The Post: Housing – and the unhoused - left out in the cold

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In this week’s Budget, housing was the dog that didn’t bark.

Initial analyses of Budgets focus on what was in them. As the dust settles, it becomes clearer what wasn’t. And housing wasn’t, to an extraordinary degree.

One rough measure of a government’s Budget Day priorities is what it deems worthy of a press release. Housing didn’t get one. Its only overt mention, in fact, was one line in a press release on infrastructure.

It’s a deeply unimpressive line, too: $140m to fund the running costs of 500 new social houses a year, built by NGOs. That’s it.

It’s not entirely unreasonable for the government to divert that funding from first-home-buyer grants, as trailed last week, since the latter tend to push up house prices. But the Budget pledge remains an oddly inadequate move at a time when we have 25,000 families on the waiting list for a state home, and housing is a colossal political issue.

Meanwhile, the Budget predicts rents will keep rising at a remarkable clip. Seems like very little of that $2.9bn landlord tax cut will trickle down to tenants.

When quizzed at the Budget press conference, the housing minister, Chris Bishop, insisted he had a clear long-term plan for private house-building, at least. He will, in theory, require councils to zone enough land for 30 years’ worth of construction.

This may have merit – but equally councils may find ways around it, or there may be other issues blocking development, such as a lack of infrastructure. And it feels like a policy for a few years hence, when we have a housing crisis right now.

Many of the government’s actions to date are intensifying that crisis. National has thrown into doubt both the state house-building programme run by the homes and communities agency, Kāinga Ora, and the social house-building programme run by NGOs. Both provide housing where rents are set at a quarter of tenants’ incomes.

Recent news bulletins have been filled with reports of Kāinga Ora freezing developments and NGOs mothballing plans. That’s partly because of National’s unwillingness to guarantee them funding (although the Budget fractionally improves that situation).

Recall that Jacinda Ardern’s government took a Key-era set-up that was selling more state houses than it built, and turned it into one that delivered 2000 social houses a year, albeit some were purchased from the private market. Not everything Labour did was perfect, but it built real momentum. That momentum is in severe danger of being lost.

Bishop’s other key step has been to commission a review of Kāinga Ora led by Bill English, his former boss. The English review’s claims were always suspect, given they made so much of Kāinga Ora’s debt being “unsustainable”.

This debt is, in fact, money spent to create assets: housing for the poor, one of the greatest investments this nation could conceivably make. It doesn’t generate an immediate cash return, but that’s not the point. Nor do libraries, hospitals and schools.

The reputation of the English review, what’s more, has been badly tarnished by the revelation this week that it contained basic errors of fact, did not attempt to corroborate anecdotes, and largely ignored the Kāinga Ora board when it pointed out these problems.

Of course Bishop is entitled to take a different approach to his predecessors. Even good, socially minded developers report finding it difficult to work with Kāinga Ora. A genuinely independent review of the agency’s costs and quality standards could do no harm. But the responsible thing would have been for Bishop to gradually introduce improvements, while ensuring existing developments aren’t damaged.

This matters all the more when, as the Budget shows, housing consents have fallen catastrophically, following interest-rate hikes. A responsible government would be stepping in, ensuring the state’s demand keeps house-building going while private developments struggle. Instead we have the state virtually vacating the field, and a short-term collapse in affordable house-building.

This is all the more egregious given National’s promises in Opposition. Bishop told RNZ last year that National would “build enough state and social housing” to clear the state-house waiting list, which, then as now, sat at around 25,000. Also last year, Nicola Willis, as National’s finance spokesperson, promised 1000 new state houses every year in Auckland alone.

Unless Bishola, as the two are sometimes known, can magic up those homes from somewhere, they are going to be guilty of broken promises. Alan Johnson, one of the housing market’s most experienced analysts, warned this week of a likely increase in “homelessness in the streets and cars and carparks of the country”.

The “hatchet job” on Kāinga Ora, he predicted, would be followed by “the panic button being pushed”, as National came face to face with the slowdown it had engineered. “I think,” Johnson added, “the government will come into the next election lamenting its lack of interest in social housing.” There will, indisputably, be something to lament.