Hard News by Russell Brown

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Hard News: Housing, hope and ideology

178 Responses

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  • Lucy Telfar Barnard, in reply to BenWilson,

    I don’t think our problem is that we don’t have enough houses at all.

    Alas, lack of houses is actually a problem. That’s part of the reason that the housing we do have costs way too much. It’s also the reason there’s household crowding, which comes not just from big families living in small dwellings, but average-sized families doubling up in dwellings together, and why people “couch-surf”, and why households are stressed by having to share a dwelling with another household when they don’t want to (even if they’re not overcrowded). The reason they do that is not because they want to, and not simply because they can’t afford to rent something separate: there are not enough separate dwellings* in the country to house all the households that would like to, and should be able to, live separately.

    *I don’t mean physically separate, I mean notionally separate, i.e. an apartment counts as a separate dwelling.

    Even if we only look at severe housing need, an estimated 34,000 people are inadequately housed. They won’t become adequately housed just by shuffling people round in the existing housing stock.

    Adding houses might help matters a bit, indirectly (or it might not, as people will just move to fill those houses)

    Adding houses would help matters directly. Yes, people will move to fill those houses. That’s why they’d be built. People being able to move to fill new houses (or the other houses left empty by people moving into the new ones) could meet the unmet housing need if there were enough new houses built. At that point we could judge whether there was a price issue, but at the moment it’s not just price, it’s also lack of supply (or possibly price because of lack of supply).

    Wellington • Since Nov 2006 • 580 posts Report Reply

  • Richard Grevers, in reply to Lucy Telfar Barnard,

    (coming to this thread late, as usual :-)
    I think it's not so much lack of houses as lack of houses in the right place (where the jobs are). Or, perhaps more tellingly - lack of jobs where the houses are. I have joked that my solution to the Auckland housing problem is: 10,000 in Invercargill, 1000 in Gore... etc. etc. - and while moving more people to the provinces would create more jobs there, not enough unless you can also move industry (remember that?) there.

    New Plymouth • Since Jul 2011 • 143 posts Report Reply

  • Richard Grevers,

    The shoe thing: Do they apply geographical correction to the data? Without it, it’s useless: Living in Christchurch, it was very rare to see people barefoot about 10 months of the year – it’s either too bloody cold underfoot or tar-melting hot. Here in the balmy ’naki I see barefoot kids going to decile 10 schools – in winter. Yes, those kids will own shoes, but if they aren’t wearing them constantly they won’t wear out.

    ...and at NPGHS it seems to be a badge of honour that you don't wear a raincoat, just walk to school in the wet in your woolly jersey. The classrooms must smell interesting on a wet day.

    New Plymouth • Since Jul 2011 • 143 posts Report Reply

  • Richard Grevers,

    While searching for loopholes in the building laws, I came across a published submission to the Tasman District Council from people at the Tui community. It proposed a category of owner-built houses:
    - Rural or semi-rural areas
    - One meeting with Council to establish nature of house and which set of practises you will be following, with no further inspections - and fee reflective of that.
    - Owner-build consent would waive Council of all responsibility re performance and safety of the house. Status would be recorded on LIM
    - As you wouldn't be able to get insurance, a moptgage would probably be out of the question.
    I doubt if it got anywhere, but the ability to build your own house for $30 - 50K would be appealing.

    New Plymouth • Since Jul 2011 • 143 posts Report Reply

  • Ross Mason,

    Auckland is going to be too big. Even if the urban boundaries are expanded it will still mean no public transport plan and more cars. It is so bloody central as well. One day we are going to realise decentralisation has advantages.

    it is crazy having a 400m isthmus splitting the place into north and south. There are no options of where one can spread out.

    I seriously think that other "mega cities" need to be created in other parts of the country. Even on the south of the Bombays would be useful.

    Power is south, space is south, food is south.......

    Upper Hutt • Since Jun 2007 • 1588 posts Report Reply

  • Kumara Republic, in reply to Ross Mason,

    I seriously think that other "mega cities" need to be created in other parts of the country. Even on the south of the Bombays would be useful.

    NZ might be able to handle maybe 3 of these "mega-cities" - Auckland, Wellington, and Christchurch. It'd be even more feasible if the aerospace industry can develop planes that can carry ATR/B737/A320 passenger volumes over B747/A380 distances.

    The southernmost capital … • Since Nov 2006 • 5416 posts Report Reply

  • artemisia, in reply to Lucy Telfar Barnard,

    Where do you get the info that there are just not enough properties available? I had a look on TradeMe this morning and there are over 450 rentals listed in Manukau City and about 350 in Waitakere City with 2 or more bedrooms.

    That might not be enough to completely solve overcrowding in those areas, but it would probably make a big dent in it. So why aren't these overcrowded folk conditions moving in to these places?

    I accept that new housing has not kept pace with population growth, but not that all people in overcrowded conditions are there solely because there are no properties available.

    New Zealand • Since Nov 2014 • 8 posts Report Reply

  • Kumara Republic, in reply to artemisia,

    That might not be enough to completely solve overcrowding in those areas, but it would probably make a big dent in it. So why aren’t these overcrowded folk conditions moving in to these places?

    Could it be because the rent for those places is out of their financial reach?

    The southernmost capital … • Since Nov 2006 • 5416 posts Report Reply

  • artemisia, in reply to Kumara Republic,

    Certainly could be the case, but I was replying to the post that said household crowding is caused by lack of supply, pointing out there seem to be a lot of vacant properties about.

    Could also be that some families are not going to be top of the landlord's list of applicants.

    New Zealand • Since Nov 2014 • 8 posts Report Reply

  • Sacha, in reply to artemisia,

    There's also this thing where at any one time people are moving between homes, so a snapshot shows some empty ones. Official figures show without any doubt there is more demand than supply.

    Ak • Since May 2008 • 19683 posts Report Reply

  • artemisia, in reply to Sacha,

    Even if only half the places advertised are actually vacant (unlikely, but just say), good tenants will eventually find a place of their own to live since thousands of properties are available across Auckland and of course thousands more elsewhere in NZ. And there is significant taxpayer top up for rent.

    Some overcrowded family situations will be just temporary while they apply for their own rentals. In which case, that is not a permanent problem for them.

    Longer term overcrowding probably has causes other than supply. Let's face it, some would be tenants will find it hard to rent regardless of supply.

    New Zealand • Since Nov 2014 • 8 posts Report Reply

  • Sacha, in reply to artemisia,

    Why do you want to believe this isn't a real problem?

    Ak • Since May 2008 • 19683 posts Report Reply

  • artemisia, in reply to Sacha,

    Which 'real problem' are you referring to?

    New Zealand • Since Nov 2014 • 8 posts Report Reply

  • Sacha, in reply to artemisia,

    Housing shortage. When someone argues despite evidence, they usually have some reason.

    Ak • Since May 2008 • 19683 posts Report Reply

  • artemisia,

    Actually I was commenting on the proposition that overcrowding was caused by shortage of supply, and pointing out that there are thousands of properties available to rent in Auckland and NZ overall. So that maybe there are other factors to be considered.

    If that's the case, then increasing supply may well be a good thing - probably hard to argue it is not at least in Auckland and Christchurch - but may not solve the overcrowding problem.

    New Zealand • Since Nov 2014 • 8 posts Report Reply

  • BenWilson, in reply to Sacha,

    Official figures show without any doubt there is more demand than supply.

    OK, but demand is a function of how much money you have for something you want, not just of how many people want or need those things. So saying "supply does not meet demand" absolutely does not mean that there are not enough of the things to go around. It means people haven't got enough money to pay for the things that there are to go around. Which means a great deal of the supply is completely idle.

    Which is what I'm saying is the case for our housing stock. It isn't the case that there aren't enough houses for people to live in, it's that they're not allowed to live in the ones we have because they can't afford to pay the price.

    Yes, typically, if you increase supply, then demand can reduce in conditions that have many caveats. And the caveats around it in the case of housing are sufficient to cast a lot of doubt on whether anything short of an enormous building drive would actually bring prices down so that those at the bottom of the heap would be positively affected as a whole.

    Just as an example of what I mean about idle housing, consider how many idle holiday homes there are in this country. 95% of the time they're completely empty. There are tens of thousands of these perfectly acceptable dwellings all around the country. But the owners are well off enough that they don't want to rent them out at anything less than a fortune. It's pretty much not on the table. But that doesn't somehow magically mean they're not houses or not idle.

    Then there's the even greater number of idle rooms in existing houses. I have an office in my house. I don't absolutely require an office, and a person could live in it. But I keep it for me, for my office, because it's mine and I'm allowed to, and I want an office. I could easily house a student in it. But I don't want to. Gut feeling is that the number of such places is in the low 6 figures range (but I don't have any data, just guessing off the number of idle rooms I see in people's houses).

    Let’s face it, some would be tenants will find it hard to rent regardless of supply.

    Well certainly if increasing supply does not drive prices down, and their income is not increased, then that is the case. It is not at all clear that anything short of an enormous house building project would drive down prices, because there are so many other factors at work. Houses are mostly made privately, for a start, so a government drive to build houses could just eat into the numbers being built privately. Also, considering that there are almost no restrictions on foreign ownership, the demand has to be taken not just as NZ residents, but the entire population of the world who could buy a house in NZ. The number of people who have enough money to buy a house in NZ if it seemed like a good price is many, many times our population. We can't do a damned thing to make a dent in those actual numbers. Only legislation to control foreign purchases could impact on that side of the demand equation.

    And by an enormous housing drive I mean building tens of thousands of houses. Which would cost billions, possibly tens of billions. Building one thousand houses in NZ would add 0.1% to our housing stock. You wouldn't be able to distinguish the effect on prices from random noise, and it would be drowned out by 10 days worth of inflation.

    Auckland • Since Nov 2006 • 10633 posts Report Reply

  • BenWilson,

    None of my previous comment should be taken as evidence that I think the government should not build a lot more houses, though, or that we don't have a severe problem. But it's a really complicated problem and simple solutions just aren't good enough. I think we should build a lot more housing and a lot higher density too, even though I don't think that will bring prices down or help poor people. I actually think Key's idea that giving poor people more money is correct. But I'd be giving them way, way more than him. And I'd be investing in housing anyway not instead.

    Auckland • Since Nov 2006 • 10633 posts Report Reply

  • Sacha, in reply to artemisia,

    pointing out that there are thousands of properties available to rent in Auckland and NZ overall

    which contradicts official statistics. got any alternative link to evidence?

    Ak • Since May 2008 • 19683 posts Report Reply

  • Sacha, in reply to BenWilson,

    It isn't the case that there aren't enough houses for people to live in

    evidence, or stop making shit up.

    Ak • Since May 2008 • 19683 posts Report Reply

  • artemisia, in reply to Sacha,

    Have you looked on TradeMe. I did. Today.

    http://www.trademe.co.nz/property/residential-property-to-rent

    And of course by no means all rentals are advertised on TradeMe.

    New Zealand • Since Nov 2014 • 8 posts Report Reply

  • Sacha,

    No more interest in discussing like this than I am in climate change deniers or flat earthers. Enjoy your day.

    Ak • Since May 2008 • 19683 posts Report Reply

  • artemisia, in reply to Sacha,

    Don't be like that! It just looks like you run away in the face of some actual real world info. I'm sure you are not like that really. (Serious, not being sarcastic.)

    New Zealand • Since Nov 2014 • 8 posts Report Reply

  • BenWilson, in reply to Sacha,

    evidence, or stop making shit up.

    You might have to be a bit more specific about what evidence you're after. Which would mean engaging in the discussion more than that.

    Serious, not being sarcastic.

    I think you're being serious too. I haven't heard you say that you think house supply shouldn't be increased, you're just saying that the lack of supply isn't the sole cause of people being inadequately housed. There's much more to it than that.

    Auckland • Since Nov 2006 • 10633 posts Report Reply

  • BenWilson,

    OK, so a little bit of data to bolster my point. From the 2013 Census, there are 141,366 unoccupied dwellings. That's not unoccupied because the residents were away at the time, or unoccupied because under construction, both of which are separate categories. They are unoccupied because nobody lives there most of the time. This covers holiday homes.

    Auckland • Since Nov 2006 • 10633 posts Report Reply

  • Steve Barnes, in reply to BenWilson,

    They are unoccupied because nobody lives there most of the time. This covers holiday homes

    Right. So here is the anwer then, more holidays. :-)

    Peria • Since Dec 2006 • 5521 posts Report Reply

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