The Kiwibuild reset took nine months to announce after criticisms over its lack of progress and affordability, with some critics explicitly naming the policy ‘middle-class welfare’. The details of the reset, however, demonstrate that the Labour Government is still unwilling to actually address the housing crisis.
Now, the Labour Government is refocusing its housing policy on progressive homeownership schemes and reducing the deposits required to access Kiwibuild. The government’s response to the failures of homes in particular areas to sell is to list them on the open market. If the homes are not selling to First Home Buyers, the targeted group for the scheme, they are most likely to be bought on the open market by speculators. The Labour Government has argued that their original targets were too ambitious and this was the root causes of its failure. However, the government is more than capable of building 100,000 homes over 10 years, and the barrier to achieving it is its unwillingness to adequately tax the wealth of those profiting from the housing crisis.
While the Labour Government attempted to address criticism, it failed to respond to one of the most pressing issues – Kiwibuild funding should have been redirected to build more public housing. While progressive homeownership schemes provide some people with access to the housing ladder, a more progressive policy could simultaneously service the needs of those experiencing the deepening levels of homelessness as well as the needs of those desiring homeownership. This would involve a mass build in public housing, making tenures secure for life and opening up the criteria to open up access to low and middle-income earners. An ambitious policy like this would also protect renters from private landlords, make market house prices more affordable, save public land from privatisation and create a continuous funding stream for building additional housing stock.
The Labour Government, while tepidly critical of the private market’s failure to house people, remains committed to the private market as a means to solve the housing crisis. As of June 2019 there were 12,311 people on the public housing register, up from 8,704 in 2018. The need for public housing stretches far beyond the confines of the register, and well beyond the government’s current target of 1,600 houses a year (many of which are being acquired rather than built). Many people who do not fit the criteria for public housing because they earn over the threshold are living in substandard private rentals and paying exorbitant rents. There are many people in private rentals who would benefit from access to secure public housing.
The Labour Government is still fleshing out progressive home ownership schemes, which could come in the form of shared equity or rent to buy. Rent-to-buy is essentially a right to buy scheme that allows people to use rental payments to eventually reach a deposit and move onto paying a mortgage. While rent-to-buy is desirable to those seeking their first home but unable to achieve a deposit, we need to be critically aware of the incompatibilities of neoliberal housing policies and progressive housing policies for addressing the housing crisis more generally. Margaret Thatcher used right-to-buy schemes in the UK in the 1980s to privatise council housing, and to create tenure divisions. The idea that it was a natural desire for people to want to own their home was used as the ideological backing of policies which were only accessible to a select few. While some individuals moved into homeownership, it devastated the lives of many people who no longer had access to secure public rentals. While the New Zealand Labour Government is not proposing to sell state housing, it is using Crown land to build Kiwibuild and private housing, which amounts to privatisation by stealth.
The Labour Government, in common with National before it, is removing state housing while building mixed-tenure communities (public, affordable, private). The Kāinga Ora Bill will help facilitate these large-scale developments at speed and scale. While there is a need to increase housing supply, these large-scale housing developments move significant amounts of public land into the private market. Once land is divided into individual property titles it becomes difficult for the land to be returned to mana whenua or used to increase public housing stock in the future. Even if some form of shared ownership Kiwibuild housing remains off the market for a certain time period, the houses can eventually be sold at market price.
Building private housing, whether affordable or market housing, in low-income neighbourhoods also risks state-led gentrification. Urban regeneration is the new word for gentrification where the state invests money into housing and infrastructure in communities and private developers sweep in to make profits from building expensive housing in previously low-income communities. This does not only impact public housing tenants; it also impacts private renters displaced from their communities as landlords capitalise on increasing land values by on-selling their rental properties. This produces a precarious rental market that sees tenants moved on with increasing frequency.
Development of mixed-tenure communities comprising public and private housing, is argued to be best practice in urban housing development because they supposedly provide low-income tenants with social capital and reduce stigma. The international experience, however, suggests there is little evidence that this model works. In many cases of mixed-tenure development land values increase, former residents are displaced and there is further stigmatisation of low-income tenants. Communities which have been underfunded and neglected need investment, but better housing and infrastructure should not come as a result of processes of displacement and gentrification.
A common argument for state-funded homeownership schemes is that they will give people better life outcomes and opportunities. The argument made for this is that moving up the housing ladder to homeownership leads to upward social mobility while living in public housing creates intergenerational poverty. There is little evidence to support this position. Housing tenure does not define economic status. Paying 25 percent of your income on rent certainly does not cause poverty, in fact Income Related Rents and public housing are a huge factor in providing good outcomes for those on low-incomes because the majority of people’s income is not being extracted for rent. Rather than being caused by tenure status, poverty in Aotearoa New Zealand results from its economic model of low wages and low benefit levels, compounded by a wealthy elite dependent on rent extraction. The stigma associated with public housing has contributed to it being side-lined as a solution, and has been used as a justification for gentrifying state housing-dense communities.
The Welfare Expert Advisory Group was clear that people who are homeless, on benefits and those on low-incomes are suffering because of an inadequate supply in public housing. They argued for the ‘state to expand and accelerate the building of public housing to an industrial scale’. Treasury, in their Briefing to the Incoming Minister of Housing, argued that more funding needs to be allocated to public housing and that Kāinga Ora should focus on lowering house prices. Economist Shamubeel Eaqub has argued for more public housing and secure rentals against the idea that simply increasing the supply of housing will solve the crisis. Even the OECD have argued that Kiwibuild money should be reallocated to public housing.
A better solution for Kiwibuild is not private market housing at all, but a mass industrial scale build of public housing (both state and council) alongside massive investment in papakāinga housing for mana whenua and marae. Beautiful, well-built and environmentally sustainable public housing with secure tenure for life. This should involve opening up the criteria so that all those who are on the housing waitlist and all those trapped in private rentals desiring an out can have access to Income Related Rents. This would mean teachers and nurses could afford to live where they work, it could mean that everyone is housed. Public housing could become a desirable alternative to homeownership for those locked out of the housing market. The Kiwibuild reset made an important point around intergenerational living. Families, friends and communities in many different shapes and forms should be able to live together and any reorientation in public housing policy should accommodate this.
The proposal for universal access to public housing is not a radical idea, it already exists in Austria and the Netherlands, and is being proposed by the Green Party in Australia. If there is an adequate supply of good quality public housing and more people can access it, private landlords will be forced to lower their rental prices to compete, this will reduce speculation in the housing market and house prices could fall as a result. In a climate where politicians are beholden to property owners and landlords, it is clear to see why public housing is not a political priority.
Public housing is not without its contradictions in Aotearoa New Zealand. We must build to solve the housing crisis but who we are building for and where we are building are essential to the discussion. The Government must prevent housing being built on wāhi tapu, stolen land must be returned and we must confront the history of land theft through the Public Works Act for the purposes of state housing. The government must be involved in redistributing wealth for papakāinga to mana whenua and urban marae. This requires the State building genuine relationships with mana whenua, marae and Māori housing organisations when it comes to housing. At the same time significant spaces such as Ihumātao are under threat of development, the property rights of wealthy people in inner-city colonial ‘character’ suburbs are protected from any form of development. It is clear the government cares more for the property values of the wealthy than upholding Te Tiriti o Waitangi.
There are, however, publicly owned spaces, such as car parks and golf courses, which could potentially be used for public and papakāinga housing. If the Labour Government is serious about addressing the housing crisis, it must have a policy which moves towards a future of de-commodified housing. As long as there are those who profit from unaffordable house and rental prices, there will be homelessness. A property owning ‘democracy’ is not a democracy at all where collective wellbeing is diminished for the advancement of individual property rights. Moving beyond individual homeownership as the only form of security for those who can afford it, to a system of public housing and papakāinga housing with security of tenure could create an equitable and just housing system which is based on, and benefits, people and not profit.
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