The New Zealand Approach to Housing Affordability

The New Zealand Labor Government went to the last election boldly declaring they would ‘fix the housing crisis’. It is not hard to understand how they won support for it when you realise that, according to Labor’s policy, 40,000 children are admitted to hospital every year with illnesses related to living in unhealthy houses. But the response is truly revolutionary.

House construction

The New Zealand Government will partner with private construction companies to build 100,000 affordable houses over 10 years through a $2 billion investment, incredibly for sale onto the open market.

The government will dictate the size and price of houses, ensure they are built where they are needed, require that houses are efficient to heat and cool and ensuring adequate transport, other infrastructure, and local parks.

Houses can only be bought by first homeowners and if they are sold within 5 years any capital gains must be handed back to the government. Income from house sales will be put back into housing projects

On the down-side, the government intends to change planning rules to allow these houses to be, in their own words, ‘fast-tracked’, including removing the existing growth boundary for Auckland and will make all unallocated Crown land available for the program.

Crackdown on speculators

The New Zealand government is committed to banning foreign speculators from buying existing houses and will only allow citizens and permanent residents to buy them. It will phase out negative gearing by speculators over five years and use the tax revenue that is saved to invest in the housing programs.

 

Investing in warm, dry homes

The Labor government will assist homeowners and landlords to make their houses warm and healthy to live in with grants of up to $2,000 per dwelling to pay for up to 50 percent of the costs of insulation upgrades and double glazing or to install a fixed clean form of heating. The government has the goal of making 600,000 houses warmer and dryer.

The Government has promised to introduce the Healthy Homes Bill which will require all rentals to be warm and dry and support climate change goals. It is unclear how rental housing standards for existing houses will be enforced.

Government owned housing

The New Zealand Labor government promised to reform Housing New Zealand to stop the sale of government-owned houses and stop dividend payments to the government. All income will be reinvested into new houses and maintenance. Unusually they promise to build more government houses and but did not have targets.

Peter McGlone

TCT Director