Armstrong on Kiwibuild
John Armstrong writes:
When Labour unfurled its flagship KiwiBuild policy back in 2012, the party thought it had come up with something special.
It thought it was onto an absolute winner.
And with good reason. The policy had a number of virtues for a party in Opposition, the chief one being its sheer simplicity.
Anyone could comprehend the policy’s objective of building 100,000 “affordable” new houses for first-home buyers over 10 years
And it was called Kiwibuild, not Kiwibuy.
It is still early days, but the feeling lurks that a policy which was such a valuable weapon in Opposition may not be quite the mechanism for easing the chronic shortage of “affordable” housing that Labour is hoping it will prove to be.
KiwiBuild may work in theory. Getting it to mesh with the forces operating in the wider property market may turn out to be an entirely different story. …
So far, all Twyford has to show for his efforts are two housing developments, the first of which is the plan to build up to 4000 homes on land purchased from Unitec in Mt Albert. Between 30 and 40 per cent of those homes will be built under the KiwiBuild banner.
Which were planned and consented under National.
Such a commotion will be trifling in comparison to the anger and indignation which will erupt if taxpayers end up underwriting property speculators who go bust.
That may sound far fetched. But the time it is going to take to get construction under way on large projects like the one planned for the Unitec site has seen the Government opt for buying properties off the plans of private developers.
The latter are finding it more difficult to get the financial backing from banks and other sources willing to lend the kind of money required to get building on large subdivisions under way.
Twyford has indicated that he is willing to have taxpayers underwrite such developments.
This is dicey stuff – politically as well as financially. Whatever safeguards might be in place, when property developers go belly up, there is only one thing that you can guarantee – namely that every one ends up being a loser.
Corporate welfare for property developers isn’t quite what the public thought they were getting.