealthy by diminishing their economic opportunities, but has as a side-effect: it also restricts the wealth of the needy by diminishing their economic opportunity. It turns out you can’t have one without the other.

Repeat after me: if you outlaw a voluntary transaction, you’re hurting all the parties that would benefit from that transaction, and not just the ones you’re trying to hurt.

Blaise sums it up well.

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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.

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Is there anything the left do not label racist?

May 27th, 2009 at 11:10 am by David Farrar

The Dom Post reports:

Housing New Zealand is trying to stop people being bailed or paroled to state houses without its permission.

But critics label the move racist and say it will increase poverty while swelling prison inmate numbers.

My theory is peopel call things racist as a way of avoiding intelligent debate on an issue. It is a way of saying only bad racist people can want to do that.

A clause added into new tenancy contracts this month demands that written permission be gained for anyone bailed, paroled or put on home detention at a state house with the exception of those listed on the tenancy agreement and their partners.

So it is not about tenants themselves, or even their partners, but about whether the landlord should have a say in whether someone charged or convicted of a crime should be able to live there.

Housing Minister Phil Heatley said the clause was not about targeting law-breakers but avoiding problems including someone being sent to a state house who might put themselves or the community at risk.

Might stop paedophiles being paroled to a friend’s house near a school. Mind you that should not be up to Housing NZ to stop.

Council for Civil Liberties chairman Michael Bott said the measure was racist, as Maori and Pacific Islanders were the most heavily represented in the court and prison system.

By Bott’s logic increasing prison sentences is racist. Hell even having prisons is racist.

It was an “offensive presumption of guilt” as many on bail were not convicted, and the move would boost prison populations if low-risk inmates were held back from parole.

How many is many? 40%? 35%? 30%? 5%? And as far as I can see this is not about people being refused parole – just Housing NZ having to agree to them living in a state house – I suspect Housing NZ will not be giving blanket nos, but exercising discretion over which property is appropriate.

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National’s Housing Policy

July 23rd, 2008 at 11:30 am by David Farrar

It should be of no surprise to anyone that National is not planning to go back to market rents for state house tenants. It was arguably the most unpopular (yet most misunderstood) of National’s policies in the 1990s. National did not plan to change back in either 2002 or 2005.

Phil Heatley has outlined some aspects of National’s policy.

Housing spokesman Phil Heatley told a Housing Institute seminar in Waitakere yesterday that National would give back to Housing New Zealand tenants the right to buy their houses.

They had this right until the Labour Party won the 1999 election.

Labour call this privatisation but I think allowing state tenants to buy the homes they may have lived in for decades is a great thing.

“If they purchase their state home, we will replace that home within the housing stock so as to lift someone else off the waiting list,” he said.

“We won’t be running down the state housing stock. We acknowledge that we need it.”

If one has income related rents for state houses, then there will be great demand for them and hence stock does need to be maintained or increased. I personally prefer housing assistance being delivered to low income households regardless of who their landlord is – but that is now what the public will accept, so one has to make the current system work.

Labour’s Housing Minister, Maryan Street, told the seminar that 9 per cent of Housing NZ tenants already paid market rents because of their high incomes.

So no social benefit is being generated by those tenants being in Housing NZ houses. In theory they should be evicted to make room for a lower income family. But that is politically unviable. But National’s policy of allowing them to buy the state house will allow a new house to be purchased which can be targeted to low income families.

UPDATE: The Green’s Frog Blog say they support the policy as sensible and a good system for getting people into their own homes.

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Blaming the Board

June 3rd, 2008 at 12:12 pm by David Farrar

Helen Clark is blaming the Housing NZ Board for their luxury conference venues. To quote NZPA:

Ministers knew nothing about Housing New Zealand’s “unbelievable” staff conferences in luxury resorts, Prime Minister Helen Clark said today. …

“These things never came to the attention of ministers,” she said on NewstalkZB.

“They didn’t know. This is a corporation which has an independent board, it has a chief executive who reports to that board.” …

Asked what she thought about the conferences, Miss Clark replied: “Unbelievable. My views are very clear on this … I do not expect them to be accommodating themselves in anything remotely like luxury accommodation.

“Frankly, I don’t know what they thought they were doing.”

So it is nothing to do with Helen, or with Maryan Street her Minister of Housing. It is all the fault of that nasty Housing NZ Board.

What a pity though that Helen’s Government appoints the Housing NZ Board. And who did they appoint to the Housing NZ Board, up until 2005?

Well none other than Maryan Street!

Oh dear.

Let us enjoy how they distance themselves from that one. My prediction is she was “confused” or was never briefed.

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WINZ Conference Mark II

May 28th, 2008 at 6:57 am by David Farrar

Another sign of third termitis. Most will recall the fuss over a WINZ conference in 1999 which cost $235,000.

Phil Heatley revealed yesterday that Hosuing NZ has spent $65,000 on a conference for 94 managers at the luxury Tongariro Lodge.

The third termitis is the staunch defence of it by Minister Maryan Street, instead of realising the political impact of holding a conference in a luxury resort.

There are two issues when it comes to public service conferences – cost and location.

In terms of cost, the conference cost around $700 a person. It isn’t an outrageous amount, but neither is it as cheap as if you held the conference in Auckland or Wellington where most of the staff are.

The bigger issue is location. A luxury lodge location is a bad look for a taxpayer funded agency. Doesn’t matter if you get a discount. And if you are WINZ or Housing NZ – an agency tasked with helping low income families especially, it is even more inappropriate.

Street should have acknowledged this, rather than defended the decision.

If you hold the conference at the Rotorua Novotel or the Dunedin Holiday Inn, no one will criticise you for it.

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State Houses being privatised

April 11th, 2008 at 7:00 am by David Farrar

Housing NZ is selling off some state houses. Obviously this indicates that Slippery Maryan is committed to a secret agenda of privatisation.

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