Government's new social housing plan slammed by opposition MPs

LATEST: Construction professor doubts industry can cope with 34,000 state house plan

The government will build 34,000 homes in Auckland over the next 10 years, Social Housing Minister Amy Adams says.

But opposition political parties have been quick to rubbish the government’s plans, with the Greens and Labour saying it’s too little, too late.

Ms Adams says the Crown Building Project will replace 8300 older, rundown houses in Auckland with the new, “purpose-built houses” – more than 24,000 of which will be built by Housing NZ (HNZ).

In total, the project will see the construction of 13,500 new social houses and 20,600 new “affordable and market homes.”

Ms Adams says the scale of the build is equivalent to three and a half new houses on every street across Auckland and the new houses are a substantial redevelopment and construction programme on a scale not seen since the 1950s.

The pre-government budget, election-year announcement also reflects growing concern among government ministers that high immigration into Auckland is exacerbating house prices and shortages, and that the combination of the two issues is threatening its re-election prospects.

Labour has a long-standing KiwiBuild policy to build 100,000 affordable houses over 10 years over the whole country, with a heavy bias toward Auckland.

Labour leader Andrew Little also announced a crackdown policy, under a Labour-led government, on the negative gearing tax treatment, which allows landlords to offset losses on rental properties against income tax owed on their other income.

Opposition rubbishes proposal
Green Party co-leader James Shaw says although it’s good the government has “finally got the message it has to start building houses,” it’s still too little, too late.

“Auckland is already 40,000 homes short and it needs 15,000 a year just to keep up with population growth,” Mr Shaw says.

He says it’s just another example of a “big headline that does not actually fix the problem but makes [the government look good.]”

Mr Little issued a statement not long after the government’s announcement, mocking its slow response to the housing crisis.

“Breaking news: National admits there’s a housing crisis,” the headline read.

Mr Little says the government’s response was not just belated but simply “not a credible response.”

“National can’t now credibly claim to be tackling the housing crisis four months out from the election when, for nine years, they’ve ignored the plight of first home buyers and families in need.”

He says this is just a last minute, “cynical” announcement and “an election year fudge to paper over the cracks of its failure in housing.”

New Zealand First leader Winston Peters also blasted the government for not building enough houses sooner, saying they are being "found out daily for the incompetent managers they are."

Even National's coalition partner is sideswiping the building plans.

ACT leader David Seymour says the policy will add nowhere near enough homes in Auckland. 

But the Property Institute has welcomed the government's housing project plans.

Chief executive Ashley Church says the initiative will go a long way toward addressing the supply issue in the city.

"We don't need yet more measures to try to curb demand or penalise buyers – we just need to build as many houses as we can, as quickly as possible."

The details

Phase one of the newly announced Auckland Housing Programme, which covers the next four years, will cost $2.23 billion and will be funded through Housing NZ’s balance sheet and new borrowing of $1.1 billion that the government has approved as part of the business case.

“Phase two in the later years will be funded through the market housing development part of the programme and rental returns,” Ms Adams says.

Ms Adams says the government is confident the timeframe it has for the build is the fastest possible time it can realistically build the houses in.

She says the government has had to be mindful of many things, including the Unitary Plan and Auckland Council’s infrastructure requirements.

“All of those things have to come together.  If we could wave a magic wand and all of that is done and the houses would be built, of course that would be ideal.”

The new houses will be built in places such as Northcote – where 300 existing homes will be redeveloped to roughly 1200 – and at Hobsonville Point.

Yesterday, Prime Minister Bill English said the project was “essentially the next stage of the plans for the very large government-owned housing estate.”

He said the government owns land that has 27,000 houses on it in Auckland.

“There is room under the Auckland Unitary Plan to build 60,000 houses on that land and the government won’t need them all.”

Today’s announcement follows a range of other social housing initiatives undertaken by the government.

The government injected $300 million into emergency housing in November last year, which included $120 million to build, buy or lease properties suitable for emergency housing – $100 million of this will be as a loan to Housing NZ.

Earlier this month Ms Adams revealed Hamilton would get 43 new two-bedroom houses, to be built by the end of July.

In April, Ms Adams told the Otago Daily Times the Ministry of Social Development would increase the social housing stock in Dunedin by 40 within the next three years.

Meanwhile, the Social Housing Quarterly Report, released in late March, revealed the number of people who were waiting for a house rose to 4865 – up from 4771.

But Ms Adams pointed out the average wait time for a house had fallen from 115 days to 107.

Earlier today, AUT construction management professor John Tookey said no matter how much land was made available, developers would only ever drip-feed properties on to the market, to maintain prices. Therefore, one of the few ways for the government to meaningfully address the shortage of homes available in Auckland was to boost the number of state houses (he also suggests stick and carrot tax changes).

Auckland Council statistics show about 7200 residences were built last year. The Unitary Plan says around 14,000 a year need to be built every year for the next 30 years to match projected population increase.

Additional reporting by BusinessDesk.