Experts suggest incentives to ensure a “genuinely transformative approach to housing”
Many Kiwis are struggling to buy or rent a home in New Zealand as house prices continue to skyrocket and housing supply struggles to keep up with demand. Now, national volunteer organisation Closing the Gap has put forward its ways to address the housing crisis.
Closing the Gap’s paper includes research and commentary about the housing crisis in New Zealand and how to help people in Aotearoa buy or rent a decent home.
Commentaries by Jacqueline Paul, Jenny McArthur, Jordan King, Max Harris, and Scott Figenshow in The Transformative Housing Policy for Aotearoa New Zealand paper (Public Policy Institute University of Auckland, October 06, 2020, page three) claim that the housing crisis is neither inevitable nor inescapable.
“Allowing the crisis to continue unabated will do lasting damage to health, inequality, levels of debt, and the hopes of a generation. To take action to prevent this from happening, we need to understand how we got here. We need to be clear about what kind of society we want to move towards and how housing fits into that vision,” the authors said in the paper.
The authors noted too, the alleged emphasis on the role of housing and land supply (supply side), which fails to adequately recognise the role of demand-side drivers, such as speculative investment, no taxation on capital gains, and permissive mortgage lending. They are calling for more focus on the need for policies providing disincentives to speculative investment.
They added that “the focus on housing supply ignores the strategic centrality of real estate and property to the country’s economy,” noting Reserve Bank of New Zealand’s (RBNZ) figures showing 59% of all loans made by the banking sector for mortgages and around 37% of the total value of mortgage lending for property investors rather than owner-occupiers.
Paul and the other authors suggested the following incentives to “ensure a genuinely transformative approach is taken to housing”:
- A ministry of public works to boost the sector’s capacity and oversee public-private partnerships that have emerged.
- A green investment bank alongside the ministry of works to form key parts of Aotearoa New Zealand’s Green New Deal – with the bank focusing on lending for state and affordable housing and small and medium enterprises (SMEs), particularly building relationships with community housing providers.
- A state lending agency to support the allocation of housing finance to low-income citizens in the interests of secure, affordable housing across a range of housing types. It should also include an equivalent institution administered by Māori.
- Transferring responsibility for regulating mortgage lending to Parliament.
- Enabling greater public sector leadership (increased diversity and imagination of thinking in public sector agencies) to produce and embed a new housing paradigm.
- Housing policy in the Tino Rangatiratanga sphere to help Māori exercise tino rangatiratanga over their lands and kāinga as required under the Te Tiriti o Waitangai.
- Fair taxation of housing.
- Expanding state and community housing.
- Enhancing renter rights.
- Tackling homelessness.
The authors emphasised that housing is essential to the health and well-being of Kiwis, shifting the paradigm to thinking about housing as being a form of well-being creation rather than a form of commodified intergenerational wealth creation.
Other commentators also thought a significant shift in how we think about housing was required to address the crisis. For example, ANZ’s report suggested developing a plan to efficiently house and provide infrastructure for the growing population and a productive economy to grow incomes.