Friday, March 21, 2014

The real barrier to fixing the housing crisis

Over on Radio Live, Duncan Garner reminds us of the real barrier to government action to fix the housing crisis: the vested interests of MPs:

There are millions of reasons why both National and, before them Labour, failed to do too much about housing: the free market is working very well for home-owning politicians thank-you very much.

This is not a conspiracy theory. I just want to point out how much property MPs from across the political spectrum own. It’s mind-blowing, actually. It shows just how good the investment is – if you can afford to get into the market! Sorry first home buyers!


So, check out the list. None of these MPs have a vested interest in a capital gains tax do they? None of these MPs want to get rid of foreign buyers do they? Why would they want the market slowed?

That list shows that 68 out of 121 MPs own more than one house (and Chris Tremain owns 20). They all have a strong financial interest in perpetuating the current housing shortage and market bubble. People going homeless? First-home buyers locked out of the market? Or society changing from one where most adults own their own home to one of tenants and landlords? They're directly profiting from all of those ills.

The most effective way to solve the housing crisis is though a government mass-building program to increase supply. Get young families into homes of their own, crush the landlords, improve the quality of our housing stock, and revitalise state housing into the bargain. But those 68 MPs aren't going to vote to destroy the value of their biggest assets, anymore than turkeys will vote for christmas. And so the people of New Zealand suffer, and our "leaders" grow rich off our suffering.