Kiwibuild needs urgent rethink

Phil Twyford
Credit: Pixy

Matthew Hooton writes in a newspaper that Kiwibuild needs a serious rethink. quote:

Housing Minister Phil Twyford has announced that 211 KiwiBuild houses will be built in the ski resort of Wanaka. The first 10, we’re told, will be ready in just a few months, with the lucky owners moving in before Christmas.

It goes without saying this is completely insane. Everybody who is eligible should register to buy one when Twyford’s new Ministry of Housing and Urban Development (MHUD) opens the ballot on Monday.

To qualify, you — or whichever of your kids’ names you use — will need to be a first-home buyer or “second-chancer”. end quote.

Well, we’d all love to live in Wanaka, but the place is just so damned expensive these days. So… I could buy a Kiwibuild house there. Really? quote:

They can have an individual income of up to $120,000 or a combined income of $180,000 if in a relationship. They must vouch that Wanaka will be their primary place of residence for at least the first three ski seasons.

You may need to spot them a reasonably hefty deposit. With either two or three bedrooms, the houses, being bought off the plans by MHUD from a private developer, will be priced from $565,000 to $650,000. end quote.

After promising (without the foggiest idea of how we were going to do it) to build 10,000 houses a year, among the first batch, we have properties in a ski resort. There will be lots of low-income families living there, just dying to get on the property ladder. quote:

The good news is the banks will surely be generous given the location.

Small two-bedroom apartments in Wanaka go for $125 a night on Airbnb and much more during peak periods.

Even if you flick on your KiwiBuild house after three years, there’s little doubt you’ll make a cool 100 per cent profit on your initial deposit, thus the need for MHUD’s lottery system. end quote.

Exactly. This scheme was supposed to help people get on the housing ladder, not turn them into speculators. Even worse, the 5 year Bright Line Test will not apply, because these homes have to be ‘owner occupied’, so the owners will not be seen as investors. Even though many of them, effectively, will be. quote:

Twyford is promising more ambitious projects than his initial “buying off the plans” initiatives. He says as many as 1600 of the 4000 houses at his Pt Chevalier site will carry the KiwiBuild badge, but none will be available in the foreseeable future.

He claims 3500 may be built in Mangere over the next 10 to 15 years and maybe another 2400 in Mt Roskill over the same period.

But these numbers are unlikely to sum to the 100,000 KiwiBuild houses over 10 years Twyford insists he is committed to deliver. end quote.

I think we have already realised that if he has built (or bought) 3000 houses by the next election, he will be doing very well indeed. quote:

KiwiBuild is becoming a major problem for Labour strategists and not just because it is bound to fail to hit the 100,000 target.

Twyford’s version of KiwiBuild — with its high income limit, $100,000-plus deposits and lottery element — will soon be seen as grossly unfair.

Beyond mere perceptions, it will in fact worsen inequality, which Labour claims to care about. If Labour does secure a second term, it will then face humiliation in 2023 as the media returns to the likes of Wanaka to find out whatever happened to the old KiwiBuild homes. end quote.

Kiwibuild was always supposed to be for lower-income families. Most families with a household income of $180,000 a year already have the means to buy a house, so long as they can find the deposit. What these people will do is buy the Kiwibuild house at its reduced price, hang on to it for 3 years and then sell and make a capital gain and no, it won’t be taxed. The family home is exempt, remember?

So all Kiwibuild will do is create more ‘speculators’… exactly the kind of people that Labour derides. quote:

The Minister needs to forget about a few hundred houses here and there. He needs to lift his sights to imagine small cities being built from scratch to the south and north of Auckland, linked with Hamilton, Tauranga and Whangarei by ultra-fast rail.

KiwiBuild must be transformed from the sort of limited initiative Wellington bureaucrats are comfortable with into something China consistently implements without much trouble. end quote.

I watched the Hong Kong city of Sha Tin being built in a couple of years in the 1980s. It can be done, but we would need more construction workers… who will need to live somewhere… quote:

Best, then, that Twyford rethinks his failing policy and commits to getting on with doing KiwiBuild properly. Alternatively, of course, the coalition could just decide to cut immigration by 30,000 a year over the next decade. Then no one would need KiwiBuild at all. end quote.

None of this will happen. Twyford will bumble on as he has done for the past year but it is true that the housing shortage will come to an end soon. People are now looking over the ditch to Australia again. That will solve the problem.

 


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

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