OPINION: “Buying a second house and renting it out, is a bit like dismantling a tree twig by twig, to build yourself a giant nest.”
This line, from James Brown, is part of a collection of New Zealand poems called More than a Roof, and it sums up some of the political sentiment from last week.
A social issue is not getting solved in a hurry when the art and literature being produced around it continues to get better, while the headlines just get worse.
Brown says he was inspired to write the poem after trying to get a landlord to patch up a series of holes on the exterior of a house, and his landlord apparently replied: “But you don’t live on the outside.”
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If Brown’s poem doesn’t take your fancy, you could try any number of other works. Indeed, you need not even limit yourself to New Zealand-made film and literature.
A 2018 movie from Ireland, Rosie, shows the downward spiral a person’s life can take when they aren’t able to find stable housing. Part of the movie was filmed in an emergency accommodation motel, something which is now part of our own housing landscape. While the crew were filming a scene at reception, they saw real-life Irish families file through, bags packed, ready to move to another hotel for the night.
Last week Stuff had a look at National leader Christopher Luxon’s property portfolio, the most extensive of an MP in the current Parliament. Over the past year, his portfolio has accrued capital gains in excess of his salary while he was chief executive of Air New Zealand.
His defenders say all of this was just the politics of envy at work; after all, it is not like Luxon gave himself those property gains.
However, it would also be misleading to see the accrual of these gains as a sign of financial genius.
Policy decisions from governments of both stripes have likely done more to fatten Luxon’s property portfolio than he did, including policies in place this year when his property portfolio jumped $4.3 million in value.
Back when John Key came to power, house prices were sitting at nearly six times income. Today they are at nearly eight times – the highest imbalance in 18 years.
These levels of unaffordability have been seen the world over. The prescription for solving them is well traversed, but rarely followed.
Internationally, cities are driving economic growth, but there is a shortage of land. Those that are able to provide more land through either “upzoning” existing land – allowing more dense developments – or providing more land on the outskirts tend to do better in the affordability stakes than others.
A McKinsey report from as far back as 2014 identifies “unlocking” land supply as “the most critical step in providing affordable housing”, but the problem is location. Expand out too far and the extra housing will have little impact on the supply, or affordability, because the commuting takes too long.
Around the world, various political movements, some led by a growing cohort of Millennial or Zoomer renters (termed Yimbys for “Yes In My Backyard”), are trying to dismantle legacy policies which prevent the construction of new dwellings in the right locations.
A lot of these onerous rules have their origins in attempts to make communities unaffordable, or lock out particular groups from being able to move in next door.
The Treasury is predicting a sharp slowdown in house price growth, but the only people who appear to be thriving at the moment are those already on the property ladder.
In the United States, single-house rules first came into place in Berkeley, California, where developer Duncan McDuffie saw them as a way to make housing so unaffordable that African-Americans would not be able to live anywhere near his developments. He lobbied for local rules to make it illegal for anyone to build an apartment block, or anything with more than one house on a section.
McDuffie had a history of housing discrimination: his developments routinely carried property covenants preventing people from on-selling his houses to African-Americans. The new zoning rules effectively locked African-Americans out from living on pieces of land he didn’t own too.
It is against this context that Labour and National have been trying to change some of these rules around densification, coming to an agreement to speed up and expand the national policy statement on urban development.
Both Labour and National likely once saw an opportunity to carve off new voters for themselves, since many within these Yimby-affiliated groups seem to have no clear party political alignment.
However, this consensus is fast fraying. Stuff reported National was seeking to pare back some of the bill’s changes, while Newsroom reported both Labour and National were trying to outdo each other on how much they could water down the bill.
Meanwhile, in a Newshub interview, Luxon said he wanted house prices to stabilise, but not fall dramatically.
All of this sounds less a case of aspiration, and more like a group of people jealously guarding their well-lobbied-for capital gains.
It was a vote-winner when most voters comfortably owned their own homes, but will it be as successful with the growing number of voters who do not?
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