Posts by BenWilson
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Hard News: Housing, hope and ideology, 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.
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I don't think our problem is that we don't have enough houses at all. Adding houses might help matters a bit, indirectly (or it might not, as people will just move to fill those houses), but the problem is that the housing that we do have costs way too much. It's by far the largest chunk of economic activity in this country - either paying interest on your mortgage or rent to your landlord. The biggest chunk of most people's incomes by far goes into this. In my case it's more than half of everything we earn. And it's having not enough money to pay, or nothing left after paying, that makes people impoverished. It's not that people don't have a house, it's that they don't have enough money to make that house a good place to live after scraping together enough money to live in it at all. At the extreme end, just before actual homelessness, is the inability to heat the house, do any maintenance or repairs, to furnish it properly, to keep clothes and bedding clean, to keep fresh air circulating, to pay for good food to eat whilst in it.
Survival manuals give the prioritization clearly: Shelter, then water, then food. All other concerns are rather secondary. And that really is the order in which human existence is prioritized. The only one we've really got right from a social equity point of view is water, and even then only because it's a superabundant natural resource, literally falls from the sky. Humans can be held to ransom over decent shelter. They always have, and unless we actually choose to change that, they always will. That is the reason that housing is such a massive concern and such a source of wealth, and such a massive indicator of social position. Because it's absolutely vital. You can turn humans into animals by denying it to them.
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Is the planned tree removal only those 6 trees directly opposite MOTAT, though? Even with the widening it's difficult to see why any but the corner tree needs any attention at all. It's base is still about 30m back from the corner so it's only like one branch that needs anything done to it.
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Busytown: Beware of the Leopard, in reply to Sacha,
Oh OK so it's only those 6 trees then? And presumably keeping them would mean they were then up against the curb rather than on the other side of the footpath? As they are along long stretches of Tamaki Drive.
Not sure I have an opinion any more, other than that the process of public engagement seems awful.
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Busytown: Beware of the Leopard, in reply to Russell Brown,
Treehuggers should consider the branch-removal options, I think.
Well that's hardly a big ask, since they prune the trees all the time anyway. They're only that shape at all because they were pruned into it. Otherwise there would be pohutukawa branches sticking out onto Gt North Rd right now. Most likely, pruning them would make them bigger.
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Wow, we're talking about the trees whose bases are right beside the footpath? What possible reason is there to take them down? Surely the motorway isn't going to be widened right up to the footpath beside Gt North Rd? (and even if it was, there would still be separation, presumably full of flora like everywhere else in the country). I can understand taking out the treeline on the other side of the car park. The ones along the cliffline that could actually be hindering the motorway development, and are not particularly significant in any case. But that particularly beautiful boulevard beside Western Springs, a place where large numbers of people go walking every day, and especially large numbers whenever there is an event on at the multiple sites right there? Eh? Only a Vogon would destroy that.
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Hard News: Housing, hope and ideology, in reply to AndrewH,
We’re just largely stuck in a pavlova paradise construction model of individual houses.
We are. I'm not intending my statements to span all time. Just the rest of my life.
Yes, land price is a factor but certainly not the single biggest.
It's the only way you can explain that two identical houses situated one in Grey Lynn and one in the backblocks of a small remote South Island town could have a price difference of a million dollars. It's not the building of a modest house that accounts for the vast bulk of the difference.
We can actually build physical houses extremely cheaply, and that's without even really applying the economies of scale in mass production, which should make them cheaper still. But if they're situated in Erewhon, people won't want to live there. If you make Erewhon nicer, then people will want to live there, but their very desire to do so will make the land under those houses much more valuable. Very rapidly, the value of the housing stock itself will only be a small part of the picture.
Multitenancy increase the usage of the land, and if it's multilevel it's even equivalent to making more land. But in doing so, the value of the land under it is simply multiplied again. The value of land that can be developed into high rise factors this possibility in.
Essentially, what I'm saying is that when market forces dictate house prices, and those forces are basically unconstrained, and the market is the entire world, then there ain't no amount of technology improvement that's going to make house prices come down by large fractions. Even if the house itself was entirely free to build, the property could still be worth millions. In fact, it could be worth even more because of that, because it could be developed more.
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Cheaper construction is useful, but the main cause of skyrocketing prices is the land underneath the houses. That's the thing that's actually changed for the worse - construction itself has only become better.
The causes of land price inflation are many and various. Basically they go to our entire way of life, how we're organized economically, what we prioritize, what we allow and don't allow, and also what the general world economy is like too. We're barely in control of it at all.
So a conversation about social housing can only be avoid being totally fruitless if it becomes highly specific. There's no way that any government is going to be able to engineer circumstances in which the general price of property is brought down by any fraction that could make a difference to actual poor people trying to get onto a property ladder.
So really, the conversation about housing people in NZ has to be a bit more targeted, so that incremental progress of any kind could be made, or it needs to be widened because this room doesn't just have one elephant in it. Solving unaffordable housing is a macroeconomic issue, and only macroeconomic solutions could possibly work. But such solutions get no look at government in this country, apart from the one solution we already have, which is to let capital decide. That's the only form of economic organization the bulk of the country has the stomach for. They'd sooner slide one by one into poverty than suffer any kind of radical reorganization.
Which leaves us with managing that slide, softening it for the poorest, while we can still afford to, and still have any will to. It's visionless, but that's the way our country has been for a long time.
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I often drive barefoot in the summer when I'm walking in jandals. It's ok for short distances.
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Hard News: Housing, hope and ideology, in reply to Jim Cathcart,
The idea that the government cannot build enough housing for everyone is garbage. Of course they can.
It's probably worth defining what we mean by "housing for everyone". Because it's pretty wide. It certainly is possible to house everyone right now just by putting more than one person per bedroom. Also, the cost of all that housing could be way less if we opted to build it all in the middle of nowhere, and if it was very high density at that. But that's probably not what people mean.
Didn’t Labour have their decade-long building programme fully costed as part of their detailed election policy?
Presumably their plan contains such definitions?
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