Move where the living is easier

The root of Auckland’s housing affordability problem is an imbalance between supply and demand.

Increasing supply takes time, reducing demand can happen faster, as fast as people move somewhere else where the living is easier as Liam Hehir has:

I am 30 years old, married and the father of two. Our family lives in a big villa on a large section in a quiet street.

Crime is low and the neighbours are nice. We are close enough to my office that the daily commute is rarely more than 20 minutes.

We’ve managed this despite not having wealthy parents, never winning Lotto and having sizeable student loans. And because I am the sole breadwinner, we actually earn less than the average household income.  

With a mortgage less than three times my annual salary, however, we are confident we can manage things on one income for a while. 

If you’ve read the papers lately, you might think this is quite the feat for a pair of millennials. As you will have heard (often and loudly), our cohort likes to think of itself as the hardest done by generation this side of the Black Death.  Some would go so far as to argue that the peasants of that era had a better shot at home ownership than we do.

What’s our secret? Well, it all comes down to one weird old tip: We choose not to live in Auckland. 

Instead, we have set up home in a small country village just outside of Palmerston North.

Don’t let too many people know about this, but there’s no law that says everyone has to live in Auckland.

You may be surprised to learn that Kiwis are pretty much free to live wherever they want. There’s actually nothing stopping young New Zealanders from buying houses in places like Palmerston North – or Invercargill, Whanganui, Timaru or Whangarei. . . 

People choose to live in or move to Auckland for many reasons, cheaper housing isn’t one of them. If they want a reasonable house for a reasonable price that’s not where they should be looking or living.

There are trade-offs. When you live in the provinces, you do not just go out for coffee at 10.30 on a Tuesday evening and expect places to be open. And while there are some very good bars and clubs, it is true that you don’t get the variation and choice on offer in the big city. 

But if you’re ready to be a homeowner, chances are that much of that is out of your system anyway.  . .

If you’ve mortgaged yourselves to the hilt you won’t have spare money for enjoying city attractions and life away from Auckland has other compensations. You won’t waste time and money on the stop-start crawl that is too-often part of driving there, for starters.

It also is true that if you buy in the provinces, your home is unlikely to appreciate in the manner of the inflationary Auckland market. But this is only a big problem if you see home ownership as an investment opportunity.

If you take the quaint view that a home is primarily a place to live (and that spending on it is consumption rather than speculation) then the slower market becomes less of a problem.

Here’s a second secret: there are forms of investment other than real estate. If you have a smaller mortgage, you can take the money you’ve saved and invest it in other things. And if you don’t know how to invest, you can ask a professional to do it. You can even get your bank to manage it for you.

There are even some people out there who say that a diverse set of investments is safer than pouring all your income into one property in the hopes that the market will continue to inflate forever and ever. 

Sounds crazy, right?

But what about work? If you’ve got a strong back, you should be able to find work in the provinces. 

Remember, these are the regions where farmers have literally have had to hire tens of thousands of migrants to fill jobs Kiwis don’t want to do. Of course, it might mean putting on hold your dreams of being a doghouse interior design consultant or owning a restaurant that specialises in artisan toast.

As the Discovery Channel’s Mike Rowe advises, “don’t pursue your passion, chase opportunity.”

Some of the jobs available out here in the regions might not always be pleasant or glamorous (I can attest from experience) but they are perfectly respectable. You might not start out on megabucks, but the cost of living is low. You have to start somewhere.

Some of those not so pleasant jobs pay well and there’s plenty of pleasant jobs in the provinces too.

Technology means you don’t necessarily have to live where your market is. Garrick Tremain, one of the country’s best cartoonists lives at the foot of Coronet Peak; a couple in rural North Otago make a very good living buying and selling furniture on-line; booming tourism has provided business opportunities in all sorts of formerly out-of-the-way places.

It’s not only small businesses that thrive out of Auckland. Toyota has its headquarters in Palmerston North and Ravensdown is based on the outskirts of Christchurch.

We are the descendants of enterprising people. In centuries past, our ancestors came to these islands by waka and sail, making sacrifices and taking risks along the way because they sensed the chance to make something for themselves in a new place. Many of their successors seem to be too timid or too entitled to venture south of the Bombay Hills. 

More fool them.

There is life, and very good living, out of our biggest city.

Those used to higher temperatures might find it a bit cool much further south, but they’ll be able to afford a warm, dry home and as much heating and as many layers of merino as they need with the money they’re not paying for an Auckland house.

52 Responses to Move where the living is easier

  1. There are always excuses from the house-price-whiners when I sum all this up for them in conversation. However, as the final line in Hehir’s essay of the obvious says; more fool them!

    The jobs aren’t low paying though are they? A farm manager job is attainable after a few years hard work and earns from $70,000 initially to $130,000 with experience with perks that lower the already low cost of living.

  2. Dave Kennedy says:

    Queenstown needs to have service staff for the hotels and restaurants etc but the workers have nowhere to live.
    http://www.stuff.co.nz/business/money/75504590/Severe-shortage-of-Queenstown-rental-housing-hits-summer-workforce

    Auckland also has to have people prepared to work in a range of lower paid service jobs to continue to function, if everyone who couldn’t afford to live in Auckland moved out there won’t be enough jobs elswhere, there are aren’t 10,000+ farm manager jobs available.

    According to Trademe there are currently 4170 jobs being advertised in Auckland and 61 in Gisborne. It is a dilemma because it may be more affordable to live elsewhere but only if you can get a job.

    There is a teaching shortage in Auckland because it is now too expensive for many teachers to live in the city where the teaching jobs exist.
    http://m.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11552898

    This is what happens when you don’t build enough low costs housing and allow the property bubble to continue.

    “Garrick Tremain, one of the country’s best cartoonists lives at the foot of Coronet Peak”
    This isn’t an option for a nurse or a teacher aid or a hairdresser. Many people who have trained and have skills in demand can no longer live where the greatest demand for their skills exists without a subsidy.
    http://www.radionz.co.nz/national/programmes/insight/audio/201783089/insight-for-20-december-2015-more-pay-for-living-in-auckland

    We already spend $6 billion a year on wage and accommodation subsidies and surely this is just ambulance at the bottom of the cliff stuff? We should be dealing with the root causes of the problems.

  3. Paranormal says:

    Interesting DK – you rail against house prices in Auckland but aren’t prepared to do the one thing that will fix the supply side to make more cost effective housing available. Auckland house prices are as a result of the Metropolitan Urban Limit strangling supply over years. If it was removed then prices would correct in the near term.

    You also show up the failure that is union one size fits all awards. Teachers pay is far too complicated. If there was even a modicum of flexibility it would solve a lot of problems

  4. Dave Kennedy says:

    Paranormal, you are just repeating Government spin. The issue is far more complex than just the urban limit. 30,000 Auckland houses were empty when the 2013 census was conducted and at least 20,000 were not inhabited. The high levels of capital gain means that many owners are simply land banking and are not even bothered to have them available for rent.

    Extending the city limits for development is also no guarantee that the houses needed will be built. There needs to be around 30,000 low cost and state houses built to cater for the mass of low income earners who are now blocked from even affording a rental house. The Government has made no commitment to ensuring any % will be tagged for lower cost housing and it is not profitable for private developers to build such houses. You only have to look at how the Government has used its own land, what cheaper housing that was to be built has been drastically reduced and no social housing has been included.

    “Teachers pay is far too complicated. If there was even a modicum of flexibility it would solve a lot of problems.”
    I agree, however this not the union’s fault because we have advocated fora far simpler pay scales for years and even got agreement for paying some good classroom teachers more (those that demonstrate higher levels of teaching ability and leadership). The Government’s own proposals have just complicated our pay further.

  5. Dave Kennedy says:

    Sorry, I meant to include this link to show how the Government has made no real effort to increase the numbers of genuine low cost homes that are needed by Auckland low waged workers (Hobsonville is being developed on Government owned land):
    http://www.hobsonvillepoint.co.nz/

    Only half of the state houses being removed from Glen Innes are going to be replaced.

  6. Will says:

    Dave, I simply do not believe you can be so obtuse, but I’ve been wrong before. I’ll try to spell it out.

    ANY form of rationing plays into the hands of land-bankers and speculators.

    Remove the MUL’s and it’s all over. There are no more potential gains which means there will be a mad rush to get empty houses sold or rented and undeveloped land built on. It’s a classic example of politicians wailing for regulations to solve a problem they, themselves created.

  7. Mr E says:

    “30,000 Auckland houses were empty when the 2013 census was conducted”

    There were around 500k houses back then. Accordingly 6% were unoccupied.

    In 2013 there were around 22.5k houses in Invercargill. 1344 or 6% were unoccupied.

    Must be amazing capital gain, no need
    to rent and land banking in Invercargill.

    Honestly folks. It is hard not to shake ones head.

  8. Dave Kennedy says:

    Will, who is talking about rationing, I certainly aren’t. Any understanding of basic economics knows that that the value of anything is dependent on demand and supply. This Government has only mildly addressed the supply side while constantly feeding the demand side.

    The capital gain for property investment provides the greatest return of any investment at the moment. Capital gains tax is largely non existent and there are few minimum standards for rentals. You can even rent out a garage for $400 dollars a week. In Queenstown it seems perfectly reasonable to charge $1200 a week for a basic three bedroom house and have 12 or more people living in it with just one bathroom.

    Removing the MULs will only provide a partial answer because you still have to spend money on servicing new developments and ensuring that transport systems are put in place. Auckland is not a dense city and one of the factors that a major city has to deal with is the nimbyism and patch protection. Many want to ensure that the exclusive elements of their suburb remains to retain values. they don’t want social housing nearby or apartment buildings. It is far cheaper to grow density and keep the city as compact as possible.

    The greatest demand is for low cost or social housing, there has been no supply growth in both for almost 30 years, so no wonder we have a massive shortage. In the last 40 years National has determinedly reduced the numbers of state housing and Labour has tried to build numbers. Currently we have had eight years of diminishing numbers of state houses and little maintenance (behind by $1.5 billion according to English).
    http://www.teara.govt.nz/en/graph/32421/total-state-housing-stock

    The result has been when a family in genuine need requires an urgent safety net of emergency accommodation (home burnt down, sick child, lost employment, marriage breakup, abusive relationship…) it takes around 4 weeks to get an appointment and up to two years to get to the top of the waiting list. Meanwhile families are forced to use dodgy private boarding houses, their car or a friend’s garage. Motels will now be paid for for a week and then a user pay approach, motels aren’t cheap. Especially if you have children with illnesses and disabilities, that is too long to wait and expecting families to pay back motel bills of $1000 dollars a week because they have no other choice is totally unreasonable.

    MULs are not the magic bullet!

  9. Dave Kennedy says:

    You are right Mr E in one respects, the % of unoccupied houses is actually slightly lower in Auckland than elsewhere and this is widely accepted.

    The reasons for empty houses would be different in each area and in parts of Northland or Ohai it is because no one wants to live there. That is not the case in Auckland, there is massive pressure for housing but still 20,000 are unoccupied, therefore there must be an element of land banking and speculation occurring that isn’t happening elsewhere. In fact there is heaps of evidence to support that if you are bothered to look for it:

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11634956
    https://www.tvnz.co.nz/one-news/new-zealand/ghost-houses-hit-auckland-renting-market

    Metro Magazine wrote a whole article on the this issue:
    http://www.metromag.co.nz/city-life/property/running-on-empty/

    In Queenstown the issue is more one of land banking and nimbyism according to the local council when I met with them in 2014. There is a good deal of land that is classified as residential but developers like to wring maximum prices out of it and they also refuse to build a mixture of housing. Plans to build worker accommodation has been met with huge protests.

    Each area is different Mr E and it pays to scratch below the surface to find out what they are.

  10. Will says:

    It’s not quite so simple when speculators are involved Dave. Then it’s not just supply and demand, but “potential” supply and demand. Removing restrictions lowers the potential gains that keep speculators interested.

  11. Mr E says:

    Dave,

    “You are right Mr E in one respects, the % of unoccupied houses is actually slightly lower in Auckland than elsewhere and this is widely accepted”

    So lets not dwell on the reasons of unoccupation. It is no big deal, in the city. It is less that other cities.

    As Nick Smith points out ” there is no way of knowing how many of Auckland’s 22,000 unoccupied properties are being deliberately left empty.”

    Oddly Left have concluded that there is land banking happening there more than other cities. The basis for this?

    “One Mount Albert villa has been empty for years”

    Interestingly that house is also being squatted in. Probably making it very very difficult to sell. And the left call this land banking?

    I think your first article is more likely to represent a proportion of unoccupied housing. The rate of housing turnover.

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11631208

    When a house it sold, it is often hard to tenant. When a house goes onto the market tenants may look to shift. If they do, it is difficult to re tenant with a ‘for sale’ sign on it. This will increase the rate of ‘unoccupation’. But that is not land baking.

    I think factoring in house turnover, and the low ‘unoccupation’ rate, land banking in the city is likely to be lower than other cities.

    That seems evident.

  12. Dave Kennedy says:

    Will, I’m not discounting it entirely, but you have to admit that if you desperately need at least 30,000 social and low cost houses then the MULs aren’t a magic bullet. From my links it does seem that speculation and empty houses are an issue and if 1,000 of the 22,000 unoccupied houses became available that would make a difference to 1,000 families. Surely multiple approaches must be considered and just making more land available to developers won’t directly deal with homeless crisis (or challenge). It would take several years to plan a new development and put in the necessary infrastructure and services and for a family living in a car, and on the minimum wage, that is not a solution that would work for them.

    The normally disciplined National cabinet seem a little frazzled on this issue and are grasping at straws:
    http://www.stuff.co.nz/national/politics/80404662/social-housing-minister-paula-bennett-hits-back-at-media-over-the-word-crisis

  13. Dave Kennedy says:

    “So lets not dwell on the reasons of unoccupation”
    Mr E, lets do because if 1,000 of those houses can be made available, then that’s huge for those families.

    That Nick Smith is so ignorant of the causes of empty houses when there has been a potential issue for many years is appalling. The level of ignorance and lack of compassion in this government is being revealed more and more each day.

    A high rate of turnover is a sign of rampant speculation.

  14. Will says:

    I would not worry about low cost houses. Just get out of the way and allow those who can build what they want. The houses they leave behind will become low cost.

    If you still can’t afford it then don’t live in Auckland, which is what the article suggests.

  15. Mr E says:

    Dave,

    “That Nick Smith is so ignorant of the causes of empty houses”

    It appears that Nick likes to act on facts – not imaginations.

    By now the left would have illogically written a heap of laws to control land banking when the reality is it is probably a non issue.

    A logical factual approach is the sensible way forward. Not an imaginary one.

  16. Dave Kennedy says:

    “The houses they leave behind will become low cost.”
    The fact that you actually believe that is a concern. In many areas in Auckland the idea of low cost housing or social housing existing in their area would be a concern. It just doesn’t work like that. A poorly maintained house in a sought after area is still not low cost housing, Will. You have no idea.

  17. Will says:

    So you think the tax-payer should build new houses in sought after areas, in one of the most expensive cities in the world, for people with no hope of paying for them.

    You’re right, I have no idea why anyone would want to do that. You will turn Auckland into the modern equivalent of a Greek city-state, effectively enslaving the provinces for its own benefit.

  18. Dave Kennedy says:

    Will I guess a lot depends on your idea of what makes a functional city. The fact that Auckland has become the most expensive city in the world is due to an overinflated property market with few controls on the demand side and a lack of regional development.

    If you think that the only people who should live in a place are those who can afford it, it leaves the problem of where the hundreds of thousands of low waged supporting workers should live.

    At one time town planners and those who led the building of social housing built mixed communities. This allowed for people who do useful work in a community or want to retire in the same place to live in the same area. The cross pollination between different socio-economic groups is also important for developing greater cohesion in a society, and can lift the aspirations of those whose background can limit choices. Dividing communities according to wealth is actually not healthy and leads to the gated communities of those who see no need to engage with wider society and ghettos where the poor are forced to live. It appears you support this kind of society that allows market forces to dictate urban development.

    Support for home ownership, incomes and rental accommodation so that workers can still exist in an expensive city already exists. The Government can more readily build large numbers of lower cost housing (like the state houses before) that builds the supply for a demographic that no longer has a choice. The stock of lower cost housing has been static or reducing for 30 years and their condition has deteriorated. One option to manage the cost of building these is a rent to buy scheme where state house tenants can pay more than the basic rental (once they can afford it) to buy equity in the house. We want people to have the opportunity to lift themselves out of the state house trap and increase the private supply of lower cost homes too.

  19. Mr E says:

    “Dividing communities according to wealth is actually not healthy”

    And telling people where they should live is healthy?

    Do you think the Government should also tell us what to wear and what to say too?

  20. Dave Kennedy says:

    Mr E, growing healthy communities will involve compromises and town planners used to have a role in ensuring that new developments would support sustainable communities into the future. That would mean not only roads and sewerage systems etc, but a mixture of housing, retail and public transport.

    There should always be balance of choice and what is in the interests of the wider community when planning a city I would have thought.
    https://en.wikipedia.org/wiki/Urban_planning

    Integrating people of different socio-economic backgrounds in a single close-nit community does create problems and isn’t always successful (I accept that) but also creating greater distance and segregation between different levels of housing is also problematic. It can often mean that the poor are forced to live in areas that have few attractive elements (nice views, sunny aspects or close to amenities) and must accept traveling much further to get to their place of work.

    Perhaps you believe that a city should revolve around those with the most money and prioritise their needs first? That is an ideological standpoint that operates mostly in third world countries and banana republics but is becoming more widely supported in the US and other developed nations as more believe that the Government should not have a large role in providing social housing.

    The realisation of that is to move away from Seddon’s belief in 1905 that getting rid of slums and slum landlords and building decent houses for poor workers was in the interests of our wider society. The US is seeing greater tolerance for tent cities and the re-establishment of modern slums and it appears that the same is true of NZ. Families living in cars and garages is being tolerated here as the new normal for those earning the lowest incomes.

    https://placesjournal.org/article/tent-city-america/

    You clearly support the status quo of growing inequality.

  21. Mr e says:

    Dave,
    “You clearly support the status quo of growing inequality.”

    You are back to telling people what they think. A behaviour that you have been criticised here for several times.

  22. Paranormal says:

    DK, try taking the word ‘should’ out of your vocabulary and see how that changes your thinking.

  23. Dave Kennedy says:

    Mr E, you tell me what is wrong with my thinking but spend little time explaining your own. I can only surmise that if you don’t agree with me, that you support an opposing view. You are welcome to clarify what you really believe and what you think the Government could or should be doing. It is your own lack of clarity that forces me to guess.

    Paranormal the word ‘should’ makes sense in the right context. In New Zealand people should drive on the left hand side, there isn’t another option if you don’t want to run foul of our laws or kill someone.

    We ‘should’ build more social and lower cost houses because we are running behind demand by about 11,000 a year in Auckland alone. We have 4,500 households on urgent priority lists (these people desperately need a house, many living in cars and garages etc) but he Government is only budgeting to build 750.

    We SHOULD build more houses!

  24. Will says:

    I expect we WOULD if people like you didn’t make it so damned hard.

  25. Paranormal says:

    Just try it DK. You might find a release and freedom you just can’t imagine in your current mindset.

  26. Dave Kennedy says:

    My personal view is that if we have a massive shortage of good quality (energy efficient, warm and dry etc) houses then we need to build them. The private sector cannot do this alone because the profit margin involved in building houses for people on low incomes is nonexistent. Making more land available to developers will only ensure that any new developments will be aimed at those with the most money.

    We also have a problem that we have too many low skilled labourers in the building industry who lack supervision and not enough qualified building inspectors to monitor construction (hence the huge compliance failure rate with current building):
    http://www.stuff.co.nz/the-press/news/66776466/new-canterbury-homes-failing-building-surveys

    In Scandinavia and elsewhere, prefabricated, modular homes are common. These are high quality homes that are largely factory made where quality control is more easily managed and construction costs are minimised through the ability to by bulk material supplies, Because assembly in more automated environments are less labour intensive we wouldn’t have to import so many workers and houses could be made, and assembled on site, far more quickly.

    Currently we are short of around 30,000 homes and in Auckland we need around 11,000 a year to keep up with demand. We also have thousands of rented houses that should be replaced.

    Prefabricated houses seem the only sensible way to build large numbers of houses quickly and the Government needs to lead this by budgeting a reasonable amount, perhaps $5 billion (it is already subsidising private landlords by around $2 billion a year and and spending $12 billion on roads largely not cost effective).

    http://www.scandinavianhomes.com/
    http://www.greenhavenhomes.co.nz/

  27. Dave Kennedy says:

    oops “ability to buy bulk material supplies”

  28. Will says:

    That makes no sense to me. It’s like saying it is not economical to build cheap cars for poor people. You don’t have to. Wealthy people buy them, and the rest of us cross our fingers and buy them second and third hand. You just have to have enough of them. Really it’s amazing how good cheap cars are. Three or four thousand can get you a reliable machine with air-con, air bags, power steering etc.

  29. Paranormal says:

    So Dk, you’re suggesting we don’t employ labourers to help build homes, machines in factories can replace them. You’re happy to throw those currently labouring on building sites on the unemployment scrap heap? Thats going to make inequality even more pronounced.

    Green economics are clearly good for those with capital to make more money but not good for low paid workers. Who’d have thought.

  30. Mr E says:

    Will,
    I’d not panic about NZ building. Dave’s Scandinavian homes cost $2160/m2(NZD). That is more than it cost to build here.
    Sounds like Dave is promoting building expensive houses to rip off the poor.

    They’re weird ideas that I predict will be unpopular.

  31. Dave Kennedy says:

    Will, how many rich people are building houses in South Auckland to rejuvenate the housing stock where most of the poor live? Cars are easily transportable, houses not so much😉

    Paranormal, read my comment again. We don’t have enough internal capacity within the construction industry as it is and import 1,000s of foreign labourers as it is. My idea will make better use of our own workforce.

    Mr E, disingenuous again. A Google search reveals an existing prefab industry in NZ, the Scandinavian example was more about form rather than cost. Are you honestly suggesting that building good prefab homes in NZ would be more expensive then building the entire house on site as usually occurs here?

    The idea that allowing a rich to build more houses for themselves will end up supplying the poor with more housing is obvious nonsense (read my first para). This is just as ridiculous as saying cutting taxes to the rich will increase employment, the trickle down never occurred and it won’t with houses either.

  32. Name Withheld says:

    then (sic) building the entire house on site as usually occurs here?
    You are seriously out of touch if you believe the entire house is built on site these days. No surprise there of course).
    Assembled…Yes….Built…No.
    Tell us all where you last saw wall frames and roof trusses being built on site? Factories have existed for years to build these.

    My idea will make better use of our own workforce.
    Er…No.

  33. Dave Kennedy says:

    NW, I was basing my views on this report, do you have another that contradicts it?
    https://www.documentcloud.org/documents/1098034-prefabnz.html
    According to the report prefabrication would remove around $40,000 from the cost of building each house, the quality would be more consistent and compliance costs would be significantly reduced.

    Currently there is a huge range of approaches to construction, for the many small building firms that only employ a few men the majority of the house is constructed on site. Frames and roof trusses being constructed off site is a very low level form of prefabrication to me.

    I have difficulty understanding why you are so keen to support the status quo when there is such a huge and growing shortage of good, low budget homes. This Government calls a $550,000 house affordable in new housing developments and yet only those earning well above the median household income could afford to buy one.
    http://www.stuff.co.nz/auckland/74352945/Greater-number-of-homes-at-Hobsonville-Pt-to-be-affordable
    http://www.westpac.co.nz/home-loans/calculators/mortgage-repayments/

    The generally accepted formula for affordable housing is that the cost of housing (via mortgage or rent) does not exceed 30% of gross income. The majority of New Zealanders now pay far more than that. For the medan household income to pay for a $550,000 affordable house they would have to use 40-50% of their income to cover the mortgage and save $100,000 for the deposit before hand. We have a huge crisis and we need to do things differently.

  34. homepaddock says:

    The root cause of the problem in Auckland isn’t the cost of building the house – although that is more expensive than it could be. The problem there is the price of the land on which to put a house.

  35. Dave Kennedy says:

    “The problem there is the price of the land on which to put a house.”
    That is an issue, but Nick Smith solved that with the following announcement:

    “Around 500 hectares has been earmarked for development in areas zoned for residential housing in the city. The land is owned by education, defence and transport agencies and will not include public reserves.”

    Ele, what is desperately needed is low cost and social housing and Nick Smith has identified heaps of land within the city boundary where these can be built. At 25 houses per hectare the 500 hectares earmarked would allow around 12,000 houses to be built almost immediately. If there were some well designed blocks of flats then 100 units per hectare could be built. If that was done in 100 of those hectares that would mean 10,000 units.
    http://transportblog.co.nz/2012/02/10/what-does-density-look-like/

    The problem with greenfield developments is the cost of putting in the services and the Auckland City Council can’t afford this without selling assets or having the Government cover the costs. Of course once the assets are sold there will be nothing left to support any growth in the future.

    Why doesn’t the Government just get on and do what was done in the past and just build the houses needed, eight years of trying to fob off the responsibility hasn’t worked and underfunding Housing NZ and delaying maintenance has just made the situation so much worse. The problem now spreading all round the country.
    https://www.tvnz.co.nz/one-news/new-zealand/housing-crisis-hits-tauranga-forcing-families-into-garages-and-cars

    The budget delivered money for only 750 new houses to address the 30,000 shortfall.

    This is one HUGE crisis!

  36. Dave Kennedy says:

    Nothing to refute my arguments…?

  37. homepaddock says:

    No-one’s arguing about the need for more houses, quickly but I don’t share your view it’s the government’s job to do it.

  38. Dave Kennedy says:

    It’s the Government’s job to lead it Ele, who else is going to make sure the 30,000 houses are built…Developers? The Salvation Army? Auckland City Council?

    Since 1905 it was the Government who led the building of social housing until it reached a peak of 70,000 in 1991. In Invercargill there has none built since then and the maintenance has not been kept up on those left. National Governments since 1991 have sold off more houses than they have built and forced families into substandard private rentals supported by an accommodation supplement. That is why 40-50,000 children children a year are admitted to hospital for housing related illness.

    Whose job do you think it is now, if not the Government’s?

  39. Will says:

    You don’t really have arguments Dave, just misconceptions repeated over and over. With me, you started carrying on about “trickle down theory.” Should I explain that there is no such thing? That you probably mean “supply side” and that you don’t seem to understand what that is. I have the feeling I’ve taken the trouble to go over all this stuff before and here we are again.

    Just can’t be bothered doing it all again. I suspect I’m not the only one.

  40. Dave Kennedy says:

    Will, you are supporting the argument that the supply side will be addressed by by new land becoming available and developers having the ability to build more houses for those who can afford them:
    “Wealthy people buy them, and the rest of us cross our fingers and buy them second and third hand.”

    This is simplistic nonsense and ignores the following:

    The areas where the poor live have limited new building and there is no requirement for landlords to lift existing buildings to livable standards. The poor do not move into the 2nd or 3rd hand houses in Remuera or even Hobsonville.

    Any new building goes to those who have enough money and the new supply is only supporting wealthy migrants, New Zealanders with money returning from Australia and elsewhere and those with growing property portfolios.

    The average size of the housing being built here are the third largest in the world. These are not kind of houses that those on limited incomes will ever be able to afford. There are very few modest sized houses being built to meet the demand of less affluent families (around 4,500 are on Housing NZs priority lists and many have to wait up to 2 years to get a house).

    Greenfield developments need services and infrastructure and these are the responsibility of the Auckland City Council. There is no money available to provide these unless assets are sold to cover the cost. While this is possible, selling off the family jewels to make ends meet can only be done once and the city is likely to continue growing into the future.

    You have not provided any evidence that the Government’s approach will end up helping those in most desperate need and evidence of failure is everywhere:

    Not keeping up with the maintenance of state housing ($1.5 billion worth according to English) has limited supply and caused illness and death.

    Attempts to sell off state homes has been a dismal failure, there is no money to be made in social housing except through the accommodation supplement (costing us $2 billion a year). Surely it would be better for the rental income of those being supported to come back to the government to help maintain quality conditions than go to the pockets of slum landlords.

    Paying people $5,000 to leave Auckland will not be a solution unless there is housing elsewhere and jobs.

    Will, here is something I wrote almost 4 years ago on housing, I do have some knowledge and understanding of what I am talking about, you clearly don’t.

    http://localbodies-bsprout.blogspot.co.nz/2012/10/englishs-housing-solutions-lack-logic.html

    The Government has been sitting on a ticking housing time bomb for many years and have made few attempts to defuse it…it has now exploded in their face.

    http://www.salvationarmy.org.nz/research-media/social-policy-and-parliamentary-unit/general-election/the-unfolding-housing-crisis

    …and we still haven’t addressed the possibly 100,000 leaky buildings that came out of National’s previous attempt to loosen building regulations.

  41. Dave Kennedy says:

    The other crazy development in Auckland is that money deemed for education isn’t all being spent on the kids but providing houses so for teachers.
    http://www.stuff.co.nz/national/education/80493595/Schools-luring-teachers-to-Auckland-with-help-of-accommodation

  42. Will says:

    That’s not what supply side means Dave. It’s a completely different topic.

  43. Mr E says:

    “who else is going to make sure the 30,000 houses are built”

    Demand, without historical restrictions.

    Obviously TM.

    When buying a new house people want a say in how the house is designed. That can’t happen if the Govt designs and builds houses.

    The sad thing is patience will be needed. Freeing up of new land is just the start of process. Think of surveying, subdividing, sewage, drainage, electrical supply, roading, street lighting, foot paths, sales and purchases of land, building designs etc etc.

    Aside from ensuring land availability the best thing the Government can do is put pressure on the Council to ensure time restrictions are not put on consenting of any of these aspects.

    National are the right people to achieve this.

  44. Dave Kennedy says:

    “That’s not what supply side means Dave. It’s a completely different topic.”
    Supply side economics is related to reducing barriers to encourage supply, in the case of housing it would mean increased space for development and reducing regulatory controls and costs (what do you think it means?).

    The real supply shortage in Auckland is housing for low income earners and extending the Metropolitan Urban Limits and watering down the RMA will not address the urgent needs of the housing deprived in any immediate way.

    The Auckland City Council has found itself between a rock and a hard place. The Government has put restrictions on local body borrowing and so hasn’t got access to funds to support greenfield developments unless it sells off assets or increases rates. Meanwhile families living in 3rd world conditions are common in South Auckland (as reported overseas) and little is being down in the communities that need the greatest support:
    http://www.theguardian.com/world/2016/may/17/new-zealand-housing-crisis-forces-hundreds-to-live-in-garages-tents-and-cars

    Nimbyism is rife amongst the affluent who don’t want high rise apartments or social housing anywhere near their suburbs. National is more likely to support the views of the affluent than meet the needs of the deprived:

    “Economics and politics are closely intertwined. But politics trumps economics. Especially the politics of the privileged. There was a stark reminder of this last week. In an extraordinary meeting, a minority of rich home owners in Auckland scuppered enduring solutions to Auckland’s over-priced and dysfunctional housing market.”
    http://www.stuff.co.nz/business/opinion-analysis/77324773/Auckland-Councils-housing-backdown-dooms-city-to-years-of-slow-housing-growth

    Increasing density is the cheapest and more sensible option as there is no need to spend much more money on providing services and transport. It is cost effective to concentrate people near where they work. Nick Smith identified 500 hectares of Government owned land that social and low cost housing could be built on. It is beyond comprehension why the Government has spent so much time and money in the attempt to remove itself from the responsibility of social housing for the last 8 years when it could have been doing much more in increasing supply through its own building developments.

    “When buying a new house people want a say in how the house is designed. That can’t happen if the Govt designs and builds houses.”

    This just demonstrates your lack of comprehension, Mr E. For the thousands of families and individuals cramped into overcrowded homes, garages and cars, all they want is a sound well built house that is healthy and cheap to live in. Only the very affluent have the option of influencing the design of the home they will live in. You need to get out and experience the real world.

    “Demand, without historical restrictions.”

    The biggest demand is from those who have little financial influence. The historical restrictions to supply in their case started in 1991 when the then National Government pulled out of building the sort of houses that were uneconomic to most developers. The same reasons that Dick Seddon started building “houses for the workers” exist now. Once again the working poor are being exploited by slum landlords and their living conditions are much worse that what should be expected in a developed nation.

  45. Dave Kennedy says:

    oops “little is being done in the communities that need the greatest support”

  46. Paranormal says:

    You were so right Will. There is no point in engaging. Even when conclusive proof is provided that the left have it completely wrong – LOOK there’s a squirrel…

  47. Name Withheld says:

    You were so right Will. There is no point in engaging.

    Wise words indeed. He seems to have worked himself into quite a
    frenzy on this one.
    Best stand clear lest one is struck by a wayward squirrel.

  48. Dave Kennedy says:

    Paranormal and NW, I presented my argument with some enthusiasm and a good deal of evidence. I am reading through all your comments and am trying to work out what you personally support and your own evidence…and came up with very little other than your peculiar obsession with squirrels.

    Ele is one kind and tolerant lady😉

  49. Will says:

    It boils down to this. Houses are needed. People are willing to build and money is available but land is not and consents are slow, expensive and difficult to acquire. Thanks ACC.

    Your solution is to confiscate OUR property (money) to build a few houses for people who can’t afford them but might be persuaded to vote for you. It won’t solve anything except scratching that statist itch you are always trying to reach.

    We are advocating a simpler idea. Just…get out of the way. Free up the land, remove the RMA shackles, put to bed the taniwhas once and for all, and let people get on with it. The government can invest in the necessary infrastructure and collect rates from then on.

  50. Name Withheld says:

    Ele is one kind and tolerant lady

    ….Or is as bored with you as others are and in spite of that allows you to continue.

  51. Dave Kennedy says:

    “Your solution is to confiscate OUR property (money) to build a few houses for people who can’t afford them”.

    Will, My solution was to do the very thing that worked for almost 90 years, make sure that there is a supply of good houses for those who have no way of affording a house themselves and those who do need support. This compassionate response actually ensures that kids born into unfortunate circumstances can have a decent start in life. Those in need don’t generally choose their life circumstances, illness and human tragedy can effect us all and the damaged people that came out of a dysfunctional CYFs still should be supported.

    Up until 1991 it was recognised that a small percentage of the population needed either ongoing support or a brief helping hand and it worked. However, since 1991 there has been a reduction in the maintenance and construction of state houses to the extent that almost 50% of the existing ones are what Savage’s government built. We now have $2 billion of public money subsidising many slum landlords who have filled the gap created by the drop in supply. While they are happy to receive subsidised rent, they claim it is not economic for them to make their houses pass minimal standards and people’s health suffer because of it and people are dying (fact).
    http://www.nzcphm.org.nz/media/64535/2013_08_02_housing_policy_statment.pdf

    Poor people rarely end up living in rich people’s cast off houses because it is where the house is built that is important and there are few developments in the areas where poor people live. A large percentage of the houses that low income people are forced to live in are not fit for purpose and the private sector is not interested in addressing this.

    The Government has tried to fob off the responsibility of social housing to NGOs and the private sector but for obvious reasons there is no interest in taking this on. It has spent almost $30 million on this for no result. That 30 million would have fixed or built much needed houses (there is $1.5 billion worth of delayed maintenance according to English and Housing NZ has to pay them a dividend).

    Your belief that making sure that developers can meet the demands of the rich as the first priority sums up why we have this housing crisis. On top of this you have the audacity to suggest that public money should be spent to set up the servicing for these exclusive developments. Your simple idea is simple and you are a hypocrite of the highest order.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: