A poster in Wellington encourages young people to vote. Excellent! But justifying why is the quote ‘I’m voting local for denser cities because it means safe healthy affordable homes for renters like me.’ But there is no connection from building denser to houses/rents being affordable.
Take just 30 seconds to reflect on some examples that involve density and affordablity.
New York densely populated but rents are only reasonable because of price controls. Private enterprise wants rents to go up significantly. Labour/Greens have no controls on rental values.
Any third world slum, huge density but low qualiity of life, infrastructure, privacy, but affordable for the poor. Quality is the normal private enterprise trade off for affordable. There are rules about quality standards in New Zealand but there no gaurantees that how those standards are used e.g studio apartments are usually sold as the affordable option. Would you want a family in one? But the Labour/Green policies don’t make any gaurantes housing and rents will be quality affordable for the customer needs, they just assume it from increasing supply.
China’s housing boom (command economy drove apartment building to keep the economy stimulated, but government doesn’t set the prices apartments sold). Estimates range between 50 million to 65 million empty high rise apartments as asking prices are hugely over the salaries of average chinese workers. China’s property market has been in a slump for ages but the prices asked for remain high. And if a company collapes, its easier and cheaper to sell it at one bargain basement sale than as multiple sales to different ordinary individual people. A single purchaser paying so little has no great pressure to sell as their costs are quite low. So no need to massively drop prices. So there we have massive density of supply, in a buy and sell market (a free market not a command market), but the prices are not affordable.
But this happens all the time everywhere. There is plenty supply of cars in a car yard, or carpets in turkish carpet shop, of mobile phones, iphones; but the prices are high. If you went to Ecuador and bought a banana there is huge supply all around you but they still charge you what they think you will or can pay. No matter what you haggle or the price you pay it bears no relationship to the massive volume of supply around you.
If you are a consumer, supply is not the primary driver of price; anywhere. However if you are a producer, say a farmer in New Zealand, supply is certainly used to try and push down the price you get. It’s the business people in the middle (e.g. supermarkets) who push down price for producers; but using every trick in the book to push prices up for consumers. It’s about what the consumer can be made to pay. It’s marketing and pricing practises that set the prices, not supply. Supermarkets are notorious in the past for dumping product rather than selling low.
Labour/Green affordable housing policy reflects at best ignorance of basic economics, or stupidty in the face of the Property Council or somebody saying 1 plus 1 = 4, or at worst they are liars. Their websites focus on increasing supply by permitting developers to bully build. In effect to leave price setting in the hands of those who must maxmise profit. We all know the trade off for affordability is quality and often that is size. (Yes fantastic they removed interest deductabilty but giving it back for ‘build to rent’ with no controls!) Of course they do mention the bits that allow first home buyers, Generation Zero, maybe having the ability to take on what would be a massive mortgage. Wow, thanks.
Labour/Greens centrists surely can’t be that ignorant that they don’t know basic economics? Or stupid enough not to see the hundreds of empty rentals in Wellington but still prices for rents remain stubbornly high and have not significantly come down.
Generation Zero is being lied to, that bully building will bring affordable rents and housing, and in their genuine desperation some are buying the lies. Shame on the Labour/Green centrist leadership liars? Let’s call them out for their, ignorance, or stupidity, or lies, – Megan Woods, Grant Robertson, David Shaw. Only government can contract to build affordable housing because they are not beholden to maximise profit.
p.s. This is not about the supposed left attacking Labour as bad actors, its about talking honestly and directly because centrists tend to listen to the other side and not their own. The truth is business is taking the affordable housing financial benefits and yet they mock Grant as directionless. Just like Grant’s first budget extra $50 for accomodation allowance. Predicatably, landlords just raised their prices by $50. They mock the centrists. And Grant did nothing. The Property Council all serious and respectful to centrists face’s with lots of data about fixing the housing shortage; sneering behind the centrists back at the basic lack of insight, knowledge and skills. Getting everything they want for, just a puff of breath promising supply, and of course (puff) affordable housing. National/Act laugh and mock them. These are the people who are not their friends.
Even young people aren ‘t ignorant or dumb enough to believe that poster. They lead quite busy sort of lives, at ground level, unlike Bowen street refugees watching life from balconies. The stupid ones are the PR people who consistently under estimate everybody else. Who’d want a government which abolishes the Commissioner for Children anyway ? Not me.
Talking honestly would be great but for some politicians it’s about winning elections so they say what the people want to hear with no intention of keeping the promises.
To be fair, the ad doesn’t mention affordable rents, only affordable homes. Rents, of course, may or may not be more affordable, depending on demand. Also, the ad doesn’t mention “houses”; it mentions “homes”. A home may well be an apartment in a three story block, or a two story house with a much smaller footprint on a section a lot less than a quarter acre. Where the underlying land is expensive these are likely to be more affordable than a single story bungalow on a quarter acre section.
The cost of of demolishing and redeveloping sites occupied by “stately homes in leafy areas” is likely to be quite be high since the price of the properties themselves will high have price tags, but there are still plenty of fairly ho-hum properties in suburban areas which could usefully be redeveloped. If these properties are close to town centres, or to good public transport routes, the underlying lands will have high values, and the existence of such properties would probably represent an inefficient use of thee sites that they occupy.
Reply to Mikesh Sept 17 at 10.44am. The poster does mention rents. He is a renter. He is equating homes being affordable to rents being affordable. Most of what you say is true but not relevant to my article at all. Your assessment of demolition is fine but subjective. It’s the local people who must have their rights maintained to say how any development impacts on them. Still this wasn’t my main point in the article.
Local people must also retain a right to sell, but if selling to a developer is the only option, what then?
Local people may have a right to be consulted, but society at large also has rights in respect of land. The land belongs ultimately to society, and anyone claiming private ownership of land needs to take that into account; and and recognize that that includes the the right to see land being put to its most efficient use. in the case of residential land this would be achieved through higher density housing.
If I had my way i would levy land taxes and offset them with reductions in rates of income tax. In other words I would transfer part of the tax burden from income to land. This would benefit people making more efficient use of land, perhaps by occupying one floor in a three story block of apartments erected on a single site.
China’s situation is very different from us- they are rapidly urbanizing. Cities that were previously called ‘ghost cities’ (because they’d been built a couple years in advance of urbanization, instead of slapped together after people were already living five to a one room apartment) like Ordos in Inner Mongolia now have larger populations than any city here outside Auckland.
Population increases and urban/rural migrations are far less pronounced here. If neoliberalism hadn’t destroyed everything then all that would need to be done would be to build slightly more social housing each year. And the government isn’t even doing that most of the time, when what’s actually needed is to catch up with everything deliberately destroyed by the Lange government and his successors on the left and right sides of the neoliberal party.
Reply to Mohammed Khan Sept 17 at 11.46am. Yes, you are right, but there are still ghost cities in China with estimates over 50 Million empty. Chinese people still have to buy their homes, and prices are simply not affordable. My point being – whether something is affordable is not determined by supply. The NZ governments whole focus is on increasing supply which is a red herring to whether something is affordable. They have to focus on affordable not supply.
” Labour/Greens centrists surely can’t be that ignorant that they don’t know basic economics? ”
I would include the author in that statement.
Neither car prices nor phones are really expensive – in fact these are incredibly competitive markets. Car prices in dollar terms haven’t changed in NZ in 25 years despite inflation. The auto industry operates on razor thin margins and consumers get better and better cars for less and less money over time. As for mobile phones, you gave the game away by referring to iPhones: It’s a premium brand that offers enormous value and is a technological miracle in a small box. If you want a basic mobile phone, you can buy one for 50 bucks.
Now consider what the cost of a car would be if local government had to undertake individual design reviews of every Toyota that entered the country, as they do with houses and then prescribe the paint specification…
Reply to Andrew at Sept 17th at 11.54am.
Funny, I don’t disagree with your analysis of the tough margins etc. My point is that there is plenty of supply.e.g there are approximately 3.5 million car licences holders in NZ and approx 4.4 million registered cars. ergo – Supply is not what is determining price.
So everything you say here is; irrelevant. I think you should read a little more carefully
The world is in decline.
I do a lot of reading and believe that the rot has set in and is unstoppable without a major crisis. By that I mean a major collapse of the financial system (much bigger than 2008) or a combined major food and energy crisis or even a world war.
The financial and political systems we have now across the world (authoritarian or democracy) are not fit for purpose. They are built on a house of cards and the die was cast in the 70’s and finessed every year since. We are living in the final days of a fantasy. The myth of continual growth and the shady economic and financial systems underpinning it. Climate change is going to be very rapid now and will likely finish it off.
Without leadership, people have become selfish and inward looking and many have been taught to focus on making money especially through short term schemes where advantage can be gained through loopholes to make ‘additional’ money with little effort.
Until the world starts to care about the collective and the long term, the rest is all window dressing. We should care about the lousy education our kids are receiving but we don’t, about housing densification in character areas but we don’t, in closing loopholes so the middle can get rich easily but we don’t. And I am beginning to think, no amount of voting or pressure for change is going to make a difference.
People aren’t listening, they have brought into the current paradigm without questioning and 99% of them will not question it until things start hurting for them personally. Not just -‘ its uncomfortable watching others fall apart’ but the “We are personally up sh*t’s creek” level moment.
Reply to Fantail Sept 17 at 2.52pm. Ha ha. Not. My article is about recognising the cause of a problem. The government is focused on supply to fix affordable housing. They have identified the wrong problem. The problem is pricing. That problem can be fixed and will deliver affordable housing. The end is not nigh.
This is a government that is happy to pay $1800 a week to rent a motel room where they could have rented a house for half that or they could have purchased a heap of mobile homes and rented those out like National did in the Chch earthquake .This crew have no idea about saving money except when it comes to fulfilling promise to the nurses .
Reply to Trevor Sept 17 at 2.58pm. No this government does care about paying $1,800 a week. But what do you do when private enterprise has not built enough affordable housing? It’s the fault of all those people who have voted National over 30 or 40 years. Labour is guilty of trying to use private enterprise to fix the problem.
Good on ya Stephen. It’s bloody depressing is all I can say right now. Lotto tonight
Less talk and more doey.
So far. There hasn’t been a government that has followed through with their rhetoric.
So what are we going to do in the next election?
Demand referendum and a NZ Republic governed by referendum?
We need to do something different instead of the same ole bs over and over again and again.
NZ political parties don’t have policies that will help the country to run better for citizens, it has slogans.
My slogan – an end to zero-goal policies by 2023. In place will be measurable, appreciable improvements, aiming at 33 to 50% better in the first two years, with a 5% drop in the CEOs salary and 5% drop in numbers of communication employees and consultants.
Let’s do this?
My nuclear free moment?
Team of 5 million?
Build thousands of houses?
End child poverty?
Grow a billion trees?
Get people out of sleeping in cars?
Most transparent Government ever?(oops He Pua Pua,3 waters, the new democracy etc,etc.)