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Phil Twyford Speech to Habitat for Humanity

I don’t think I need to sugar coat this for you. I think we all know that housing in this country is in the grip of a social and economic crisis.

 

Home ownership rates are the lowest in 64 years. And falling.

 

 

We have rising homelessness.

 

Escalating housing costs are driving people into poverty. The average rent rose by $2000 a year over the last 12 months.

 

Auckland has a housing bubble – houses are over valued by 30-40% - and if it bursts it will cause immense social and economic damage.

 

Gen X and Y are locked out of home ownership. The housing crisis is driving greater inequality between young and old, between rich and poor.

 

A few weeks ago I found a young mum with a toddler, and another one on the way, sleeping in her car at the bottom of my street in West Auckland.

 

A couple of days later, there was a story on the news about a $5 million house in Herne Bay that had been left vacant – a ghost house – by its overseas owners who were making such big capital gains they werent bothered to rent it out to tenants.

 

I don’t want our country to be this way. We are better than this.

 

Labour believes fixing the housing crisis is one of the major tasks for our generation.

 

We have to untangle years of policy failure.

 

It will take bold and sustained policy reform across a number of fronts. I want to set out Labour’s reform agenda for you, and talk about the role of the community housing sector, and the opportunities I see for Habitat in these changes.

 

But I can’t not comment on the current government’s performance in this area. They’ve been busy with a series of cosmetic initiatives, with three Ministers of Housing, all designed to convey the impression of activity, while having minimal impact.

 

Special Housing Areas, their policy to increase the supply of housing in Auckland, have led to only 500 houses being built in two years, even though Auckland needs 13,000 a year just to keep up with population growth – never mind the accumulated shortage of 32,000 houses.

 

The so called bright-line tax test to catch speculators will according to Treasury only raise $5 million, and will have little effect.

 

The much hyped suspension of tariffs on building products which they claimed would reduce the cost of a new home by $3500 has had no discernible impact according to government officials.

 

So why so much political theatre but so little serious policy?

 

Two reasons: The Government has taken the cynical view that there are enough voters happy with rising house prices that they don’t want to disturb that by slowing house price inflation.

 

But now the Auckland housing situation is so out of control, they are dead scared anything they do might burst the bubble before the next election.

 

Labour believes we have to fix a seriously broken housing market.

 

It will take bold reform, and innovation across the entire housing continuum.

 

  • We will build 100,000 affordable homes for first home buyers.

 

  • We will crack down on speculators, starting with a ban on non-resident foreigners buying existing houses.

 

  • We will make renting better by giving tenants more security of tenure, and setting minimum standards to make all rental properties warm and dry.

 

  • We will end homelessness by making available the houses, and the funding for essential support services to help the homeless get their lives back on track.

 

  • We will reform the planning rules to stop them choking off the supply of land, to free up the controls on density that prevent affordable medium density housing being built in places where people want to live.

 

 

I want to turn now to the future of state and social housing, and the opportunities for the community housing sector.

 

The National Government has tried to frame its state house sell off as a reform that is about modernising an outdated state housing model.

 

They said it was about building a strong community housing sector, but then opened up the sales process to merchant bankers and property developers, and required the houses to be sold off in lots of 100 or more out of reach of most community housing groups.

 

They said it was about increasing supply but have overseen a net reduction of 1000 state houses.

 

They said local groups would be more in touch with the needs of tenants than bureaucrats from Wellington, but then they opened the sales process to overseas interests.

 

They have pulled more than half a billion dollars out of Housing NZ and put that money straight into the government coffers, while 2000 state houses lie empty, and young children like Emma Lita Bourne get sick and die in cold, mouldy, damp houses.

 

I believe their policy is actually about divestment, privatisation. National doesn’t believe the taxpayer should own houses, and they prefer instead to pay subsidies.

 

Labour’s vision is for a bigger, more diverse, and more capable sector providing social and affordable housing.

 

We want to grow the sector. We will build thousands of new houses. Currently only 4% of New Zealanders get the benefit of state and social housing. The sector is overwhelmed and unable to address a fraction of the desperate social need that is out there. We need more houses

 

You will hear me being critical of the Government’s state house sell off. But don’t mistake that for Labour just wanting to keep the status quo.

 

We want to build up the community housing sector. We will sit down with you and negotiate a 5-10 year plan to build the sector.

 

We won’t drive you into the arms of financiers and property developers.

 

We will continue to extend the Income Related Rent Subsidy to community housing providers. And we think capital grants should be reinstated as a way to drive growth.

 

We won’t turn the community housing sector inside out trying to contrive some kind of artificial market in social housing.

 

The market will never on its own deliver high quality accessible housing for the most vulnerable people. That’s why we have state and social housing.

 

But together a bigger more vibrant community housing sector, alongside Housing NZ and local government, could deliver more and better housing – and be a big part of the solution to the housing crisis.

 

There are great opportunities for innovation and new ways of working. One of those is in scaling up the assisted home ownership work that you do so well.

 

Our Kiwibuild programme is designed to bring vast numbers of new affordable houses to the market to increase the supply of housing, and to help a new generation into home ownership. Much as the state advances loans (3% mortgages) did for our parents generation.

 

But if we want to extend the opportunity for home ownership further along the housing continuum, then rent to buy is an obvious way to do it.

There is one good thing about the housing crisis. It has stimulated public debate and a contest of ideas.

 

The policies are there. The public are hungry for change. The missing ingredient is political will.

 

Thank you for having me along, and I would welcome your questions and comments.

 

 

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