"It is not a programme aimed at low-income families because they may not be able to service a KiwiBuild mortgage" - Phil Twyford. Photo by Phil Walter/Getty Images

Housing crisis reality overshadows Labour’s KiwiBuild dream

Housing was in the news this week, and there was a striking indication of where the Ardern-led government’s focus lies, writes Guyon Espiner of RNZ

There were two big housing stories this week, two quite different approaches to them and one clear signal where the government’s focus lies.

The first was a government generated “media opportunity” aiming to set the news agenda for the week and catch the after-glow of the mostly complimentary “year in review” stories.

Prime Minister Jacinda Ardern and Housing Minister Phil Twyford welcomed 18 families into KiwiBuild homes in Auckland’s Papakura.

Yes, that leaves 99,982 more homes to meet the promise over a decade. But no matter. This, we were told, was cause for celebration. It was history.

The prime minister invoked Michael Joseph Savage and the first Labour government’s state housing policy. “I won’t be carrying a coffee table today,” she said, with a nod to the famous photo of Savage opening the first state house at 12 Fife Lane in Wellington in 1937.

Instead Jacinda Ardern carried a Mandarin tree, a Chinese symbol of abundance. The couple who got the house said they felt like they had won Lotto.

There’s no need to name them here. They were simply taking what was on offer and have already received grief on social media for their involvement in the government’s media event.

But the circumstances make for an interesting historical comparison and also an indication of what the policy may deliver in the future.

At 12 Fife Lane, Miramar in 1937, the first tenants of the first state house were David and Mary McGregor (inconveniently for Labour’s narrative they didn’t buy the house until National introduced measures allowing state tenants to do so in the 1950s).

David McGregor was a tram driver for the Wellington City Council, earning less than five pounds a week.

Fast forward to KiwiBuild 2018 and among the first buyers are a doctor and her marketing manager partner in their mid-20s. The couple got the four-bedroom home for $650,000, a good price in an Auckland market which has flattened out but at a median of $810,000.

To qualify for a KiwiBuild home a couple can earn up to $180,000 – nearly double the average household income.

Is this what KiwiBuild is about? Well, yes apparently. This week Phil Twyford disabused anyone still under the illusion KiwiBuild was for low income earners.

“It is not a programme aimed at low-income families because they may not be able to service a KiwiBuild mortgage,” he said. He went on to say that a shared equity scheme was being developed for low income earners and more state houses were being built too.

But when you talk about a housing crisis and helping people into homes are you thinking of couples in their mid-20s with an income approaching $200,000?

Ricardo Menedez of Auckland Action Against Poverty isn’t. “Facepalming my way into oblivion at just how much of a failure Labour’s housing plan is,” he wrote on Twitter. “You can’t find your way out of the housing crisis by building private homes for high income earners.”

You also can’t accuse the government of doing nothing for low income earners. Its Families Package lifted incomes for 384,000 families. But two of its big policies – free tertiary fees and KiwiBuild – seem to give big benefits to the upwardly mobile.

Stats NZ data released in October showed that “the highest spending households saw the lowest inflation” in the three months to September. One of the reasons for this was free university fees. “The decrease in tertiary education (spending) resulting from the government’s fee-free first-year policy … was reflected most in the highest-spending households,” according to Statistics New Zealand.

It was the lowest spending households who featured in the other big housing story of the week.

RNZ’s Checkpoint revealed compensation due to state house tenants wrongly evicted under the dodgy meth testing regime is being delayed because the money could affect their welfare payments.

Auckland Action Against Poverty spoke out on this too, saying it was “cruel” to leave people hurt by the evictions in a bureaucratic money-go-round and that the snag should have been spotted early and averted.

Again it was the prime minister and housing minister fronting the issue, this time on Morning Report. Mr Twyford said he only realised last week the move would require a regulation change. Ms Ardern said she hoped they would get their money before Christmas.

This article originally appeared at RNZ


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