Big wins in housing will come from regulation, not budgets

Jan 1, 1970 | News

More new spending was limited by fiscal restraint. The big wins in reality will come from regulatory change, and that should be the priority for this government.

The crisis in housing has been building for four decades. It took us a long time to get here, we should not expect solutions to be immediate. But for the lost generations, generation rent, the big change the government needs to make is on rental policy. It does not need a budget to make that change.

To really supercharge state house building, the government needs to inject capital over many years. But that is not politically feasible.

This restraint is visible across the budget, including in its housing portfolio.

Realistically, transformative change is not going to come from more spending, rather from changes in regulatory and economic settings.

Some of those are happening and dont have much to do with the budget per se.

The government has already extended the brightline test from 2 to 5 years. New Zealand’s clumsy capital gains tax surrogate. It will not do much, as capital gains taxes do not stop housing bubbles.

Ring-fencing of rental property income will make a change. Many investment properties bought in recent years do not get enough rent to cover outgoings. It mattered less when the losses could be offset against other income and house prices were rising rapidly. The tax system gave a discount for speculating on housing. But that won’t be possible now and people will have to chase capital gains with their after tax income like all non-housing investments.

Not strictly within the budget, but initiatives to allow local authorities to collect regional fuel taxes mean that the central government doesn’t have to stump up new capital for much needed infrastructure projects in many parts of New Zealand, including Auckland, Tauranga and Queenstown.

KiwiBuild remains the Government’s big housing policy. That has already been funded and is not a new budget initiative. There is still no clarity on the exactly how KiwiBuild will unfold over coming years and how the resourcing will be done.

Come election time, KiwiBuild will be the most intensely scrutinised promise.

A surprising omission seems to be funding for an Urban Development Authority, something that will be necessary to really fast track developments.

The budget committed to increase state houses. Increased plans for 6,400 state houses over four years is dwarfed by the current waitlist of nearly 8,000 households.

The neglect in social housing is longstanding. The stock of state houses peaked in 1991 and has stagnated since then. Relative to population, state housing stock is now at the lowest level since the 1940s. Those on the waitlist now have very complex needs and it doesn’t look like things will change any time soon.

The planned additional housing will come from some government funding, some borrowing and internal funds. This makes sense. Housing New Zealand has a large asset base, steady income on rents from the government but borrows very little money.

The new coalition government promised to do lots of things and also run surpluses, not tax more and not borrow more. The Budget needed to scuttle claims of economic and fiscal mismanagement. It does that by being restrained in delivering its election and coalition promises. There will be surpluses and net debt will be below 20 per cent of GDP as the self imposed Budget Responsibility Rules committed.

The budget did not bust out anything surprising.

Three years after the publication of Generation Rent it is disheartening to know that the crisis has worsened. But it is heartening to see ambition and willingness to improve in the future. The manifesto we presented, of well worn solutions, are largely being adopted in one form or another.

Read this story on Scoop here.

Recent articles

Community Housing Aotearoa (CHA) Newsletter 12 October 2021

Community Housing Aotearoa (CHA) Newsletter 12 October 2021

Message from Chief Executive, Fortnightly Sector Zoom Calls, Tenancy Management Community of Practice, Ngāti Toa Secures A Deal To Ensure High Quality, Healthy And Affordable Homes At Kenepuru Landing, More Progressive Home Ownership Opportunities for First Home...

Annual Report

CHA’s Annual Report for 1st July 2019 to 30th June 2020

CHA’s Annual Report for 1st July 2019 to 30th June 2020

Strategic Plan

CHA’s Strategic Plan 2018

CHA’s Strategic Plan 2018

Featured Network

Residential Tenancies Act Community of Practice

Residential Tenancies Act Community of Practice

Our Place

Our Place 2017

Our Place 2017

Case Studies

Media Releases

The Shift Aotearoa conference 2021 issues papers released

Community Housing Aotearoa’s three pre-conference work programmes are kicking off next week with initial zoom meetings in the Narrative Transformation and Housing System Settings streams scheduled for Tuesday 26 January at 10AM and 1PM respectively. Issues papers to...

News

CHA Level 4 Guidance Document 8 September

CHA Level 4 Guidance Document 8 September Community Housing Aotearoa (CHA) has put together this document to consolidate information, contacts, resources and advice to help you in your day to day service delivery and decision making. It will be updated as new...

Community Housing Aotearoa (CHA) COVID-19 Update 26 August 2021

Message from CHA's Chief Executive, Productivity Commission Submission - Include Housing in the Terms of Reference, CHA's support for members, sharing ideas and issues, Ministry of Health information and advice, Government support for your organisation, important...

Newsletters

Community Housing Aotearoa (CHA) Newsletter 12 October 2021

Message from Chief Executive, Fortnightly Sector Zoom Calls, Tenancy Management Community of Practice, Ngāti Toa Secures A Deal To Ensure High Quality, Healthy And Affordable Homes At Kenepuru Landing, More Progressive Home Ownership Opportunities for First Home...

Community Housing Aotearoa (CHA) Newsletter 4 October 2021

Message from Chief Executive, SUPPORT FOR MEMBERS, Be part of 'The Big Auckland Morning Tea Shout' for Auckland's frontline community workers, HUD launches new interactive housing dashboard, Submissions close tomorrow on new legislation for restricting terminations...

Submissions

Legislation

Reports

Te Whakaruruhau Report

The Te Whakaruruhau Report establishes the peak body services to the Homelessness Sector by Te Matapihi he Tirohanga mō te IwiTrust and Community Housing Aotearoa. The report can be found here: Te Whakaruruhau September 2020

Research

BRANZ research report on ‘exceeding the minimum’ released

This report looks at the question: why don’t landlords choose features that exceed the minimum building standards and what are the enablers to changing this? The aim is to identify the barriers to an improved rental stock and potential solutions to overcome the...

Community Housing Aotearoa

Contact Us

Contact Info

Level 11, Ranchhod Tower,
39 The Terrace /
102-112 Lambton Quay
PO Box 11543
Wellington 6142

+04 385 8722

support@communityhousing.org.nz

Follow On