September 05, 2019

Another Leftist housing scheme fails

Leftist governments are always pledging to "solve" the housing shortage and build lots of "affordable" housing.  It is always a fiasco, with little housing built and virtually none of it affordable.  The latest example below.

Why are the Left so clueless about housing?  There was even a drastic shortage of it in the old Soviet Union, where they had their hands on all the levers.

It's because housing is intrinsically expensive so cost minimization is vital.  And only private enterprise can cut costs to the bone.  Once government gets involved everybody relaxes and does everything the bureaucratic way, which is slow, inefficient and costly.  Time is money -- but not to bureaucrats

And all sorts of Leftist policies add to the costs -- environmental and safety mandates for a start. Leftist governments CREATE high costs for housing. It is only where government mandates and regulations are minimized that costs can be slashed. It's the difference in regulations that makes housing in Texas half the price of housing in California

See also here for how NIMBYs use the laws to keep housing prices up

The New Zealand government has performed a spectacular mea culpa on one of Labour's signature election policies, walking away from a pledge to build 100,000 affordable new homes within a decade.

Prime Minister Jacinda Ardern's government insists their commitment to low-cost housing remains, announcing on Wednesday a raft of changes to their "KiwiBuild" policy suite.

"KiwiBuild isn't working so we are changing it," Housing Minister Megan Woods said. "As a government, we have a commitment to not bloody-mindedly pursuing a policy because we said it a few years ago. "We're actually having the courage to call time on it, say it hasn't worked, and make the necessary changes. "When policies aren't working we are honest about that and fix them."

KiwiBuild is one of the Ardern government's flagship policies, and the prime minister is hopeful that today's "KiwiBuild reset", first announced in January, will change the course of the ailing $2 billion housing programme.

The ambitious goal-setting and spending, in partnership with developers, was aimed at helping first homebuyers crack the property market - as well as providing an economic stimulus and apprenticeships.

One year into the planned decade of house-building, just 141 houses had been constructed, well short of the first benchmark of 1,000

Targets of 5,000 by June 2020 and 10,000 by June 2021 have now been discarded.

"When I lifted up the hood and had a look at what was happening with Kiwibuild, the targets were providing some perverse outcomes," Ms Woods said. That included unsold properties and developers ignoring the needs of larger families.

Opposition Housing spokesperson Judith Collins lashed the changes as "a massive retreat".

While Ms Ardern embraced the KiwiBuild policy, the plan preceded her leadership by five years; first announced in 2012 by then-leader David Shearer.

Four Labour leaders and two elections later, Ms Ardern found herself in the position to implement it after building a coalition government with NZ First and the Greens.

Her first Housing Minister, Phil Twyford, was moved on from the role in June, leaving Ms Woods with the patch-up job.

Other changes announced on Wednesday include a reduction of the deposit needed for a government-backed mortgage and a requirement for small home buyers to live in those properties for just one year.

The Greens have also succeeded in shifting $NZ400 million of KiwiBuild funding into a progressive home ownership scheme.

SOURCE





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