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Speech to the Community Housing Aotearoa Conference

Speech to the Community Housing Aotearoa Conference. July 3, 2014.

Good evening. Thank you for the opportunity to be with you tonight.

I want to acknowledge your co-chairs Alison Cadman and Warren Jack, and of course your director Scott Figenshow.

Community housing is on an exciting growth curve. I have no doubt the quality of your leadership is partly responsible for the change so far. It also means you are well equipped to seize the opportunity on offer.

I feel similarly bullish about the role of central government in housing.

We are on the cusp of some exciting change.

I am going to talk about two things. First about how a Labour-led government will fix the housing crisis.

Second, the important role of your sector in making our housing fit for the 21st century.

Let’s start with the big picture. We all know there is a housing crisis. It’s a case of market failure, and policy failure.  And it is hurting everyone – bar the speculators.

It’s not a simple equation. It is going to take bold action on a number of fronts.

It will take a Government with the political will and the policies to ensure:

  • First home buyers can get into the market
  • That we are building enough houses
  • That there are enough affordable houses
  • That we are building the right mix of housing types.

Labour through our Kiwibuild policy will build 100,000 affordable homes over 10 years and sell them to first home buyers.

It is inspired by the house building of the first Labour Government in the 1930s and 40s. And by successive governments in the 1950s, 60s and 70s who used state advances loans to stimulate new house construction, and help generations of New Zealanders into their first homes.

We are going to quieten down the speculative forces that are driving house prices higher and higher particularly in Auckland, with a Capital Gains Tax that excludes the family home.

And by putting a stop to offshore speculators farming New Zealand houses for capital gain.

Our monetary policy reforms will lower interest rates, easing the burden on home buyers.

Productivity reforms will drive down building costs.

Kiwibuild, building at scale – 10,000 new houses a year for a decade – will allow us to shift to off-site manufacturing that will deliver higher quality homes. Recent modelling by an independent industry group estimated offsite manufacturing could knock $32,000 off the price of a standard home.

Scale will also allow us to crash through the anti-competitive practices that have the Kiwi home buyer paying up to 25% more for building materials than the Aussies do. We’ll do procurement deals on materials that haven’t been seen in this country.

We have to reform the planning rules that add risk, delay and cost to new developments. We need a regulatory framework that encourages more and better urban development including affordable housing.

If we ease the rules that prevent intensification, and set the bar high for good urban design, and green space, we would unleash high quality urban development in our city and town centres – that would deliver more affordable housing where people want to live - and there would be much less pressure for sprawl on the fringes.

We will start by writing a National Policy Statement under the RMA that gives strong direction to local authorities that their plans and consenting decisions must give priority to increasing the new build rate, and affordability.

So that is all about trying to get the market working again, and get us out of the current mess.

But its Labour’s view that the market alone won’t deliver enough affordable housing to meet the needs of those people who simply cannot afford to buy their own home. That’s currently 40% of households.

Think of the poorest 25% of households. The great majority of them living in poor quality private rentals, with little security of tenure, and rents eating up a large share of household income. It’s not a pretty picture.

We – government, community and private sector – need to be working together to deliver high quality affordable housing for those people.

There are a number of things we need to do:

Fixing the overall market failure will certainly help.

We can regulate the rental market – our healthy homes guarantee will ensure that every rental property is warm and dry by making sure they are insulated and have an efficient heating source.

But a big part of the solution for the 25% who are struggling is to have a strong and innovative social housing sector.

Our vision for that is to have Housing NZ, local authorities, and a bigger, stronger community housing sector working in partnership to deliver more social housing, more diverse types of housing, and a broad range of services.

We are committed to your members having access to the Income Related Rent Subsidy, to capital grants, and stock transfer.

The next Labour-led Government will sit down with you and negotiate a five year plan to grow the sector in a way that realises your ambitions to do more, and delivers robust organisations and accountability for the taxpayer.

Labour also believes that as well as changing the way we work together, we also have to grow the social housing sector. It is inadequate that at the moment social and state housing puts a roof over the heads of only 4-5% of households.

A far bigger number of people who are just as vulnerable, are left to languish at the bottom end of the private rental market in sub-standard and often overcrowded conditions.

We have to grow the whole social housing sector. That means as a priority growing you, the community providers.

We don’t intend to wind back Housing NZ as the current government is doing. We see an important role for a government backed provider of income-related social rental housing.

Labour is clear about your organisations and where you contribute on the housing continuum. We want you to play to your strengths.

We don’t simply see the community housing sector as there to do the government’s job for them - especially as the current government pulls back on social housing provision.

You have real strengths in supported affordable first-home ownership and also in providing specialised supported living. That frees up HNZ to be the landlord for low-income families primarily.

If we want the sector to work in partnership then we need a culture change in Housing NZ so they appreciate that they are an equal partner with the community housing sector and not in a master-servant relationship.

Tenants with high and complex needs may be better off being transferred to a community housing provider for example so there can’t be any patch protection.

I see huge benefits in this vision of a bigger, more diverse social housing sector:

  • Diversity, competition and collaboration can stimulate innovation, clever ideas, the power of a good example.
  • Your members have shown you can build good quality homes at a very affordable price. You can leverage private sector investment.
  • Others have demonstrated the ability to combine housing with social services that support high-needs tenants.
  • A number of iwi are emerging as major investors and developers of commercial, papakainga, and affordable housing with some impressive innovation.
  • And it is my hope that a bigger stronger sector will also act as a powerful civil society voice on housing policy, willing to partner with the government, but also to disagree when necessary and advocate for the public good.

Let me finish by saying that we can work with you to build a stronger social housing sector, we can reform the planning rules, tax the speculators, and build large numbers of houses, but some of the biggest gains will come by changing what we build and how we build.

I agree with Stephen Selwood’s comments that we need, particularly in our bigger centres, large scale urban developments backed by private sector developers and community housing organisations.

This needs all of us to change the way we operate. We need to work together, and scale up.

And as I know you understand well, we need to build communities, not just houses.

Such developments cannot happen without government, central and local, playing an enabling role. Developments need to be master planned, urban design standards set, public space and infrastructure allowed for.

Private sector developers will then invest and do what they do best: designing and building great places for people to live work and play.

Then there is a vital role for community housing providers to add affordable and social housing to the mix, ensuring we have diverse communities, with opportunity for the young and security for the old, with a range of housing types, with the best of architectural and urban design.

I look forward to working together with you to make this vision a reality.