Community Finance launches Community Housing Funding Agency with private guarantee and calls on Govt to accelerate non-state social home building with an LGFA-style guarantee
MBIE has released feedback received on the Granny Flat proposal. Not sure what their timeline is from here. The team working on it has been downsized (JOKE!).
At the end of the day, the Community Housing project is about charity housing. What’s needed to bring down rents and inflationary real estate prices with their attendant interest rates is publicly funded social housing. Nice work the philanthropists but we need an economy based on justice and equity.
The term “social housing “ annoys me. It makes the divisions in our society clear. You need “social housing” if you haven’t got the necessary abilities to make it in a free market economy. We own real estate because we grew up in ex state houses, had free education to university level and could afford our first steps into real estate. We are well off now not because of what we earned as teachers, but because of the growth in value of real estate and inheritance. The economy we have run for the last forty years is crap. It’s made housing so unaffordable for many that we need to promote “social housing” provided not by the government, but by those individuals that care enough to make an effort to right a wrong that should not be there.
I hear you Bruce, perhaps the term ‘public housing’ might be less derogatory? Important also to acknowledge that the education I got in the 60’s was not free, it was socially provided through taxation. Likewise our health system was overwhelmingly funded out of taxes. State housing,as it was called then, grew out of the policies of the First Labour Government in the 30s and 40s as a part of broad state funded response to the Great Depression. We were proud of our collective efforts to build public infrastructure such as hydro power stations, forest resources, etc. Only the arrival of neoliberalism with Thatcher, Reagan and to our shame, the Fourth Labour Government in 1984, did public education, tax funded housing, community banks ( here in Ōtautahi it was the Canterbury Savings Bank) and much more, were loudly pronounced as for the bludgers who were too lazy to get off our bums. Community assets like our post offices, banks, railway… and our stock of public housing were sold off. Yes, if you had a job still, you might pick up a state house at a reasonable market price. As a country, as a community we suffered a huge blow. The sale, the fire sale, of our socially owned resources has left millions of us in poverty. We need to get back to a spot where “social” ownership is something to be proud of. That step will help stop the drain of our youngsters across the ditch and make us feel proud again.
Totally in agreement with you Maurice. Just one part of the picture to pick on. Energy. Fundamentally important to our society. Hydro schemes built relatively quickly via taxation. Sold off for way less than it was worth. Now we have a system that is supposed work like a market, but can’t because we only have one connection per dwelling. The energy sector continues to make poor decisions because of importance of “profits”. Building for the future or factoring in climate change not happening. It’s one of the key sectors of our society that needs to be owned by society ie the government.
I worked as a bus driver for the Christchurch Transport Board until it was ‘deregulated’ at the end of the 80’s. The assets were valued at $50m when they were sold to the CCC-owned Red Bus Company for $5m. The sale included 6 as-yet to be delivered brand new vehicles valued at over $5m, plus the CTB building assets, land, etc. Within a few years the competitive tendering system put the city council company out of business and those public assets were lost. For the bus workers the deregulated system, including the soon to follow Employment Contracts Act demolished our wages and conditions, not to mention our community. The current public transport in Ōtautahi is in better shape than the national energy system you mention. But that’s a low bar.
The thing is throughout the country councils had lots of social housing including pensioner housing. And then LG politicians get elected on the promise of lowering rates and then declare council flats are not core business and sell them off.
Same thing can happen with charity social housing. It should be public housing AND community housing in my opinion.
I feel very happy everytime I go past (usually cycling) and see the 44 Kianga Ora homes built in inner New Plymouth opposite Paknsave and opened in June this year. And it was on a derelict car sales yard site.
I cling vainly to the belief that the answer to affordable homes is for the state to build, own, and manage 100,000, 200,000, 300,000 homes for secure, lifetime, income-moderated rent by all who want them.
However, this Government is resolved to destroy the state housing portfolio, and the last government during its six years in power disappeared down the rabbit-hole of KiwiBuild and simultaneously engineered perhaps the greatest house-price rise in New Zealand's history, making houses for ever unaffordable for those who did not already own one (or two, or ten).
So I guess I'm forced to say Yes to this latest community housing funding proposal, because there is not the political will in the Labour Party for anything better.
John, I'm in broad agreement with you but it's worth remembering that the Key-English government built an extra net 43, (yes, 43) new State dwellings in 9 years,(after allowing for their privatisations). The last Labour government, in contrast, built 14,000 new State dwellings in 6 years & added another 7,000 State dwellings to our housing stock through refurbishments, (21,000 in total) all done by Kainga Ora. That's why Bishop & English shut down KO's house building activities &, as you say, will try & privatise as many State dwellings as they can get away with. The only question is: why, in God's name does the Labour opposition not keep highlighting these facts?
A Wealth tax should be the new baseline of a tax reform conversation in this country. Use the bright line to have a de facto CGT for housing speculation, even if the goal line is subject to changes of Govt. TPM and Greens have run on this, and we know parts of Labour are keen. TPM and Greens should unite and make this a bottom line negotiation in any future coalition agreement.
Electorally a Wealth tax side-steps the long simmering aversion to having to pay tax on the family home, a concern I hear constantly from very-much not wealthy relatives and friends. If you can clearly campaign on a tax that 98% of the population won’t pay and can offer something universal and substantial in return (say, expanding free schooling to include ECE, free yearly GP visits, including dental treatments in the public healthcares system, lower GST, etc) - boom.
It also better addresses the root rot in our economy; concentrated pools of stagnant money sitting in non-productive assets. Better to have that flowing to more parts of the soil.
Windfall profit taxes that are triggered during periods of high inflation to punish and discourage corporations from taking advantage of inflationary periods to expand their profit margins should also be an easy sell. It could also be a part of a concerted suite of packages to better protect us from the sources of inflation in the future (alongside on-site solar energy production and EV rollouts to hedge against oil/gas fluctuations, and higher tech, decentralised food production to hedge against extreme weather damaging crop yields).
Good call. But why have so many European countries ditched them in the recent years? Lots of them had them and now, apparently very few. Presumably the antis would seize on those reasons to oppose them
Wealth can be hard for the Inland Revenue Department to pin down, and easily moved beyond its reach overseas.
Except the fixed and visible wealth of land and buildings.
Which is why land tax and capital gains tax make more sense than a broad wealth tax.
And land tax already exists as local-body rates.
Which leaves capital gains tax on the sale of fixed property, including the family home.
Susan St John and Terry Baucher have proposed a form of this which, to make it politically acceptable, would effectively exempt the first $1 million of property value, excusing most home owners from this Fair Economic Return version of a CGT.
I hope Labour brahmins will give it serious thought.
Re "the long simmering aversion to having to pay tax on the family home, a concern I hear constantly from very-much not wealthy relatives and friends" - yes. I know someone who struggled for several decades as a homeowner, in the early stages having to get flatmates to cover the mortgage, having to top up the mortgage to pay for repairs and facing difficult personal/relationship issues later on. They eventually sold for a good capital gain but it's hard to begrudge them that considering how hard much of their life as a homeowner was.
On obesity as NZs leading death and disability risk factor: we need strong regulation and policy to protect public health from the food industry behemoths, and the public want this. Also, we need our streets redesigned to allow people and families the choice to travel around their neighbourhood safely by walking, cycling, scootering, wheelchairing. When the car is the only choice perceived as viable, we trap people into lots of time sitting inactive in a big metal box. And voila, lots of obesity results.
Re the deep dive Post article on our public health system - how is it possible to talk sensibly about this without stating as a starting fact that this year the operational health budget has a real 3% per capita cut compared to past budgeted amounts?
Since the salvation army is involved in social housing, will there be discrimination against LGBTQ people? I've heard some pretty unjust stiories about how the sallys rejected people, especially LGBTQ people
I think this is a fair question to ask. If and when CHPs effectively start to take the place of public housing then they need to meet the same standards as the state to ensure particular groups of people aren’t left unserved. Tricky as currently the CHPs choose their customers.
Annoyingly they ask you to subscribe even to read many of the free stories (as in you need to provide a username and password, but not hand over any money).
I'd love to know what they're doing with the data.
guarantee us and we will build? FFS why doesn't government build them then? in my mind, if you guarantee, that is a contingent liability on the government accounts.
or how about we stop paying the accommodation supplements and reset the private rental market. That is north of NZ$ 2 Billion per annum.
Privatization and philanthropy: Ayn Rand 101. Health & housing in NZ white-anted and dished up to private money. Atlas Network is Ayn Rand metastasized through 45 years of neoliberal ideology and state plunder into obscene oligarchy sliding into autocracy, 40 years after Orwells "1984".
Many renters need a new model of community-enhancing, sustainable & affordable housing. Health & housing intimately associated in longer term.
Well put together so that I read to the end having seen signs of hope, even if often just the hope that something might come of well-written reports and analyses.
Hi Bernard, it took me a few hours to get to reading this one today, but my first thought was, this flavour of "social housing" sounded a bit gaslighty. Coming to the comments, it seems like I'm not the only one with that concern. I would love to hear your thoughts about the pros and cons of private/community housing provision vs public/state housing (beyond ideology)... My instinct is that the state should (by dint of democratic accountability and scale) always be cheaper, better, more responsive, and more inclusive - assuming equally competent management. Therefore, further concentrating something as important as shelter for vulnerable people into private control just seems risky, right? For example, what's to stop a CHiP from shadow-offering their housing only to people who are part of their congregation/not LGBTQ/no criminal record etc? What's to stop a CHiP from employing a CEO on a $2.9m salary or selling out to a private equity firm? How transparent about rent increases or service levels do private housing providers need to be? Even before they are operating, in the short time that Kāinga Ora was fully operational it had to bail out a bunch of failed private developments. So, unsurprisingly, since they were knee-capped we've ended up with hundreds of half-finished houses rotting in the weather because there's no one empowered to finish and operate them. If something like an interest rate or building cost increase means these houses suddenly make social-but-not-financial sense, they basically become stranded (even as investors recover their money by way of government bail-outs). With all that said, I just can't understand what the private incentive to build social housing is. There are much easier ways to 'do charity', and if it's for 'profit' that seems to defeat the whole purpose of it... Would love someone to explain how this isn't just another neoliberal shell game to me.
Hi Tim. You are correct in your analysis. We seem to be just chipping away at the edges, trying to alleviate some of the really big problems this insane neoliberal economic system has got us into. Historically NZ has solved housing problems by the government building them. At least twice.
This just sounds like another way to shift money from government to the private sector. If these so-called ‘philanthropists’ want to do good, why don’t they build housing that is needed without involving government guarantees. Just a lower profit model where occupiers could then rent to buy. I don’t trust the model as proposed.
I think they need the guarantees to make the cost of borrowing affordable, in the same way that councils' borrowing costs are way less expensive if the government underwrites them.
MBIE has released feedback received on the Granny Flat proposal. Not sure what their timeline is from here. The team working on it has been downsized (JOKE!).
https://www.building.govt.nz/about-building-performance/all-news-and-updates/summary-of-granny-flats-consultation-feedback
At the end of the day, the Community Housing project is about charity housing. What’s needed to bring down rents and inflationary real estate prices with their attendant interest rates is publicly funded social housing. Nice work the philanthropists but we need an economy based on justice and equity.
The term “social housing “ annoys me. It makes the divisions in our society clear. You need “social housing” if you haven’t got the necessary abilities to make it in a free market economy. We own real estate because we grew up in ex state houses, had free education to university level and could afford our first steps into real estate. We are well off now not because of what we earned as teachers, but because of the growth in value of real estate and inheritance. The economy we have run for the last forty years is crap. It’s made housing so unaffordable for many that we need to promote “social housing” provided not by the government, but by those individuals that care enough to make an effort to right a wrong that should not be there.
I hear you Bruce, perhaps the term ‘public housing’ might be less derogatory? Important also to acknowledge that the education I got in the 60’s was not free, it was socially provided through taxation. Likewise our health system was overwhelmingly funded out of taxes. State housing,as it was called then, grew out of the policies of the First Labour Government in the 30s and 40s as a part of broad state funded response to the Great Depression. We were proud of our collective efforts to build public infrastructure such as hydro power stations, forest resources, etc. Only the arrival of neoliberalism with Thatcher, Reagan and to our shame, the Fourth Labour Government in 1984, did public education, tax funded housing, community banks ( here in Ōtautahi it was the Canterbury Savings Bank) and much more, were loudly pronounced as for the bludgers who were too lazy to get off our bums. Community assets like our post offices, banks, railway… and our stock of public housing were sold off. Yes, if you had a job still, you might pick up a state house at a reasonable market price. As a country, as a community we suffered a huge blow. The sale, the fire sale, of our socially owned resources has left millions of us in poverty. We need to get back to a spot where “social” ownership is something to be proud of. That step will help stop the drain of our youngsters across the ditch and make us feel proud again.
Totally in agreement with you Maurice. Just one part of the picture to pick on. Energy. Fundamentally important to our society. Hydro schemes built relatively quickly via taxation. Sold off for way less than it was worth. Now we have a system that is supposed work like a market, but can’t because we only have one connection per dwelling. The energy sector continues to make poor decisions because of importance of “profits”. Building for the future or factoring in climate change not happening. It’s one of the key sectors of our society that needs to be owned by society ie the government.
I worked as a bus driver for the Christchurch Transport Board until it was ‘deregulated’ at the end of the 80’s. The assets were valued at $50m when they were sold to the CCC-owned Red Bus Company for $5m. The sale included 6 as-yet to be delivered brand new vehicles valued at over $5m, plus the CTB building assets, land, etc. Within a few years the competitive tendering system put the city council company out of business and those public assets were lost. For the bus workers the deregulated system, including the soon to follow Employment Contracts Act demolished our wages and conditions, not to mention our community. The current public transport in Ōtautahi is in better shape than the national energy system you mention. But that’s a low bar.
We’ve work to do. Together. ✊🏼
The thing is throughout the country councils had lots of social housing including pensioner housing. And then LG politicians get elected on the promise of lowering rates and then declare council flats are not core business and sell them off.
Same thing can happen with charity social housing. It should be public housing AND community housing in my opinion.
I feel very happy everytime I go past (usually cycling) and see the 44 Kianga Ora homes built in inner New Plymouth opposite Paknsave and opened in June this year. And it was on a derelict car sales yard site.
https://kaingaora.govt.nz/en_NZ/news/44-new-homes-and-a-community-space-for-leach-street/
I cling vainly to the belief that the answer to affordable homes is for the state to build, own, and manage 100,000, 200,000, 300,000 homes for secure, lifetime, income-moderated rent by all who want them.
However, this Government is resolved to destroy the state housing portfolio, and the last government during its six years in power disappeared down the rabbit-hole of KiwiBuild and simultaneously engineered perhaps the greatest house-price rise in New Zealand's history, making houses for ever unaffordable for those who did not already own one (or two, or ten).
So I guess I'm forced to say Yes to this latest community housing funding proposal, because there is not the political will in the Labour Party for anything better.
John, I'm in broad agreement with you but it's worth remembering that the Key-English government built an extra net 43, (yes, 43) new State dwellings in 9 years,(after allowing for their privatisations). The last Labour government, in contrast, built 14,000 new State dwellings in 6 years & added another 7,000 State dwellings to our housing stock through refurbishments, (21,000 in total) all done by Kainga Ora. That's why Bishop & English shut down KO's house building activities &, as you say, will try & privatise as many State dwellings as they can get away with. The only question is: why, in God's name does the Labour opposition not keep highlighting these facts?
A Wealth tax should be the new baseline of a tax reform conversation in this country. Use the bright line to have a de facto CGT for housing speculation, even if the goal line is subject to changes of Govt. TPM and Greens have run on this, and we know parts of Labour are keen. TPM and Greens should unite and make this a bottom line negotiation in any future coalition agreement.
Electorally a Wealth tax side-steps the long simmering aversion to having to pay tax on the family home, a concern I hear constantly from very-much not wealthy relatives and friends. If you can clearly campaign on a tax that 98% of the population won’t pay and can offer something universal and substantial in return (say, expanding free schooling to include ECE, free yearly GP visits, including dental treatments in the public healthcares system, lower GST, etc) - boom.
It also better addresses the root rot in our economy; concentrated pools of stagnant money sitting in non-productive assets. Better to have that flowing to more parts of the soil.
Windfall profit taxes that are triggered during periods of high inflation to punish and discourage corporations from taking advantage of inflationary periods to expand their profit margins should also be an easy sell. It could also be a part of a concerted suite of packages to better protect us from the sources of inflation in the future (alongside on-site solar energy production and EV rollouts to hedge against oil/gas fluctuations, and higher tech, decentralised food production to hedge against extreme weather damaging crop yields).
Good call. But why have so many European countries ditched them in the recent years? Lots of them had them and now, apparently very few. Presumably the antis would seize on those reasons to oppose them
Wealth can be hard for the Inland Revenue Department to pin down, and easily moved beyond its reach overseas.
Except the fixed and visible wealth of land and buildings.
Which is why land tax and capital gains tax make more sense than a broad wealth tax.
And land tax already exists as local-body rates.
Which leaves capital gains tax on the sale of fixed property, including the family home.
Susan St John and Terry Baucher have proposed a form of this which, to make it politically acceptable, would effectively exempt the first $1 million of property value, excusing most home owners from this Fair Economic Return version of a CGT.
I hope Labour brahmins will give it serious thought.
https://www.auckland.ac.nz/assets/business/our-research/docs/economic-policy-centre/pensions-and-intergenerational-equity/PIE%20Policy%20Paper%202022-2%20Fair%20Economic%20Return%20revisited.pdf
Re "the long simmering aversion to having to pay tax on the family home, a concern I hear constantly from very-much not wealthy relatives and friends" - yes. I know someone who struggled for several decades as a homeowner, in the early stages having to get flatmates to cover the mortgage, having to top up the mortgage to pay for repairs and facing difficult personal/relationship issues later on. They eventually sold for a good capital gain but it's hard to begrudge them that considering how hard much of their life as a homeowner was.
When you factor in the amount of interest one paid on the mortgage of the family home, do you really have a capital gain or is it a paper one?
It's a complicated issue because our economy is basically a housing market.
I don't think one tax will solve it. It has to be a combination of taxes, incentives and a massive house building programme.
Another way to limit windfall profits is to reintroduce the regulation of excess profit back into the Commerce Act.
On obesity as NZs leading death and disability risk factor: we need strong regulation and policy to protect public health from the food industry behemoths, and the public want this. Also, we need our streets redesigned to allow people and families the choice to travel around their neighbourhood safely by walking, cycling, scootering, wheelchairing. When the car is the only choice perceived as viable, we trap people into lots of time sitting inactive in a big metal box. And voila, lots of obesity results.
Love a sweet pea .. 🥰
Just heard that Nikki Kaye has died - aged only 44. A stalwart of a National administration that presided over happier times that the current one. RIP
Re the deep dive Post article on our public health system - how is it possible to talk sensibly about this without stating as a starting fact that this year the operational health budget has a real 3% per capita cut compared to past budgeted amounts?
I don't mean to be negative... but question...
Since the salvation army is involved in social housing, will there be discrimination against LGBTQ people? I've heard some pretty unjust stiories about how the sallys rejected people, especially LGBTQ people
I think this is a fair question to ask. If and when CHPs effectively start to take the place of public housing then they need to meet the same standards as the state to ensure particular groups of people aren’t left unserved. Tricky as currently the CHPs choose their customers.
Bernard, you need to put $$ next to the post articles link. Each one asked me to subscribe
Annoyingly they ask you to subscribe even to read many of the free stories (as in you need to provide a username and password, but not hand over any money).
I'd love to know what they're doing with the data.
guarantee us and we will build? FFS why doesn't government build them then? in my mind, if you guarantee, that is a contingent liability on the government accounts.
or how about we stop paying the accommodation supplements and reset the private rental market. That is north of NZ$ 2 Billion per annum.
Privatization and philanthropy: Ayn Rand 101. Health & housing in NZ white-anted and dished up to private money. Atlas Network is Ayn Rand metastasized through 45 years of neoliberal ideology and state plunder into obscene oligarchy sliding into autocracy, 40 years after Orwells "1984".
Many renters need a new model of community-enhancing, sustainable & affordable housing. Health & housing intimately associated in longer term.
Right on!
Well put together so that I read to the end having seen signs of hope, even if often just the hope that something might come of well-written reports and analyses.
Beautiful nature photo too.
Hi Bernard, it took me a few hours to get to reading this one today, but my first thought was, this flavour of "social housing" sounded a bit gaslighty. Coming to the comments, it seems like I'm not the only one with that concern. I would love to hear your thoughts about the pros and cons of private/community housing provision vs public/state housing (beyond ideology)... My instinct is that the state should (by dint of democratic accountability and scale) always be cheaper, better, more responsive, and more inclusive - assuming equally competent management. Therefore, further concentrating something as important as shelter for vulnerable people into private control just seems risky, right? For example, what's to stop a CHiP from shadow-offering their housing only to people who are part of their congregation/not LGBTQ/no criminal record etc? What's to stop a CHiP from employing a CEO on a $2.9m salary or selling out to a private equity firm? How transparent about rent increases or service levels do private housing providers need to be? Even before they are operating, in the short time that Kāinga Ora was fully operational it had to bail out a bunch of failed private developments. So, unsurprisingly, since they were knee-capped we've ended up with hundreds of half-finished houses rotting in the weather because there's no one empowered to finish and operate them. If something like an interest rate or building cost increase means these houses suddenly make social-but-not-financial sense, they basically become stranded (even as investors recover their money by way of government bail-outs). With all that said, I just can't understand what the private incentive to build social housing is. There are much easier ways to 'do charity', and if it's for 'profit' that seems to defeat the whole purpose of it... Would love someone to explain how this isn't just another neoliberal shell game to me.
Hi Tim. You are correct in your analysis. We seem to be just chipping away at the edges, trying to alleviate some of the really big problems this insane neoliberal economic system has got us into. Historically NZ has solved housing problems by the government building them. At least twice.
This just sounds like another way to shift money from government to the private sector. If these so-called ‘philanthropists’ want to do good, why don’t they build housing that is needed without involving government guarantees. Just a lower profit model where occupiers could then rent to buy. I don’t trust the model as proposed.
I think they need the guarantees to make the cost of borrowing affordable, in the same way that councils' borrowing costs are way less expensive if the government underwrites them.