Labour’s flagship housing policy KiwiBuild was announced in 2012 to much fanfare. It was going to solve New Zealand’s housing woes.
Labour had promised it would build 10,000 homes a year by the end of its first term. This was a big promise considering when Labour was last in Government it promised to build 1,600 houses in Hobsonville over six years. Not only were they never built, Labour never even got as far as gaining consents.
Labour first announced KiwiBuild six years ago when it was in Opposition. Since becoming the Government, Minister of Housing Phil Twyford has consistently walked back the scheme as its popularity plummeted.
Last month one of the first ballots for a KiwiBuild home had to be extended. That’s because the policy hasn’t been thought through. Some houses in the development had received no bids at all.
The Minister has been so focused on announcing KiwiBuild developments to give his scheme some credibility that he hasn’t checked whether the demand exists for properties with two-bedrooms at the price point he has set.
Mr Twyford isn’t listening to New Zealanders. Eighty per cent of Kiwis who have registered for KiwiBuild want a three or four-bedroom home.
There is a risk that fixing prices through a ballot will create lottery winners by selling the house below market price, or the Government will be forced to underwrite houses it can’t sell. This looks likely considering the price for a KiwiBuild home continues to climb.
Officials have estimated that a first home buyer household would need to be earning $114,000 a year to purchase a $500,000 KiwiBuild house, but the median household income is $25,000 less than this.
Mr Twyford has been forced to admit what these numbers show, the scheme isn’t for low income families.
But this has only happened after the Government created an expectation that hundreds of thousands of New Zealanders are going to get access to a Government provided home, which is simply not going to happen.
KiwiBuild has become an untargeted lottery costing billions of taxpayers’ dollars but isn’t making a difference to the lives of those who need it most.
National is committed to helping more New Zealanders into houses, but government support should be targeted at those who need it most and it should come with an obligation for people to help themselves.
Labour has had nine years in Opposition to come up with a comprehensive housing policy. If it had put the work in then, then maybe its housing policy would be vastly different.
Instead Labour has argued it is offering housing support to Kiwis on a range of incomes, but in reality the only people who can access that support are those on a middle to high income.
National’s plan was better. By increasing the overall supply of housing in general, first-home buyers on a low income could use the KiwiSaver, HomeStart and Welcome Home Loan schemes to get a deposit together and buy their first home.
Mr Twyford’s KiwiBuild policy is on life support. It’s never been properly thought through and it’s struggling to stay afloat.