Speaker: What almost everyone is missing about KiwiBuild
38 Responses
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KiwiBuild gives the government the ability to use smaller and more compact houses to drive these larger urban moves that will make our cities more walkable, more affordable, more environmentally robust. If you disagree with these things, or the efficacy of this approach, then great, let's debate that ...
Government and urban designers need an ongoing communication campaign to explain what shape cities we are heading towards, and why.
Examples both local and overseas are great. Useful idiots in our media must be countered every time they promote the car and road-building industries.
The long lagtimes mean we must shift urgently now or climate change will strand many urban people in car-dependant sprawl (and who knows how our minority of rural dwellers will fare). I enjoy driving but it is not our future, and nor are acres of separated houses.
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WH,
Thanks for this. It’s good to see an explanation of how KiwiBuild is intended to make all housing more affordable. The discussion of state housing and KiwiBuild is helpful too.
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Thanks for this. I found another recent story about the Ockham developer quite illuminating on how this all really works because the connections between land / building costs and markets is not that obvious to most of us.
Why freeing up more land won't solve Auckland's housing crisis
In that story notes like this are explained and the need for a change to the formula (in part at least) which is what I'm taking from the Kiwibuild intervention policy.
"Greenfield developments like Hobsonville, says Todd, are part of the problem. "
The story goes on to make good points about housing density, shared spaces, better public infrastructure and the various tradeoffs to be had. If Kiwibuild can change the background equation on some of this by encouraging the market in a particular direction then we all benefit but it needs a long term perspective.
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Really helpful and well thought through piece- perfect for public address :-) I had thought of the overall downward pressure on prices more houses should create, but had not quire thought it through in the way you have addressed the "affordable house" issue. Good info on state house building as well. Thanks.
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Thanks for a really informative piece. Where I do think the Government deserves criticism is around the politics.
They’ve done a poor job at shaping the narrative. If as you say the plan has morphed somewhat since Shearer’s time, I bet most of the public wouldn’t know it. Whilst some of the opposition will be principled, some purely partisan, a lot is going to be driven by the disconnect between what Kiwibuild is in the Governments mind (and it seems in reality) and what people’s perceptions of it are. That’s what National is exploiting, and whilst many would oppose any market intervention on principle, I think much of the public would be onboard if they had a better sense of what you very clearly explained. -
Yes, we definately need encouragement to build smaller and more affordable homes. The market in Auckland has not done that - I had 8 years processing Land Use consents for Auckland Council and there were lots of houses being consented, but the majority of them in the North Shore area were at least 4 bedrooms and 5 or 6 bathrooms. They were basically "show off houses" for migrants and had no appeal (or affordability) for anybody else.
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Neil,
I think one issue Twyford isn’t willing to confront is that the building industry is not his friend.
One reason the cost of building is so high is that the industry is at best dysfunctional and at worst corrupt.
Handing out government money to take away risk for developers is not going to change the building industry for the better.
Most of the companies and people responsible for the poorly termed leaky building disaster are still around and still fleecing home buyers. Just trading under other names or company numbers.
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One does hope that under KiwiBuild that the Government ensures all compliance is met at every step of the way – The developers get the assurance of guaranteed sales while the public can be assured there will be no shonky corners cut.
Having said that I did get to visit the Takanini site a coupla weeks back (the day before the PM welcomed the first ballot winners to their new house – you know the ones Judith Collins saw fit to abuse on line) – I saw the new Coronation Street, terraces with no on-street/lane parking for visitors in the part I was in, the scale felt a tad off human, and on an old military base site I assume judging by street names (at least it wasn’t productive growing soil being built over).
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Early buyers might own these for 5 or 10 years, but these houses will provide access into the market for 50 or 100 years.
I can't help thinking this is the cruncher. "Access to the market" is one description. "Onto the property ladder" is another. The ladder seems to be the cause of all this strife. The haves (working poor) are keen (desperate) to sell (buy) so that they can move to a house that will increase in value over the shortest period possible. It all ratchets up. Dare I say there was once a time when folk "made the money" to buy the next rung? Now it is how much will the bank dosh out to get me 3 rungs up. The devil takes the hindmost. We all lose.
I'm happy to impose the CGT to halt this madness for future generations. Unfortunately there will be losers. But is it likely there will be many winners?
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Neil,
Construction sector 'house of cards': Corbel Construction failure tip of iceberg
This is the biggest threat to Labour’s housing policy. The building industry is seriously dysfunctional and sadly corrupt.
Twyford thinks the building industry is his friend, he should quickly come to terms with the fact it is not.
He also needs to urgently address the huge failings in current legislation regarding apartment building management and ownership. Otherwise people will get put off apartments and intensification will be that much harder.
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Neil,
The directors of theses failed building companies quickly go on to work for other building companies.
Constructing houses in NZ is horrendously more expensive than in other countries. And yet these companies go bust.
Where do the profits from these exorbitant costs go and why aren’t people being held accountable and why is Labour seemingly so disinterested.
Perhaps it’s a bit like how the fishing industry works with Winston Peters.
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Neil,
Well I’ve just seen this. Twyford wanted to lessen the penalty for flipping Kiwibuild homes on for a profit.
Didn’t discuss it with the PM but did discus it with – Shane Jones.
Industry influence, pretty obvious.
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Sacha, in reply to
That is the angle of a single media story with plenty of reckons but little evidence.
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Neil, in reply to
Twyford chooses to discuss his lowering the penalty for making a profit out of KiwiBuild with king of boondoggles Shane Jones rather than with the PM.
The PM doesn’t appear impressed.
All in the context of quite a few people trying to tell Twyford the building industry is dysfunctional and corrupt. But he’s got his fingers in ears. Maybe he’s just stupid, maybe he stands to gain somewhere along the line in his post politics life. Not unheard of.
We know the relationship between NZF and the pillaging fishing industry. Companies like Fletchers won’t be complaining about govt money helping solve their financial problems.
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Neil,
And why is Twyford deliberately dragging his feet over making changes to apartment building governance laws which currently allow ruthless management companies such as Centurion to make life a misery for people who buy apartments. Look up who controls Centurion if you don’t already know.
Intensification has to have a sound legal basis or intensification will just feed exploiters. At present it doesn’t.
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Sacha, in reply to
The PM doesn’t appear impressed
So the reporters tell us. No actual evidence of that, but hey.
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Sacha, in reply to
And why is Twyford deliberately dragging his feet over making changes to apartment building governance laws
Good question. Seen no valid answer from him yet.
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Neil,
The government has finally had to admit what has been obvious for a while – their housing policy is not working.
The biggest problem is the building industry itself which is at best dysfunctional and at worst corrupt. Throwing money at it is only going to benefit the unscrupulous, not first home buyers.
Many people tried to bring this to the attention of Twyford but he chose to ignore it. Hopefully he’ll be replaced. Has anyone heard of the Minister for Construction recently? Seems a bad time to be MIA.
One thing a new minister could do with some alacrity is overhaul the laws governing apartment ownership. Nikki Kaye has already done most of the work on this. It’s hard to overstate how critical that is for successful intensification.
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Sacha, in reply to
KiwiBuild is not the whole of the govt's housing policy. Their fault for letting that impression take hold however.
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BenWilson, in reply to
The biggest problem is the building industry itself which is at best dysfunctional and at worst corrupt. Throwing money at it is only going to benefit the unscrupulous, not first home buyers.
I'd say that the problem is well beyond one bogey, even though you are right that construction of housing in NZ costs more than it should. The goals that were initially set seemed basically fantastical to me. Now they have a much better idea of what is achievable, and since it isn't hundreds of thousands, it's not even in the thousands, I can't see it having very much impact on the overall housing problem here.
So much for the supply side, I really did think it was a pipe dream to think supply could be ramped up the several orders of magnitude required - the cost of doing so is huge. Good on them for trying, sometimes you have to prove the obvious.
Controlling demand is a much less costly thing, probably, requiring only legislation and enforcement, rather than paying hundreds of thousands of people and buying tens of billions in materials. Essentially restricting who can buy puts an instant damp on prices. It doesn't necessarily do the whole job, because nothing can do the whole job - this is still a whole economy problem.
There are other levers to alleviate the effect of the housing crisis too, namely making sure people have enough to pay rent with, making sure that what is rented is up to standard, etc. This problem was decades in the making and it will be at least decades in the unwinding, particularly if National rolls everything back the moment they get back in power.
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andin, in reply to
to benefit the unscrupulous
Who that is is answered in the first link in the post, the developers.Their days are numbered now.
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Neil,
These problem buildings are still being built after 30 years. Still ruining peoples’ lives and will ruin a lot more peoples’ lives as the true extent of the dysfunction and corruption within the building industry and councils is slowly revealed.
What makes it even worse are the current laws dealing with apartment ownership which empower dishonest property management companies and make life even more traumatic for apartment owners.
Intensification is not going to work if these issues are not addressed.
Twyford has been made aware of this and chosen to do nothing about it. A new minister who listens is desperately needed.
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What do you think a Housing Minister can do about "corruption in the building industry" -- by which you mean what, e.g. development, construction, regulation? -- or for that matter, a systematic shortage of trained tradespeople and regulators? Agreed they shouldn't promise any short-term solution where none is possible, but these are problems whose solutions have to outlast the electoral cycle.
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Neil, in reply to
By corruption I mean Corruption.
And that will be just the tip of the iceberg. More will follow.
What I expect a minister to do is to confront this rather than ignoring it.
What I expect a minister to do is reform the apartment governance laws that leave apartment owners at the mercy of corrupt management companies.
But I’m not surprised someone who tried to blame people with Chinese sounding names is incapable of dealing with the actual problems in the building sector.
And as I’ve said before - it’s not like there weren’t people trying to get the minister to pay attention.
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Neil,
I’ll hammer on again about the apartment issue as it’s a tsunami of pain heading our way soon and people considering buying an apartment should be very cautious.
1. NZ does not have a great deal of experience with apartment management and that shows in the the complete unfitness of the Unit Titles Act to provide for equitable and sustainable management of apartment buildings.
2. Apartment buildings that were not originally defective are becoming defective because of 1. above. Management companies are scrimping on building maintenance and not informing owners of the consequences.
3. Defective apartment buildings are still being built and developers are knowingly selling to unsuspecting buyers. That’s all on top of the 90% of previously build defective buildings that various parties are keeping quite about. Only 10% of defective buildings have been officially identified – but councils, developers and insurance companies certainly know there’s that tsunami of 90% looming over the horizon.
4. Ruthless people are able to sell defective apartments to unsuspecting buyers because current laws do not ensure that a buyer can get full disclosure from a Body Corp or management company about the true state of a building.
5. If you’re in central Auckland and look in any direction along your line of sight there will be at least one defective building.
There’s a few scoops there waiting for some journalist to pluck.
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