Monday, April 21, 2008

Two birds with one stone

The Sunday Star-Times reports that the end of the housing boom could see 38,000 people lose their jobs, as real-estate agents struggle for sales and the construction industry stops building houses. Meanwhile, we have a housing crisis (both of affordability for those seeking to buy, and of availability for those seeking public housing), and one which is primarily driven by a lack of supply at the bottom end of the market. This offers a perfect chance to kill two birds with one stone. Last century, the First Labour Government ran a mass-building programme for state housing. Not only did this ensure everyone had access to decent housing; it also saw an entire generation of kiwis owning their own home, while boosting employment and lifting the quality of the housing stock. We could do it again. The government could leverage its access to cheap credit and its market power as a bulk buyer to both rebuild the state housing stock after the rundown of the 90's, and to produce the affordable housing the market is simply not interested in providing. And as in the 30's and 40's, it would neatly keep that part of the economy ticking over, while promoting social goals. But that, I suppose, would be "socialism".