Thursday, January 24, 2013

The Greens' housing policy

Late last year, Labour released their housing policy: build 100,000 affordable homes over ten years to solve the housing crisis, boost employment and skills, and kickstart the economy in one go. It was a good policy, and it will help a lot, but now the Greens have gone one better, with a push for a progressive ownership scheme [PDF]. Under the Greens' plan, not only would the government be building the houses - they'd effectively be providing the mortgages on them as well, using their access to cheap credit to help get people into their own homes.

Its an excellent idea, which neatly complements Labour's policy, while making it much more accessible. People on low incomes won't be able to access the commercial mortgages Labour is relying on. But they will be able to access the progressive ownership scheme at some level and start building up equity. And because they can cash out if they move, its also effectively a low-transaction-cost fully insured savings scheme as well.

There are two components to the housing crisis: a crisis of supply in affordable homes, driven by the market's refusal to provide them (they're not profitable enough, you see); and a crisis of incomes, driven by 25 years of NeoLiberalism. KiwiBuild addresses the first. This addresses the second. National's proposal - gut the RMA and remove planning restrictions to free up land so developers can build more unaffordable homes - doesn't address either.