PROPERTY INVESTING
JOHN ELLIOTT:
HOUSING CRISIS STILL UNSOLVED - SHARED EQUITY SOLUTION POSSIBLE This article is not about apportioning blame, but is an attempt to suggest a solution. It is a fact, despite National maintaining to the bitter end of their reign that no crisis existed, that a huge housing crisis does exist in New Zealand, with the worst example being Auckland. Young families who are tied to Auckland by their jobs are between a rock and a hard place. They can neither afford to buy a house, unless the bank of mum and dad can pay for most of it, but worse still they cannot afford to rent either. What are they expected to do - live under the harbour bridge with other homeless souls? Labour has been totally preoccupied with its response to Covid-19, and in my book has done well, but now they must address some of the inequalities that have become so much worse in the last 35 years since Roger Douglas and his neoliberal mates went mad for a time in New Zealand. In his latest book just out, ‘Too Much Money, How Wealth Disparities are Unbalancing Aotearoa New Zealand,’ Max Rashbrooke says right at the outset of his introduction: “In the last few decades, an apparently ordinary financial institution has assumed an importance that could hardly have been foreseen. It is the bank of mum and dad.” Rashbrooke calls this ‘insidious’ because it allows some young people a significant and completely unfair advantage over others. Shamubeel Eaqub calls it, “the return of the landed gentry". So what can, and will, a Labour Government do about this inequality? So far, not much, although the government has launched a shared home ownership scheme for families who can’t save a deposit. Through the scheme, Kainga Ora would take an equity share in a property to assist first home buyers
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who could service a mortgage, but need help raising a deposit. Housing Minister Megan Woods said, “A core belief of this government is that everyone deserves a warm, dry and secure home whether they own or rent.” Under the first home partner scheme, Kainga Ora would take an ownership share of the home it helped families buy. Over time new households would buy those shares back to become homeowners. The proposal has been welcomed, but it is still unclear who will build these houses, where, and what the shared equity might look like. Habitat for Humanity has pledged to build 40 homes under the scheme with the 13.8 million dollar zero-interest loan it would get from the government. So there is some action, but it’s slow and spasmodic. The price of land in Auckland is a huge impediment, but the National and Labour current proposal for three storey in-fill towers throughout central Auckland would be no help to first home buyers. Those new apartments are likely to be priced at nearer $2 million than one, both prices well out of reach of first home buyers. Labour has two years until the 2023 election to work on wellbeing, poverty, and inequality. It should get a further chance in 2023, but that might be it. Few New Zealand governments get more than three terms in government. National is the only party in 65 years to secure a fourth term, winning in 1960, 63, 66, 69 before losing to Labour in 1972. Just do it Labour - while you still retain power. (JOHN ELLIOTT) PN
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