The ‘Build-Sell-Build’ plan will demolish housing crisis

Andrew Little 

As I travel the country holding public meetings, Housing is the Number One issue people raise with us, every single place we go.

I remember knocking on doors in Mt Roskill and discovering three families crammed into a modest home. It was the same all down the street, house after house over-crowded.

Recently, I stood with a woman in Hamilton as she showed me her once thriving state house community, now a bunch of broken down buildings, a haven for crime.

National has emptied out the houses and left them rotting in the middle of the housing crisis.

I am worried that as homeownership gets more and more out of reach, we are losing something of what makes New Zealand special.

Secure nest

For (my wife) Leigh and me, owning our first home – the place we brought our baby home to – gave us an immense feeling of security.

The place we now call home in Island Bay is where our family relaxes, plays with our dog Harry and enjoys each other’s company.

It is our warm, secure nest. That’s something every family wants.

But the housing crisis is denying people the Kiwi dream of owning your own place. It’s forcing up rents and making families homeless.

Bill English calls that a ‘problem of success.’

I call it a failure of leadership. National had nine years. Their tinkering around the edges is not working.

It is time for some fresh thinking.

Of course, tackling the housing crisis is not a matter of quick fixes.

We need a comprehensive plan.

So, what will Labour do?

The first thing is: build houses. Particularly, the starter homes that private developers don’t build because they’re not as profitable.

Labour’s Plan

Here is our plan. We call it KiwiBuild.

First, the government builds some good, starter homes. Then, it sells them to first home buyers at cost. It uses that money to build more, and sell them. Build, sell, build, sell. Over and over. By building modest homes at scale, the cost stays down – and because the homebuyers buy the houses, the cost sits with them, not taxpayers.

KiwiBuild will be largest house building programme since the late Prime Minister Michael Joseph Savage carried that dining table into 12 Fife Lane, and I cannot wait to get started.

It is the only idea out there that can actually start to increase homeownership again. For the life of me, I cannot understand why National is not doing it already.

Since we will be building more houses, we would need more builders and more capacity in the construction sector.

Subsidising builders

That is why Labour will subsidise builders who take on apprenticeships, make getting a tertiary qualification easier with three years fees free, and help set up a pre-fab housing factory in Gisborne.

At the same time, Labour will lock the speculators out of the market to help first homebuyers get a look in.

Under our plan, we will ban foreign speculators from buying existing houses altogether, make speculators who flip houses within five years pay tax on their profits, and remove the tax loophole that helps speculators outbid young couples at auctions.

Plugging loopholes

That loophole means taxpayers subsidise speculators by $150 million a year.

We will put that money into home insulation and heating grants instead because we want all New Zealand homes to be warm, dry and healthy.

It is just common sense, practical stuff.

Now, the speculators are complaining and making threats, but I am not interested in stand-over tactics. The fact is that if they could increase rents, they would be doing it already.

We are not alone in this; the IMF and Reserve Bank reckons that the move will help cool the housing market.

Removing a tax loophole does not change the supply and demand for rentals.

But giving more Kiwis a chance to own their own home, and building more houses, will ease pressure in the rental market, and may even help bring rents down.

The question I have for people who defend the tax loophole is this: how can we, as a society, defend handing out subsidies to property speculators when most young couples can’t afford to buy their first home?

You ask me whose side I am on? It is families. It is first home buyers.

National U-Turn

And National? Well, they rubbished the tax change and now they have done a complete U-turn with a promise to build 34,000 homes – and that is after spending years attacking Labour’s house building programme.

What it boils down to is very little for first home buyers who need affordable homes.

Labour will build 50,000 affordable homes. National’s plan: just 4000.

Their plan is just not credible after nine years in office and four months out from the election.

All the conversations that I have had with Kiwis and all the communities that I have seen, have convinced me that housing is the biggest problem we face as a country. Dealing with it should be the government’s number one priority.

It just takes some leadership, some vision, and a plan.

Andrew Little is Leader of the Labour Party of New Zealand and Leader of the Opposition in Parliament.

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