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Key’s housing plan will make crisis worse

John Key's plan to sell off state houses and instead give subsidies to landlords is economically stupid and will make the housing crisis worse, says Labour's Housing spokesperson Phil Twyford.

“There are three very good reasons why John Key’s plan is a terrible idea.

“Subsidies for private landlords will drive up rents. Vulnerable families will have to compete with other renters and first home buyers, making an already difficult housing market even harder to get into. And subsidies have only a short term effect, whereas a house is an asset that can support vulnerable families for decades.

“John Key’s plan is a win for landlords. Rent subsidies are a continuous transfer of wealth to private landlords, which will drive up rents for all renters.

“The advantage of having houses owned by the government or community housing providers is that when the market tightens up, at least you know there is a pool of houses earmarked for the most vulnerable families.

“Under John Key's plan to dish out subsidies to landlords, social housing tenants would compete in the market with first home buyers and other renters.

“Building more state and social housing – although initially more of an outlay than a rent subsidy – is a one-off cost for an asset that will help struggling Kiwi families for years to come.

“John Key's plan is an Alice in Wonderland policy. There is a shortage of social housing, so you sell off the houses you do own.

“John Key grew up with the benefit of a secure decent state house. Now he is pulling up the housing ladder behind him, denying a new generation of young New Zealanders the start in life he had,” says Phil Twyford.