Monday, November 03, 2014

A policy that makes no sense

New Zealand has a housing crisis. Not in terms of middle class people being unable to buy their own home - though that's a big problem too - but in terms of some people being unable to afford to put a roof over their heads.

The government's "solution" to this problem has been to make it more difficult to get a state house. And now they plan to sell up to a third of our state housing stock to private providers at bargain basement prices.

The Prime Minister's word-games over whether or not this is a privatization isn't even worth a sneer - of course it is (and the usual corrupt one at that). But the real failure of the policy is that it simply doesn't make any sense. The problem is a lack of state houses. Reducing their number, even if they then become privately-provided subsidised housing, will not solve that fundamental problem. It is simply shuffling deckchairs.

We need to significantly increase the number of state houses. The best way to do it is for the government to build them directly, leveraging its size to get economies of scale. But if the government wants to increase provision by councils and iwi, then rather than selling an existing asset to them, it should transparently subsidise those organisations to build more. That way we actually increase the number, rather than simply shifting houses from one column to another, and it also lets us use the funding contract to prevent resales or the council or iwi deciding that they want to exit social housing provision. But that would involve recognising the government's fundamental duty to provide homes for the needy - and its pretty clear from National's comments that they don't accept our social contract anymore.