Monday, May 21, 2018

Why is Labour building houses for the rich?

KiwiBuild - the promise to squash the housing bubble by building 100,000 new affordable homes - is Labour's core policy for this term. Pretty obviously, if they do that, it will help get more people into their own homes, rather than paying rent to some landleech. But when it comes to implementation, Labour is quite happy to sell those houses to the rich:

People wanting to buy one of the Government's affordably priced homes will not be income-tested.

That means high-income earners will not be blocked from purchasing one of the 100,000 planned houses to be built over 10 years, which will be priced at up to $650,000.

Housing Minister Phil Twyford said the criteria for prospective buyers in the KiwiBuild scheme were still being developed.

It is already known that the houses will be limited to first home-buyers and permanent residents.

But it is understood that income caps will not be used for the scheme.

Not applying income caps will mean that the wealthy are free to bid up the price and continue the bubble. It also raises the prospect of those houses ending up in the property portfolios of landlords and speculators rather than improving home ownership rates. And when we have a crisis caused in part by the wealthy hoarding houses, letting them do more of the same just seems foolish.

But its also inconsistent with the values Labour is purporting to represent to voters. They're supposed to stand for ordinary kiwis, not the wealthy. So why are they building houses for the latter?