Stephen Franks on Housing

Stephen Franks is a thinker, he can be dry sometimes but he does think things through. He was recently on Radio Live with Marcus Lush talking about the Green Taliban and their plan to stop foreigners buying houses.

As sometimes happens in a genuine conversation, I realised that the issues could be summed up simply. Prices go up when supply can’t increase to respond to demand. There is no a shortage of building supplies, or builders. So foreign buyers’ money can only affect prices if there is a shortage of land to build on. But New Zealand is not short of land.¬†It is short of consents to use land. And probably more important than the supply of new land, is the cost, delay and risk in trying to intensify the use of land that is already built on, nearer the centre of our cities.

In other words, our housing problem is the inevitable consequence of the political success¬†of selfish middle and upper class families,¬†working with ¬†their stupid green children. They enforce their aesthetic preferences for the status quo (labelled as ‘heritage’) by¬†locking¬†newcomers out of¬†their leafy and quaint inner suburbs. The RMA has frozen the dynamic processes of rebuilding and intensification that have created all great cities (and our own towns and cities up till 3 decades ago. The result is that poorer people must pay for more expensive housing ever further from where the work is.¬†

To blame the resulting prices on foreign money is a nice distraction from their own culpability, for the selfish generations, and the councillors and MPs who pander to them.

It is 7 years since I was an ACT member, but I have to commend the Freedom to Build solution offered by John Banks and ACT in this area. It is the most plain, simple speaking any politician is offering.

As is usual with Stephen he has been a little blunt about the gutlessness of politicians:

Still, if central government can’t summon the political courage to solve that problem, then restrictions on foreign money might mitigate the problem¬†temporarily. If so, any restrictions on investment should be confined to:

a) Auckland

b) Existing houses (so that new money can go into increasing supply

c) Houses kept empty (because a house occupied is part of supply, whoever owns it).

  • le sphincter

    Oh please….. shortage of consents to use land…. does this guy ever get out of his air conditioned car and walk around a new subdivision.

    There he will see stages 2 to 5, all consented but not released for sale.

    Developers wouldnt want an oversupply would they.

    As for the possible land for the change in use from rural to urban, thats allready owned by the developers, and they sure as hell aint selling yet, unless the bank is demanding it.

    His economics never went past high school level. Thats why he doesnt have a real world answer for things like this, or even why Steinlager is cheaper in the UK than here, or Air NZ charges more for the same flight in NZ than it does if you buy it in the UK.

    • Sym Gardiner

      All those stages are in areas people don’t want to live. Remember… the three L’s… location, location, location.
      Stephen is bang on the money… the trendy liberal hypocrites don’t want the masses in their backyard but aren’t prepared to pay for the privilege.

      • le sphincter

        Oh delusional one. Despite more law schools, so that Hawkes Bay polytechnic is about the only region without one, are lawyers any cheaper ?

        yet i go to the dentist , who has eye watering expensive equipment, along with more support staff, for a fraction of the cost of a lawyer who only needs a spare bedroom, laptop and smartphone.

        • Sym Gardiner

          You exaggerate too much. The effect is lost.
          And you obviously haven’t gone to a dentist on The Terrace if you think they are cheaper than a lawyer.

  • RightOfGenghis

    Franks might be a ‘thinker’ but he hasn’t thought this through.

    If the council started issuing consents as fast as the greens would print money, how long does he think the infrastructure would last if infill housing starts to ramp up?
    As someone who has watched his daughter trudge through open home after open home while being jostled by hordes of surly chinese, only to lose them at auction I have some sympathy for the greens on this one. Taking the foreign buyer out would take the heat out of the market and cost the taxpayer nothing
    Franks sits in his penthouse suite in Wellington oblivious to this dynamic.

  • peterwn

    RightOfGenghis – per-dwelling infrastructure costs would be much cheaper for infill as the basic infrastructure is already there and does not need to be replaced wire by wire or pipe by pipe. It is probably only necessary to install extra infrastructure in say 25% of the streets to feed into what is already there. For example a ‘four inch’ watermain is sized for firefighting rather than to meet anticipated normal demand, so has capacity for infill if the network is reinforced at a higher level.

    • le sphincter

      Sorry the infrastructure is 60 years old in these areas, and a lot of combined sewage and stormwater, cost to update $300 mill plus.

      As for powerlines, without extra transformers infill will give regular blackouts, plus more HV lines both from down country and around the suburbs,. cost about $ 1 bill and counting.

      The only thing they dont need are extra side streets, but motorway on and off ramps hopelessly conjested, hence the higher capacity train lines required, another $ 2 bill.

  • blazer

    non residents,mainly chinese are pushing prices up.Allowing them to buy only new stock as they do in aussie would help.Low interest rates and 1 trick pony banks with 95% lvr ‘s fuel things as well.Stamp duty on investment properties,and tax incentives for first home buyers would help too.

  • Patrick

    When will a proper analysis of the effects of Green led policies be done – for instance the root causes of the 100 or so people killed in the bushfires in Victoria, similar in WA. These communists are a blight on society & need to be exposed for what exactly they are.

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