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		<title>Bryce Edwards&#8217; Political Roundup: Labour&#8217;s KiwiBuild reset disaster</title>
		<link>https://eveningreport.nz/2019/09/05/bryce-edwards-political-roundup-labours-kiwibuild-reset-disaster/</link>
		
		<dc:creator><![CDATA[Bryce Edwards]]></dc:creator>
		<pubDate>Thu, 05 Sep 2019 01:47:08 +0000</pubDate>
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		<guid isPermaLink="false">https://eveningreport.nz/?p=27232</guid>

					<description><![CDATA[The Government has been widely panned over its major announcement yesterday on housing. There are a few positive takes on the &#8220;reset&#8221;, but generally it has been viewed as an embarrassing backdown at best, or at worst a sell-out of those needing the housing crisis addressed. One political journalist has even branded yesterday&#8217;s announcement as ]]></description>
										<content:encoded><![CDATA[<figure id="attachment_13636" aria-describedby="caption-attachment-13636" style="width: 300px" class="wp-caption alignleft"><a href="https://eveningreport.nz/2019/04/28/bryce-edwards-political-roundup-simon-bridges-destabilised-leadership/bryce-edwards-1-2/" rel="attachment wp-att-13636"><img fetchpriority="high" decoding="async" class="size-medium wp-image-13636" src="https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-1-300x300.jpeg" alt="" width="300" height="300" srcset="https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-1-300x300.jpeg 300w, https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-1-150x150.jpeg 150w, https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-1-65x65.jpeg 65w, https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-1.jpeg 400w" sizes="(max-width: 300px) 100vw, 300px" /></a><figcaption id="caption-attachment-13636" class="wp-caption-text">Dr Bryce Edwards</figcaption></figure>
<p class="null"><strong>The Government has been widely panned over its major announcement yesterday on housing. There are a few positive takes on the &#8220;reset&#8221;, but generally it has been viewed as an embarrassing backdown at best, or at worst a sell-out of those needing the housing crisis addressed. One political journalist has even branded yesterday&#8217;s announcement as &#8220;easily the worst day politically&#8221; for the Labour-led Government so far.</strong></p>
<p>This criticism isn&#8217;t just politicking from conservatives or the right. The most severe criticism has come from progressives and the left. This isn&#8217;t really surprising because – as with Jacinda Ardern&#8217;s capitulation on the capital gains tax – the announcement suggests the Government has essentially given up on bringing transformational change to the housing crisis. Many of those who might be sympathetic or supportive of the Government are those most deeply disappointed with what Housing Minister Megan Woods is now doing with KiwiBuild.</p>
<p>To get an idea of critical reaction from the political left, it&#8217;s worth reading the No Right Turn blogpost: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=230774bf68&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Not impressed</a>. He calls the reset a &#8220;broken promise&#8221; and is disappointing about the tinkering announcements, suggesting they might actually make the housing crisis worse.</p>
<p>He concludes that the reset shows Labour, as with other political parties, simply isn&#8217;t interested in solving the housing problem: &#8220;while the obvious policy we need is a mass house-building programme of state and affordable homes, to crash both house prices and rents, the property owning class – which includes almost every MP – don&#8217;t want that, because it would devalue their assets and their landleach income-streams. So instead we get this sort of bullshit, spending billions on producing the impression of action, while actually doing nothing much&#8221;.</p>
<p>It&#8217;s not only leftwing bloggers who are unimpressed. For a scathing assessment of yesterday&#8217;s announcement see Newsroom editor Bernard Hickey&#8217;s latest column, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=9a8bdcb200&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Young renters just got double toasted</a>, in which he argues those suffering from the housing crisis have now been abandoned by this government.</p>
<p>Hickey argues that the jettisoning of the basic KiwiBuild promise was entirely unnecessary: &#8220;to abandon the entire target for the entire 10 years is simply silly because the first year&#8217;s target was missed. Urgent and large scale action by the Government could have cleared the way for a 100,000 house build over the next 10 years. Labour just gave up at the first hint of trouble&#8221;.</p>
<p>As to all the minor announcements made yesterday, Hickey thinks they&#8217;re a &#8220;distraction&#8221; meant to help sell the capitulation to the public: &#8220;It also tried to dress the broken promise by making it easier to use more KiwiSaver money for home deposits and to be able to borrow more to buy a first home. Neither will sweeten this dead rat much. It&#8217;s more of a rotting and hairy cat.&#8221;</p>
<p>Hickey says the conclusion we can draw from the KiwiBuild reset is that Ardern&#8217;s reputation is now settled, and it goes to &#8220;prove she is just another transactional smile-and-wave politician who believes she is better at wielding the status quo than the other lot. She has now forfeited any right she had to talk about being transformational and claiming ownership of a generation&#8217;s dream.&#8221;</p>
<p>Similarly, in an opinion piece for RNZ, I&#8217;ve argued that Labour and its coalition partners now risk losing support from their core supporters who were relying on seeing real progress on the housing crisis, and those struggling with housing might legitimately feel &#8220;ripped off&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=6edb546a3d&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Government should be held to their 100,000 KiwiBuild promise</a>.</p>
<p>Here&#8217;s my conclusion: &#8220;much like the CGT backdown – the government&#8217;s other key policy to deal with the housing crisis – it will shake the confidence of supporters who are wanting to see the transformational change promised. The Year of Delivery becomes an empty slogan for those depending on real change. When it comes to next year&#8217;s election, the governing parties might find their lack of courage leads to fewer of their supporters being mobilised to vote&#8230; Having won power in 2017 on the basis of promises like KiwiBuild, it would be apt if the Labour-led government lost that power in 2020 because of their failure to deliver.&#8221;</p>
<p>RNZ&#8217;s Tim Watkin points out that this failure of delivery and ambition is what Labour used to criticise the last National Government for: &#8220;Twyford was famous for mocking previous Minister Nick Smith by saying &#8216;you can&#8217;t live in a consent&#8217;. Truth is, you can&#8217;t live in a reset either&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=90f8b019d1&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">You can&#8217;t live in a reset</a>.</p>
<p>Watkin labels yesterday&#8217;s announcement a &#8220;disaster&#8221;, saying &#8220;amidst the announcements came the smell of burning rubber as the government preformed some of the biggest political u-turns you&#8217;ve ever seen.&#8221; Green co-leader Marama Davidson was also at the announcement, claiming the KiwiBuild reset put housing &#8220;back within the realm of lower income people&#8221;, but Watkin says &#8220;It&#8217;s hard to see how.&#8221;</p>
<p>Political journalists have also been damning in their reports. Henry Cooke, who has probably written more on KiwiBuild than any other journalist in recent years, says: &#8220;KiwiBuild is now a shadow of the huge promise it once was&#8221; and that the reset was a &#8220;serious humiliation for the Government&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=3ca506828e&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild emerges from nine months in the shop a shadow of its former self</a>.</p>
<p>He disputes many of the claims of the Housing Minister. For example, on the notion that the Government is still delivering a significant house ownership programme, he says: &#8220;that&#8217;s like selling someone a car and delivering a scooter. They both serve the same purpose, but the product is not what was said on the tin.&#8221;</p>
<p>As to Megan Woods&#8217; new mantra that &#8220;KiwiBuild is a lever, not an outcome&#8221;, Cooke says: &#8220;That&#8217;s fine and good if you&#8217;re looking at the housing market from the perspective of a minister, but if you&#8217;re a young buyer who thought with 100,000 homes there was sure to be one for you in the mix, KiwiBuild sure as hell was the outcome, and an outcome you wanted. Bad luck.&#8221;</p>
<p>Cooke also outlines how the Government is failing to deliver in other areas of housing. And some of the new announcements seem half-baked at this stage – for example, &#8220;the fact this progressive home ownership plan has still not gone to Cabinet beggars belief.&#8221; And he says that the changes to eligibility will not &#8220;change the problems with KiwiBuild thus far.&#8221;</p>
<p>As to cancelling the 100,000 house target, and the refusal to replace it with anything new, Cooke says: &#8220;Every Government breaks promises made during elections. But few break ones this big and this specific.&#8221;</p>
<p>This broken promise will come to haunt Labour in the future, according to Claire Trevett: &#8220;it has given Labour a credibility problem. This will cause Labour problems in future elections when they put up similarly ambitious policies. Ambitious is a kind way of saying unbelievable. It gives voters greater cause to doubt whether they can actually deliver. It has, in short, become Labour&#8217;s folly&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=8d12e6d359&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">The lesson of KiwiBuild, the Little Engine that couldn&#8217;t</a> (paywalled).</p>
<p>The failure to adopt a new target is also a problem for accountability she says: &#8220;The 100,000 figure was replaced by the rather more nebulous &#8216;as many homes as we can&#8217;. That is far less pithy – but also much harder to hold the Government to account for.&#8221;</p>
<p>This nebulous promise is highlighted by Herald political editor Audrey Young who says: &#8220;It is not a line that would be acceptable in many other policy areas. Imagine the farmers saying: &#8216;We will lower methane emissions as much as we can, as quickly as we can'&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=69e02e8b72&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild reset – Megan Woods gives masterclass in surrendering to failure</a> (paywalled).</p>
<p>Young says this abandonment of targets is confusing, because in other policy areas Labour is adamant about the importance of such goals – for example: &#8220;It is clear the Government can&#8217;t make up its mind about targets. It&#8217;s good for child poverty reduction to have an overall target and short-term targets, so much so that it is now a statutory requirement to set targets.&#8221;</p>
<p>She also marvels at the chutzpah of the new Minister of Housing in selling such negative news as being so positive: &#8220;Woods gave a masterclass today in political communication that should impress not only her hapless predecessor, Phil Twyford, but every other member of the Cabinet that could be prone to trouble. Let&#8217;s not call it a reset. It was backdown to behold, a political surrender painted as showing courage and honesty to voters.&#8221;</p>
<p>Little attention has been directed, so far, at the logic of stripping a fifth off the KiwiBuild budget and putting it into a separate programme for the Greens&#8217; nebulous &#8220;rent-to-own&#8221; scheme. But Newsroom&#8217;s Marc Daalder covers this in his article, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=a669a2ad12&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild reset shows how badly policy was bungled</a>.</p>
<p>Here&#8217;s his main point, questioning the scheme: &#8220;the Government concedes that only 4,000 people are expected to benefit from this. That&#8217;s 20 percent of the KiwiBuild budget put towards helping put people in just 4 percent of the now-scrapped 100,000 homes. While that money will eventually be paid back to the Government and recycled into KiwiBuild, that could take years. This raises the question: wouldn&#8217;t the money be better spent on state housing?&#8221;</p>
<p>In terms of Megan Woods&#8217; decision to scrap plans to continue with hundreds of KiwiBuild houses and sell them on the open market, Daalder says: &#8220;the entire situation underscores how significantly the Government&#8217;s flagship policy was bungled.&#8221;</p>
<p>For economist Gareth Kiernan the reset was a missed opportunity, and he laments the &#8220;sticking-plaster solutions&#8221; that were announced – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=bd5403eccf&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild reset proves Government still doesn&#8217;t get it</a>. One preferred solution, he says, would have been to focus more on state housing supply: &#8220;the Government has missed the chance to shift its building programme from the middle-class welfare of KiwiBuild to concentrate on social housing, where the needs are evident.&#8221;</p>
<p>Kiernan also suggests that other more fundamental problems remain in the housing market, which he argues the Government are not grappling with – especially partnering KiwiBuild with mass construction technologies.</p>
<p>It&#8217;s not all bad for the Government. Some commentators have been supportive of the KiwiBuild reset. For example, today Newstalk ZB&#8217;s Mike Hosking says the Housing Minister has been sensible – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=fc5f177099&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">New KiwiBuild Minister Megan Wood showing signs of common sense</a>.</p>
<p>Today&#8217;s very congratulatory editorial in the Dominion Post makes the argument that modern governments aren&#8217;t equipped to make significant market interventions like KiwiBuild, and therefore Megan Woods is to be commended for recognising this and abandoning &#8220;unrealistic&#8221; goals – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=b9e28ff8ae&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">After the fantasy, Woods restores some sense in KiwiBuild</a>.</p>
<p>The editorial points out the gist of the new KiwiBuild approach: &#8220;The reset KiwiBuild will help fund buyers into new homes, rather than build those houses for them.&#8221; Therefore: &#8220;The rethink is less a reset and more of a recognition that modern governments no longer have all the answers. Nor the means. They have steadily withdrawn from the many markets and industries they once controlled and must use greater wisdom to understand what they can change, and how to go about it.&#8221;</p>
<p>Former CEO of the Property Institute of New Zealand, Ashley Church, awards the Government with a 10 out 10 mark for scrapping the Kiwibuild targets, and a 10 out of 10 for making it easier for buyers with smaller savings to get together a deposit to buy houses on the open market – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=551566fd7c&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">5% deposits for first home buyers will remedy housing travesty</a>.</p>
<p>Church says Woods &#8220;has delivered. The main features of her near-total rewrite of the previous policy have rendered it virtually unrecognisable – but the changes are mostly pragmatic and bring KiwiBuild more into line with the commercial and cyclical realities of the market.&#8221;</p>
<p>Finally, for humour about the reset, see The Civilian&#8217;s parody news report: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=e8c4e55b4f&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Government says it will now build just one really nice home</a>.</p>
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		<title>Bryce Edwards&#8217; Political Roundup: The Government suggests it hasn&#8217;t given up on the housing crisis (yet)</title>
		<link>https://eveningreport.nz/2019/06/28/bryce-edwards-political-roundup-the-government-suggests-it-hasnt-given-up-on-the-housing-crisis-yet/</link>
		
		<dc:creator><![CDATA[Bryce Edwards]]></dc:creator>
		<pubDate>Fri, 28 Jun 2019 04:48:32 +0000</pubDate>
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		<guid isPermaLink="false">https://eveningreport.nz/?p=25256</guid>

					<description><![CDATA[Yesterday the Prime Minister sent a clear message to voters: the Government has not given up on fixing the housing crisis. It was communicated via the sacking of the Housing Minister, and a serious re-organisation of the housing portfolio so that a team of five ministers now share responsibility for fixing what is becoming an ]]></description>
										<content:encoded><![CDATA[<p><strong>Yesterday the Prime Minister sent a clear message to voters: the Government has not given up on fixing the housing crisis. It was communicated via the sacking of the Housing Minister, and a serious re-organisation of the housing portfolio so that a team of five ministers now share responsibility for fixing what is becoming an albatross around Jacinda Ardern&#8217;s neck.</strong></p>
<p>Audrey Young emphasises the ruthlessness of Ardern&#8217;s Cabinet reshuffle in the Herald today, saying: &#8220;for all her kindness, the Prime Minister can be ruthless. What happened to Phil Twyford was nothing short of a political humiliation&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=3dc450f06c&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Jacinda Ardern shows ruthless streak in Cabinet reshuffle</a>.</p>
<p>Young says Twyford was removed from more housing portfolios than was necessary: &#8220;Ardern said housing was too big for just one minister, which is nonsense. She could easily have left Twyford in charge of state housing. But even that has been taken from him for reasons that Ardern could not properly articulate but it effectively means that his reputation is so trashed, she does not want him associated with something so precious to Labour.&#8221;</p>
<p>Regardless of any progress he had been making, Young suggests the tide of opinion had turned so strongly against Twyford that he had to go,: &#8220;he had become so wounded that Ardern would not trust him with the &#8220;reset&#8221; of housing policy. She wanted not only a new set of housing priorities but a new face. He was sacrificed for the greater good of the Government and importantly the Labour Party.&#8221;</p>
<p>Perhaps there should be some sympathy for Twyford. Young seems to suggest this is the case: &#8220;her decision is about the optics, not the substance. Twyford has been removed from the job just as he has finally got the shop in order, and just as he is getting to grips with the reality of the public-private housing partnerships there are essential to large-scale housing production. Megan Woods won&#8217;t be coming in to crack the whip and suddenly double the output of Kiwibuild houses. Anything that is produced under Woods&#8217; watch in the next 18 months in whatever rebranding Kiwibuild undergoes will be from the commitments and planning previously undertaken by Twyford.&#8221;</p>
<p>The notion that Twyford has been the sacrificial lamb to the unfixed housing crisis is also emphasised by Henry Cooke, who says &#8220;Twyford himself had started to be associated with that policy failing in the eyes of the public – so Jacinda Ardern decided to sacrifice her minister rather than the entire policy&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=2e612b2bdd&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild: Can Megan Woods do what Phil Twyford could not?</a>. He says that, despite Ardern&#8217;s spin, this is &#8220;undoubtedly a demotion&#8221; for Twyford, and a real blow for his career given how much he had staked on housing and KiwiBuild.</p>
<p>Cooke says the housing crisis is still in full effect under Labour, and now the new Minister Megan Woods &#8220;has the luxury of designing a new version of KiwiBuild that is actually doable with the help of many officials and a relatively clean slate&#8221;. Not only is the name of &#8220;KiwiBuild&#8221; facing abolition – all the Government&#8217;s existing housing promises are up for axing. Expect to see more U-turns – but the long-awaited &#8220;reset&#8221; is now even further off.</p>
<p>Similar arguments are put forward by Stacey Kirk, who says &#8220;Ardern has scrubbed the minister to keep the policy. Phil Twyford had become so tainted by the KiwiBuild disaster, the only way the prime minister could salvage the policy brand &#8211; which still polls extremely well – was with a new minister with a fresh mandate to pull it apart&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=143e8afd0d&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Phil Twyford in Jacinda Ardern&#8217;s sights as first reshuffle squarely lands on Kiwibuild failure</a>. She adds that it was clear Ardern &#8220;no longer had confidence in his ability to deliver a solution to the housing crisis.&#8221;</p>
<p>Twyford is therefore paying the price, Kirk says, for remaining dogmatic and not listening about the need to fix KiwiBuild: &#8220;The policy was quite obviously a dead horse that Twyford refused to stop flogging. Twyford&#8217;s failure is not born of incompetence, so much as it is a blinkered obsession to some of the more problematic &#8211; and probably ideological &#8211; aspects of the KiwiBuild policy. Ardern alluded to as much in announcing her decision. As much as Twyford may have been placed in an invidious position with a tough policy to create, he was the minister and ultimately accountable. If it wasn&#8217;t working, he had many opportunities to make the required changes. His officials expressed reservations throughout, but he persevered when he should have cut and run.&#8221;</p>
<p>For Jane Patterson the reorganisation of the Housing portfolio &#8220;shows the commitment of the government to make progress&#8221;, and she spells out the changes like this: &#8220;the fact Prime Minister Jacinda Ardern now effectively has five ministers with some role in housing shows the breadth of the challenge &#8211; not just the affordable house building programme but in homelessness, state housing and the limitations on development under the Resource Management Act&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=57983326fe&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">New housing team eases Phil Twyford&#8217;s indignity</a>.</p>
<p>But some are questioning the logic of the housing portfolio reorganisation. For a start, it is all very reminiscent of John Key&#8217;s failed reorganisation in 2014 when his government was also under pressure for failing to deal adequately with the housing crisis.</p>
<p>This is best conveyed by Toby Manhire, who recounts how in 2014 Key announced &#8220;there would be a new &#8216;ministerial team&#8217;, with the portfolio split between three senior ministers. Paula Bennett got social housing. Bill English got Housing New Zealand. Nick Smith had been under mounting pressure over a housing crisis which the government obstinately refused to call a housing crisis. He got building and construction, in what seemed like a face-saving consolation prize&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=7da239a84e&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Housing crisis history repeats as Ardern breaks up the housing job</a>.</p>
<p>Manhire then fast forwards five years and points to National&#8217;s Housing spokeswoman Judith Collins arguing that splitting the portfolio &#8220;looks like panic&#8221;, noting that &#8220;She could have been describing either the 2014 or 2019 carve-up.&#8221;</p>
<p>Collins also made a critique of the split up this morning on the AM Show, saying: &#8220;We&#8217;ve got all these ministers now, it&#8217;s split into three, but at the same time the Government has a Bill going into Parliament called the Kāinga Ora Bill &#8211; what that does is it brings Housing NZ, KiwiBuild and the Ministry for Housing and Urban Development all together &#8211; so you&#8217;ve got all the agencies together, but all the ministers split. It&#8217;s bizarre&#8221; – see <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=aea0bb2807&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Housing job split despite Bill to combine them</a>.</p>
<p>The same article explains the merger of the housing agencies: &#8220;Currently at the select committee process, the Kāinga Ora – Homes and Communities Bill would disestablish Housing NZ, bringing state homes under a new umbrella organisation called Kāinga Ora – Homes and Communities, which would also have responsibility for urban development.&#8221;</p>
<p>Act leader David Seymour has also challenged the lines of responsibility and accountability that will result from the new arrangement: &#8220;It&#8217;s now not obvious whose fault it is, when for instance, the cost of rent that New Zealanders pay goes up or the number of houses built goes down. Because you&#8217;ve got three different ministers with overlapping responsibilities who can all say the other one&#8217;s responsible&#8221; – see Jo Moir&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=6496cb1d39&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Judith Collins says demotion shows KiwiBuild a failure, offers olive branch</a>.</p>
<p>In the above article, Moir also raises important and unanswered questions about this: &#8220;So how will the separate portfolios and responsibilities work? Any detail or explanation was less than forthcoming with both Mr Twyford and Dr Woods refusing media interviews, instead sending out short written statements. And with a three-week recess now underway little light will shine on the unanswered questions anytime soon.&#8221;</p>
<p>A number of journalists have also questioned the PM and Government&#8217;s cynical move of announcing the reshuffle at the last possible moment and then avoiding answering questions about it.</p>
<p>Here&#8217;s what Jane Patterson says: &#8220;Once again though, the government appears cynical in its timing. Ms Ardern waited until the last hours of the last day before the longest recess during the sitting programme. She fronted a news conference and the two newly promoted ministers talked to reporters shortly after. But the timing presented others the opportunity to avoid the media as the House rose and MPs were free to depart Parliament within hours of the announcement. Ms Woods and Mr Twyford have both declined requests for interviews – issuing statements instead and making the most of the opportunity to avoid any tricky questions.&#8221;</p>
<p>Finally, although the Prime Minister&#8217;s main Cabinet reshuffle message is that her government is still very serious about dealing with the housing crisis, should the public have any confidence that a reshuffling of the deck is going to bring about real change? I&#8217;ve tried to answer this question in a column today for RNZ – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=20cb809099&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Is the government now more serious about the housing crisis?</a> I suggest that this although this government hasn&#8217;t cared much about fixing the housing crisis, maybe this might be about to change with the appointment of the first genuine leftwing housing minister in ages.</p>
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		<title>Bryce Edwards&#8217; Political Roundup: Who&#8217;s accountable for the KiwiBuild debacle?</title>
		<link>https://eveningreport.nz/2019/06/26/bryce-edwards-political-roundup-whos-accountable-for-the-kiwibuild-debacle/</link>
		
		<dc:creator><![CDATA[Bryce Edwards]]></dc:creator>
		<pubDate>Wed, 26 Jun 2019 05:09:05 +0000</pubDate>
				<category><![CDATA[Analysis]]></category>
		<category><![CDATA[Analysis Assessment]]></category>
		<category><![CDATA[Bryce Edwards]]></category>
		<category><![CDATA[Critical Politics]]></category>
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		<category><![CDATA[Housing]]></category>
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		<guid isPermaLink="false">https://eveningreport.nz/?p=25180</guid>

					<description><![CDATA[Will KiwiBuild minister Phil Twyford lose his portfolio in tomorrow&#8217;s Cabinet reshuffle? That&#8217;s the big question, given that the Government&#8217;s flagship housing programme has been so heavily discredited, and the accompanying debate about Twyford&#8217;s role in the debacle and whether he&#8217;s to blame. It seems unlikely that Twyford will get the sack. Although Prime Minister ]]></description>
										<content:encoded><![CDATA[<p><strong>Will KiwiBuild minister Phil Twyford lose his portfolio in tomorrow&#8217;s Cabinet reshuffle? That&#8217;s the big question, given that the Government&#8217;s flagship housing programme has been so heavily discredited, and the accompanying debate about Twyford&#8217;s role in the debacle and whether he&#8217;s to blame.</strong></p>
<p>It seems unlikely that Twyford will get the sack. Although Prime Minister Jacinda Ardern has been unwilling to express her complete confidence in Twyford&#8217;s KiwiBuild work, she has also recently claimed that he&#8217;s done an &#8220;incredible job&#8221;. She has also backed him by saying &#8220;I&#8217;m loath to see one individual carry any blame for what has been a policy that&#8217;s been difficult&#8221;.</p>
<p>Newstalk ZB&#8217;s Heather du Plessis-Allan also argues today that it&#8217;s unfair to blame Twyford for a policy that he inherited from Annette King and David Shearer, and which has been strongly pushed by all Labour MPs including Ardern – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=6205a9d4ee&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Why all of Labour must take blame for ridiculous KiwiBuild</a>.</p>
<p>Here&#8217;s du Plessis-Allan&#8217;s main point: &#8220;This was a major Labour party policy at two elections. It was a huge promise that they keep on repeating. He was the guy asked to do the best he could with that. He was effectively given a helicopter and told to fly to the moon. How could he make that work? It was always impossible. So he doesn&#8217;t deserve demotion actually.&#8221;</p>
<p>But there are many commentators – from across the political spectrum – who believe Twyford should go. Writing for the Herald yesterday, David Cormack says: &#8220;So the big thing that should happen and which seems to have been signalled is Twyford should lose at least one portfolio. Probably housing. Because truth be told KiwiBuild has been a cluster fuss. And Phil has not been great at fixing the housing crisis&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=a3d19a9103&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Why Twyford will probably lose housing portfolio</a> (paywalled).</p>
<p>In terms of his replacement, Cormack says: &#8220;The Minister best placed to probably pick up the housing portfolio would be a big ol&#8217; nerdy swot. Someone like David Parker.&#8221;</p>
<p>For Matthew Hooton, the most obvious candidate to be the new Minister responsible for KiwiBuild is Kris Faafoi, but he says the Government seem to want to keep Twyford in place: &#8220;the current Beehive line is that perhaps Twyford should remain Minister of Housing now that he has learned about the industry and from his complete failure so far&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=592641a15a&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Why Housing Minister Phil Twyford must go</a> (paywalled).</p>
<p>Hooton believes this would be a mistake: &#8220;there is precious little evidence that Twyford, now 56, is a person who can listen and learn. KiwiBuild, after all, is not a new policy. It was announced by Labour back in 2012 with Twyford responsible for building and construction all the way through.&#8221;</p>
<p>Furthermore, there&#8217;s a question of accountability: &#8220;surely the Prime Minister must hold him accountable for the tens of millions he has wasted on his initial folly&#8221;. And Hooton says Ardern owes to Aucklanders, to &#8220;not leave them under the control of someone whose credibility among everyone from first-home hunters to the country&#8217;s most senior business leaders is so low.&#8221;</p>
<p>Twyford is actually failing to be accountable for the KiwiBuild fiasco according to Duncan Garner, who points out that the minister simply is no longer doing media interviews on the housing programme: &#8220;Twyford is so embattled he&#8217;s now living in his own panic room. We have asked, in the public interest, to interview Twyford 11 times in recent months &#8211; he&#8217;s turned us down every time. Phil, if you can&#8217;t be accountable to the people, stop taking up space in Cabinet&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=b227104b68&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Twyford&#8217;s no-show at KiwiBuild conference a &#8216;middle finger&#8217; to the industry</a>.</p>
<p>In fact, Garner points out that Twyford has failed to be accountable to the construction industry that is working on KiwiBuild, saying that the minister pulled out of a Kiwibuild summit this week, thereby insulting those who were expecting to hear him speak. Apparently, Twyford &#8220;astonishingly, pulled the middle finger to the entire industry and pulled out at the last minute. The industry wants to know, deserves to know, what, how and when his shambles of a policy will be euthanized or scaled back.&#8221;</p>
<p>See also, Garner&#8217;s earlier column: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=40a166c832&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Flagship KiwiBuild policy in tatters as PM refuses to speak its name</a>. In this, Garner asks what exactly Twyford was doing for nine years in opposition? And he says: &#8220;Truth is Twyford has let himself down and continues to let the country down every day by not being totally upfront and realistic.&#8221;</p>
<p>The pros and cons of getting rid of Twyford are discussed by Claire Trevett in her article last week: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=38d91bf875&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Housing Minister Phil Twyford&#8217;s Waterloo: Will KiwiBuild cost him?</a> (paywalled). She points out the irony in the fact that, when he was in opposition, Twyford used to go hard against the then Housing minister, Nick Smith, for his lack of progress, and he&#8217;d frequently call for his resignation. But &#8220;the tables have turned somewhat&#8221; and now Twyford is on the receiving end of the same sort of scrutiny over the housing crisis.</p>
<p>Here&#8217;s Trevett&#8217;s main points about whether to sack or retain Twyford: &#8220;Handing the portfolio to another minister would buy some breathing space and break that association. However, there are problems with moving the portfolio to another minister. The first is the shortage of ministers able to take on the Mr or Ms Fixit role required, and turn things round before 2020. The other problem is whether anybody would want the job. Many would prefer Twyford to carry the can if things turn totally to custard. Ardern will also be assessing how much of the KiwiBuild mess is Twyford&#8217;s own fault and whether Kiwibuild is as bad as it seems&#8221;.</p>
<p>At the KiwiBuild summit this week there was obviously plenty of discussion about the ongoing viability of the housing programme. According to an RNZ report from the summit, &#8220;A poll of people at the KiwiBuild summit found a majority had little to no confidence in KiwiBuild ever achieving its original aims. And the frustration from industry is clear. They want the Government to move in other areas too &#8211; in regulatory reform, freeing up land and building. Infrastructure&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=a3fd78a380&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Construction industry urges Government to get on with KiwiBuild changes</a>.</p>
<p>This article also reports that other Government figures attended the Kiwibuild summit but were reluctant to be accountable for KiwiBuild or even discuss the details of the programme. Standing in for the absent Twyford, Jenny Salesa, the Building and Construction Minister, apparently &#8220;didn&#8217;t even mention KiwiBuild once in her speech&#8221; and told journalists: &#8220;In terms of housing and KiwiBuild is part of housing, I&#8217;m not the responsible minister&#8221;. Similarly, &#8220;the head of the KiwiBuild Delivery Agency, Helen O&#8217;Sullivan, also refused to answer media questions on progress.&#8221;</p>
<p>Some of the reluctance by the Government to talk about KiwiBuild might relate to the fact that the long-promised &#8220;reset&#8221; or &#8220;recalibration&#8221; might be about to take place. It was supposed to happen about six months ago, but is continually being delayed. The most recent statement on the timing from Twyford is that: &#8220;It&#8217;s taking a little bit longer but it won&#8217;t be much longer. I&#8217;d be I would think, a few weeks at most.&#8221;</p>
<p>It now seems that KiwiBuild might even be entirely killed off. Henry Cooke reports that Jacinda Ardern has signalled the housing programme could be axed before the next election, which would leave all of Labour&#8217;s main election promises broken – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=792928656a&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild policy not guaranteed in 2020</a>.</p>
<p>The debate has turned to the question of explaining how KiwiBuild turned into the disaster that it now is. For the most detailed account of &#8220;the route to the mess that is KiwiBuild&#8221;, see Henry Cooke&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=8932e9bada&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">How KiwiBuild fell down, and whether anything can be saved from the wreckage</a>.</p>
<p>Cooke explains how the flagship housing programme was a great example of policy made on the hoof – or in this case, made up by Annette King during a short car ride with the head of the Salvation Army. It seems the policy was also more designed for ideological and electorate purposes than to actually be implemented. And Cooke details how the scheme took on a piecemeal approach, with all of the original promises of the scheme slowly but surely dropping away.</p>
<p>Another version of what went wrong can be found in former Property Institute of New Zealand CEO, Ashley Church&#8217;s article, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=353cbc11b0&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Why did KiwiBuild go so badly wrong?</a> This boils down to the idea &#8220;that &#8216;Government planning&#8217; is an oxymoron and that the best thing the Minister could do, to achieve his targets, is to get out of the way and leave the private sector to it&#8221;.</p>
<p>Alternatively, David Cormack has an explanation that says the Labour politicians were just too naïve and too ready to see the housing problem as a National Party one: &#8220;It seems that Labour genuinely believed that National wanted a housing crisis and it was merely a lack of willpower and smugness that stopped them from fixing it. So along came Phil, and with all the willpower and smugness in the world he was unable to fix it. Maybe there are more systemic issues at play, like RMA reform, the cost of new-build components and other boring bureaucratic issues that require attention.&#8221;</p>
<p>In Hooton&#8217;s column, above, he also criticises Labour for taking such a limited and piecemeal approach to solving the housing crisis: &#8220;it would have to be done at scale, utilising the Crown&#8217;s procurement power, rather than as a collection of much smaller projects&#8221;. He says that should have been done on a mass scale, and would have been more successful if it had instead involved building 100,000 state houses (which could still be privatised in a &#8220;rent to buy&#8221; scheme).</p>
<p>Duncan Garner also has another opinion piece in which he is scathing about Twyford&#8217;s failure to properly develop the KiwiBuild concept, explaining that the problems have come about because it was never a serious proposal: &#8220;Kiwibuild was more marketing than anything made of solid concrete; it was only ever just a slogan, but slogans do not turn into affordable houses. You can&#8217;t sleep in a slogan, or stay warm in a catchphrase, or house your family in a branding exercise. I am sorry to say this New Zealand, but we were taken for fools and we were misled; joke, flop, pathetic, disappointing, lost opportunity. Nine years of neglect? That is Labour had nine years in opposition planning Kiwibuild, but not doing a day&#8217;s work on it&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=b85e5459ed&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Has there been a bigger flop that Phil Twyford&#8217;s Kiwibuild?</a></p>
<p>Finally, it&#8217;s worth noting that despite all the troubles with KiwiBuild, a large majority of New Zealanders (60 per cent) still believe that the Government should be proceeding to build the promised 100,000 affordable houses – see 1News&#8217; <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=4b20a55f75&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Latest KiwiBuild development revealed for Auckland, as poll shows Kiwis still back the concept</a>.</p>
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		<title>Bryce Edwards&#8217; Political Roundup: The KiwiBuild betrayal</title>
		<link>https://eveningreport.nz/2019/05/15/bryce-edwards-political-roundup-the-kiwibuild-betrayal/</link>
		
		<dc:creator><![CDATA[Bryce Edwards]]></dc:creator>
		<pubDate>Wed, 15 May 2019 04:37:44 +0000</pubDate>
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		<guid isPermaLink="false">https://eveningreport.nz/?p=23850</guid>

					<description><![CDATA[When politicians win votes on the basis of heroic promises to fix intractable problems, but then break those promises, the public quite rightly feel they&#8217;ve been ripped off.  That&#8217;s exactly what has happened with KiwiBuild. Labour politicians largely won office in 2017 on the basis of their scathing critique of how badly the National Government ]]></description>
										<content:encoded><![CDATA[<p><strong>When politicians win votes on the basis of heroic promises to fix intractable problems, but then break those promises, the public quite rightly feel they&#8217;ve been ripped off. </strong></p>
<p>That&#8217;s exactly what has happened with KiwiBuild. Labour politicians largely won office in 2017 on the basis of their scathing critique of how badly the National Government had managed issues of inequality and, in particular, the housing affordability crisis. Labour convinced voters they would take action on these problems, and their flagship housing construction policy would swiftly produce 100,000 &#8220;affordable&#8221; new homes.</p>
<p>It is now evident that Labour will not deliver on this, breaking their election promise. Therefore, commentators and opponents are increasingly talking about the possibility of Housing Minister Phil Twyford being sacked for his poor performance.</p>
<p>The heat was turned up last week, after Twyford gave an interview in which he suggested he was considering abandoning the KiwiBuild promise of delivering 100,000 houses – see Jenée Tibshraeny&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=4ec4f7861b&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Twyford coy on 100,000-house KiwiBuild target</a>.</p>
<p>This all comes in the context of Twyford and the Government saying that the KiwiBuild programme is now being &#8220;recalibrated&#8221;, by which they appear to mean that the whole programme is being re-evaluated and a re-launch is expected, in which some of the detail of the scheme might differ from what has been promised.</p>
<p>In the interview with Tibshraeny, Twyford says the recalibrated version will be announced in mid-June (a date that has been continually pushed back). In terms of the 100,000-house promise, he said this was something he&#8217;d been &#8220;looking at&#8221; but wouldn&#8217;t comment on, except to say: &#8220;It&#8217;s like American nuclear ships in the 1980s. It&#8217;s a neither confirm nor deny situation&#8221;. And since then, neither Twyford nor the Prime Minister have been able to confirm in Parliament that the promise still stands.</p>
<p>Reporting on this, Tova O&#8217;Brien pointed out that this wasn&#8217;t the first time Twyford has had to admit defeat on the targets: &#8220;In its first year, 1000 homes were supposed to be built. That promise was broken in January, and revised down to about 300. A KiwiBuild reset was announced then, but still the mother of all targets remained&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=5d6f7d8d1b&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild: Is the Government&#8217;s flagship policy over?</a></p>
<p>O&#8217;Brien also pointed out that &#8220;Earlier this year, Phil Twyford said he&#8217;d stake his job on achieving the goals&#8221;, but &#8220;asked on Wednesday if he would resign, Twyford refused to answer and stormed off, as a proverbial storm brews for the Government.&#8221;</p>
<p>It&#8217;s still not entirely clear whether the 100,000 target stands or not. Deputy Prime Minister Winston Peters is adamant that not only does it stand, but it will actually be surpassed. Jenna Lynch reports: &#8220;Peters is doubling down, saying the Government will build &#8216;a lot more&#8217; than 100,000. He doesn&#8217;t believe the nay-sayers, telling the House that the KiwiBuild target is &#8216;easily achievable&#8217;. He even borrowed a line from US President Donald Trump: &#8216;The intention is to make this country great again&#8217;.&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=3441933f2f&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild: Winston Peters says Govt will build &#8216;a lot more&#8217; than 100,000 homes</a>.</p>
<p>Duncan Garner has reacted to this, saying &#8220;Does Winston Peters think we are thick, or does he think we just aren&#8217;t watching and listening? We are Winston and it&#8217;s time to call you out, stop misleading the public on stuff that matters – housing&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=9548ca05e0&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild was Labour&#8217;s biggest promise, now it&#8217;s their biggest failure</a>.</p>
<p>Garner says &#8220;it&#8217;s a total flop, 84 homes in 541 days, what a spluttering mess.&#8221; Looking at how disastrous the programme has been, he concludes that &#8220;KiwiBuild should be scrapped and you work on the things in housing that matter and work.&#8221;</p>
<p>For Mike Hosking, this was all inevitable and is typical of politicians: &#8220;You can&#8217;t build 100,000 houses in 10 years. You can&#8217;t, and shouldn&#8217;t, promise you can, because it isn&#8217;t real, it isn&#8217;t possible &#8211; and any promise to the contrary is dishonest, naive and bound to end in tears&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=e468fe33b5&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild collapse confirms this is a Government run by amateurs</a>.</p>
<p>According to Hosking, Twyford should have resigned: &#8220;If this was a business deal, there would be legal action, the operators would be accused of fraud.&#8221;</p>
<p>Henry Cooke is also scathing, writing in the Sunday Star Times this week that <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=316b7cae44&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild failure is more than a broken promise, it&#8217;s a betrayal</a>. He says &#8220;this is not just one promise broken – it&#8217;s a betrayal of the very foundation Labour built its election campaign on.&#8221;</p>
<p>Cooke says that &#8220;some level of punishment&#8221; is now likely, and &#8220;Labour can expect a whole lot more hostility, of distrust in their promises. Its best issue has gone from go-to to embarrassment. It&#8217;s hard to come back from that.&#8221;</p>
<p>The 100,000 promise should be taken seriously says Cooke: &#8220;Now, specificity is its biggest problem. People remember a big number. Suddenly Housing Minister Phil Twyford is telling people he can&#8217;t guarantee that number any more, as the entire policy is &#8216;under review&#8217;. The review follows a string of smaller failures. The interim goal of 1000 in the first year was scrapped when it became clear KiwiBuild would have difficulty hitting even 100 homes.&#8221;</p>
<p>Cooke reports that there are still serious attempts within the bureaucracy to make KiwiBuild work: &#8220;The KiwiBuild unit within the Ministry of Housing and Urban Development is hard at work signing up developers &#8211; the disappearance of the interim target and installation of new leader Helen O&#8217;Sullivan has allowed the team to re-assess what went wrong with some of the earlier developments.&#8221;</p>
<p>Yet there is an intrinsic problem with the KiwiBuild design, Cooke says: &#8220;The underlying issue for KiwiBuild is that it is a policy from the middle of last century transplanted into the 2010s. When Labour dreamt up KiwiBuild the party was in the middle of a profound identity crisis, and looked to its history for inspiration &#8211; a history that involved the first Labour Government building tens of thousands of state homes. But that Government did it with state-employed builders, a politically-controlled interest rate, and a very cushy deal for a guy named James Fletcher. That is simply not the way Governments are run these days.&#8221;</p>
<p>Similarly, Hamish Rutherford wrote in February that <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=88f3d472ee&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild is the solution you come up with when you don&#8217;t want to fix the problem</a>. He argues that the Government is looking for a simple solution to the housing crisis but is inadvertently making things worse: &#8220;Rather than focus first and foremost on removing the barriers which make housing so expensive, the Government&#8217;s solution is to add fuel to the fire.&#8221;</p>
<p>This comment came in the wake of the Reserve Bank explaining that the KiwiBuild programme was actually going to &#8220;crowd out&#8221; other developers from constructing houses. Reserve Bank governor Adrian Orr had explained that &#8220;If they [KiwiBuild] were going to build 100 houses, that means that between 50 and 75 houses elsewhere aren&#8217;t built.&#8221;</p>
<p>Commenting on this, Newsroom&#8217;s Thomas Coughlan said: &#8220;It added further evidence to fears the programme was broken beyond repair. A little over halfway through its first year, there appear to be two major issues with the programme. First, ironically, is a lack of demand. The houses are too expensive for most people. Second is a concern about houses being built in the wrong parts of the country&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=d4646df761&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Is KiwiBuild broken beyond repair?</a></p>
<p>The Otago Daily Times also seems to think that the building programme needs more than a recalibration. In a recent editorial it says that recent developments in KiwiBuild suggest it &#8220;has already lost the hearts and minds of those it was earmarked to help&#8221;, and it &#8220;appears to be in tatters&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=128d2f2c63&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Is it time of a KiwiBuild switch?</a></p>
<p>The newspaper believes that something can be salvaged from the wreckage, and the best possibility is that the Government turns it into a way of getting prefabricated construction going on a large scale instead: &#8220;Perhaps, then, it is time KiwiBuild&#8217;s champions accept defeat, drop the last of their targets and instead embrace pragmatism &#8211; by focusing the Government&#8217;s heft, with guarantees of funding and demand, solely on ensuring a powerful factory-built housing industry grows in New Zealand. It is not too late for a KiwiBuild shift away from its initial promises towards a market-led, Government-backed solution. Forget the targets, build the factories.&#8221;</p>
<p>So will the Minister be sacked? There are increasing calls for him to go, as well as forecasts that he will lose his job in the upcoming Cabinet reshuffle after the Budget. Certainly, there have been plenty of harsh criticisms of his performance. For example, in her assessment of all Cabinet Ministers, Audrey Young awarded Phil Twyford the lowest evaluation of four out of ten, saying this: &#8220;Made the classic Opposition mistake of over-simplifying the housing supply problem, then over-promising and under-delivering the solution, KiwiBuild&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=330f9f7548&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Who rates highly in our Cabinet report card – and who disappoints?</a> (paywalled).</p>
<p>Others are also suggesting he&#8217;s got problems. RNZ&#8217;s political editor Jane Patterson outlines some of the challenges in her report, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=435f0a707b&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Housing Minister Phil Twyford refuses calls for resignation over KiwiBuild</a>.</p>
<p>She also quotes economist Shamubeel Eaqub saying the programme needed major change if it was to survive: &#8220;I&#8217;m not optimistic that we will see a big reset but I think we need a fundamental repositioning of KiwiBuild if it is to succeed. In its current form it is doomed to fail&#8221;.</p>
<p>Jane Patterson also deals well with the latest bureaucratic problems in the scheme, especially controversy over how officials are determining which property developers to provide financial backing to in underwriting their house construction – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=9a456bbc18&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Phil Twyford&#8217;s credibility questioned over changing answers on KiwiBuild</a>.</p>
<p>Here&#8217;s the key point about this &#8220;additionality test&#8221;: &#8220;Twyford is under fire for a series of statements he and his ministry have made about the oversight of the Crown underwrite – hundreds of millions of taxpayer dollars committed to shift the risk from property developers to the Crown by promising a guaranteed price.&#8221;</p>
<p>The underwriting of private developers&#8217; KiwiBuild constructions has become an issue, given that Twyford has redirected the scheme to incorporate houses that were already planned or being constructed in the private market. And last month it was revealed that most of the new &#8220;KiwiBuild homes&#8221; had not started out as such – see Jason Walls&#8217; <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=8f1c537a87&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Half of all KiwiBuild homes already under construction before being brought into the programme</a>. In this article, National&#8217;s housing spokeperson, Judith Collins, comments that this change means that &#8220;KiwiBuild is just a welfare scheme for property developers&#8221;.</p>
<p>On this point, Gareth Kiernan, chief forecaster at Infometrics, has also been cutting: &#8220;If the aim is to increase the supply of housing because we&#8217;re not building fast enough and that&#8217;s contributing to the affordability programme, then Phil Twyford&#8217;s modus operandi to date of walking down the street, finding a house that&#8217;s already being built, and slapping a KiwiBuild sticker on is patently stupid and nothing more than window dressing&#8221; – see Susan Edmunds&#8217; <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=117cb90f46&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Huapai KiwiBuild homes had already been tried for sale on open market</a>.</p>
<p>Kiernan has more to say: &#8220;However, if the aim of the programme is to effectively provide a taxpayer subsidy to help a select and lucky few people into their first home, then selling at a discounted rate to first-home buyers fits the objective. Because, as I&#8217;ve previously argued, the Government doesn&#8217;t really know what it wants to achieve with the policy beyond virtue signalling, KiwiBuild is fast slipping towards the lesser latter aim than the more admirable and fundamentally more important goal of genuinely trying to fix the housing affordability crisis.&#8221;</p>
<p>For more arguments about the major changes needed to make KiwiBuild work, see Susan Edmunds&#8217; <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=d04b9b1eb5&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild &#8216;almost no chance of success&#8217; in current form</a>.</p>
<p>Finally, for more comment on the KiwiBuild scheme, see my updated blog post, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=aa080baa3a&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Cartoons about Labour&#8217;s KiwiBuild and the housing crisis</a>.</p>
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		<title>Bryce Edwards&#8217; Political Roundup: KiwiBuild – fix it or ditch it</title>
		<link>https://eveningreport.nz/2019/01/30/bryce-edwards-political-roundup-kiwibuild-fix-it-or-ditch-it/</link>
		
		<dc:creator><![CDATA[Bryce Edwards]]></dc:creator>
		<pubDate>Wed, 30 Jan 2019 03:04:22 +0000</pubDate>
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					<description><![CDATA[Political Roundup: KiwiBuild – fix it or ditch it  by Dr Bryce Edwards Given the ongoing problems with the Government&#8217;s flagship housing policy, it seems inevitable that a major change of direction is required for KiwiBuild. A consensus is growing that the policy either needs to be revamped or replaced with something more effective and ]]></description>
										<content:encoded><![CDATA[<p class="null"><strong>Political Roundup: KiwiBuild – fix it or ditch it </strong></p>
<p>by Dr Bryce Edwards</p>
<p><strong>Given the ongoing problems with the Government&#8217;s flagship housing policy, it seems inevitable that a major change of direction is required for KiwiBuild. A consensus is growing that the policy either needs to be revamped or replaced with something more effective and ambitious.</strong></p>
<figure id="attachment_18719" aria-describedby="caption-attachment-18719" style="width: 619px" class="wp-caption aligncenter"><a href="https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild.jpg"><img decoding="async" class="size-full wp-image-18719" src="https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild.jpg" alt="" width="619" height="349" srcset="https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild.jpg 619w, https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild-300x169.jpg 300w" sizes="(max-width: 619px) 100vw, 619px" /></a><figcaption id="caption-attachment-18719" class="wp-caption-text">Kiwibuild homes.</figcaption></figure>
<p><strong>Today the New Zealand Herald</strong> has called for the Government to &#8220;think again about KiwiBuild&#8221; – see its editorial: K<a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=86f268eea3&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">iwiBuild not only weapon in armoury</a>. The newspaper emphasises that there are other options for dealing with the housing crisis, some of which the Government has already been successfully utilising: &#8220;Tax proposals, tenancy laws, banning foreign buyers, state house building and infrastructure bonds were all just as important.&#8221;</p>
<p>The problem with KiwiBuild lies at its very core, as it has not been well thought out: &#8220;Not much market research appears to have been done before KiwiBuild was adopted. Some should be done if the Government is determined to press on with the programme.&#8221;</p>
<p>For the most rigorous and important ideas about fixing KiwiBuild, it&#8217;s worth looking at what economist Shamubeel Eaqub proposes. He wrote the original book, &#8220;Generation Rent&#8221;, about the housing crisis, and especially how it&#8217;s impacting on those at the bottom. Two days ago, his strong views about how &#8220;KiwiBuild is not fit for purpose&#8221; were published in Catherine Harris and Bonnie Flaws&#8217; article, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=57c66a8d9a&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Kiwibuild should build more rental properties economist Shamubeel Eaqub says</a>.</p>
<p>Eaqub argues that it&#8217;s time for the government to shift to building rental properties – and perhaps even more state housing. He claims that KiwiBuild&#8217;s core focus on increasing home ownership is simply misguided, especially given that the Labour-led Government isn&#8217;t willing to adequately fund the programme. The economist says that even if KiwiBuild meets its target of 100,000 houses, and if the private market also builds 250,000 homes, New Zealand will still be short of 200,000 homes. So however you look at it, the Government&#8217;s current plans are inadequate: &#8220;Not only are we not keeping up with population growth we are not even meeting current need. We need to much more ambitious about scaling it up massively.&#8221;</p>
<p>Rental housing has traditionally been the best way to deal with a housing crisis according to Eaqub: &#8220;The reason why I think build to rent has to be the answer is because that is how they solved the housing crisis post-war in Europe.&#8221;</p>
<p>To achieve a big increase in rental housing, the Government has to go beyond the current KiwiBuild plans: &#8220;Eaqub said that the problem is too big to be able to fix with $2 billion, the size of KiwiBuild&#8217;s fund. Instead he said we could partner with institutional investors to build rental properties or use the deep pool of money in Kiwisaver.&#8221;</p>
<p>Back in December, Eaqub also made the case for the Government to move more into providing rental accommodation rather than the less-affordable KiwiBuild houses, saying that the market doesn&#8217;t have the capacity to provide much social housing: &#8220;At the moment there is no one who can really do that, but if the Government says we&#8217;re in the market to essentially procure X thousand units of &#8216;build to rents,&#8217; and we&#8217;re going to underwrite the rent at some kind of indexation, the stuff would be built&#8221; – see Catherine Harris&#8217; <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=6998babf31&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Kiwibuild could &#8216;underwrite rental and social housing&#8217;</a>.</p>
<p>For further critiques of KiwiBuild by Eaqub, see Dan Satherley&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=50b29aad08&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild: Government &#8216;recalibrating&#8217; targets for under-fire housing scheme</a>. In this, the economist argues that KiwiBuild is currently the wrong solution to the problem. He says it was &#8220;never going to fix the underlying problems of the housing market&#8221;, which include &#8220;planning rules, infrastructure and funding for local government&#8221;.</p>
<p>He reiterates that just trying to get prospective homeowners into brand new houses is the wrong approach: &#8220;The new houses are expensive. In reality, what we really want to do is increase the supply of rental stock. That&#8217;s what New Zealand desperately needs – good quality rental stock that&#8217;s owned by institutions and well-managed.&#8221;</p>
<p>Also questioning the focus on brand new houses is Massey University economist Oscar Lau, who says: &#8220;why do the homes have to be brand sparkling new? New properties inevitably attract high bids and poorer families who just want to own a modest home will miss out. Instead of building new homes, the Government could buy a wide range of existing properties of different sizes, ages and in different neighbourhoods – and auction them off to qualified buyers&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=ce109da23d&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">An alternative to KiwiBuild that makes economic sense</a>.</p>
<p>Therefore, KiwiBuild could be selling existing homes rather than building new ones, and leave the expensive new homes to the private market. Lau explains further: &#8220;This way the Government doesn&#8217;t need to meddle in property development. It doesn&#8217;t need to struggle with construction schedules. To avoid exciting the market, it would need to buy gradually and orderly, rather than splurge. More importantly, it could release some KiwiBuild land to the market for development, so new supply will balance its purchases.&#8221;</p>
<p>If the Government is determined to focus on home ownership, then it&#8217;s going to have to get more ambitious, and find some bigger and better ways of delivering. One such way is to use mass prefabrication, which the Government has so far been reluctant to invest in with KiwiBuild, probably because of the initial cost outlays.</p>
<p>Other countries have, however, successfully used mass prefabrication to solve housing crises. For the best outline of this, see Catherine Harris&#8217; <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=41cd3f2260&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">The key to Sweden&#8217;s million houses target – and Kiwibuild&#8217;s</a>.</p>
<p>Here&#8217;s the key part of the article: &#8220;If you think the Government&#8217;s KiwiBuild target to fix the housing shortage is overly ambitious, just look at Sweden. In 1965, with a population of 8 million, the Nordic country began its &#8216;Million Homes&#8217; plan to build 10 times as many houses as New Zealand&#8217;s target within 10 years. By the end of 1974, it had exceeded its target by 6000&#8230; How did they do it? Largely through prefabrication.&#8221;</p>
<p>In this story Harris says, &#8220;Research suggests offsite manufacturing can slash 15 per cent off the cost of building and speed up the time it takes by 60 per cent.&#8221;</p>
<p>One person with an interest in this is Warehouse founder Stephen Tindall, who says &#8220;You can construct houses for almost half the price that they cost here&#8221; – see the Herald&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=ccdfdb8db8&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">If anyone can bring house prices down, it&#8217;s him: REINZ welcomes Tindall&#8217;s KiwiBuild interest</a>.</p>
<p>According to this story, &#8220;The Real Estate Institute has backed Warehouse founder Sir Stephen Tindall&#8217;s interest in KiwiBuild, indicating that if anyone can bring down house prices in this country, it&#8217;s him. Bindi Norwell, REINZ chief executive, welcomed Tindall&#8217;s announcement that he was assisting one of the 102 off-site manufacturing KiwiBuild tender parties&#8221;.</p>
<p>Perhaps, therefore, the Government just needs to contract one big company to progress KiwiBuild. This is the view of &#8220;construction industry expert&#8221; John Tookey, who is reported as arguing that KiwiBuild &#8220;would have been more efficient to award a large scale contract to one company&#8221; – see Emma Hatton&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=9f57ae79ff&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Building industry not surprised KiwiBuild won&#8217;t hit target</a>.</p>
<p>The same article also suggests that the current KiwiBuild bureaucratic processes need streamlining. Property Council chief executive Leonie Freeman is reported explaining why developers haven&#8217;t been more involved in KiwiBuild: &#8220;Some of the feedback we&#8217;ve received is that from then on the process has been slow and very bureaucratic.&#8221;</p>
<p>Others in the construction industry are forecasting some big changes to KiwiBuild. For example, Property Institute chief executive Ashley Church outlines expected alterations: &#8220;This will take the form of changes to eligibility criteria, a coordinated Government &#8216;charm offensive&#8217; to private developers, or some form of state subsidisation or delayed payment, or any combination of these&#8221; – see Catherine Harris and Bonnie Flaws&#8217; article, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=15f447d668&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Kiwibuild should build more rental properties economist Shamubeel Eaqub says</a>.</p>
<p>The same article also draws attention to the Government&#8217;s progress on establishing Urban Development Authorities (&#8220;UDAs have the power like the NZ Transport Authority to use the Public Works Act if necessary to confiscate land&#8221;), and the promise to establish some sort of &#8220;shared equity scheme&#8221; for new home buyers.</p>
<p>In terms of possible rent-to-own schemes, it&#8217;s worth reading Stephen Forbes&#8217; <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=e11369aa6c&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">The Labour-Greens confidence &amp; supply agreement promotes &#8216;progressive&#8217; housing ownership models</a>.</p>
<p>Here&#8217;s the key part: &#8220;Under the confidence and supply agreement between the Greens and Labour, both parties agreed to develop a rent-to-own scheme, or a similar progressive ownership model, as part of the KiwiBuild programme. Despite comments from minister for housing and urban development Phil Twyford last year that the Government was looking at the feasibility of shared equity housing, no details have been officially announced to date.&#8221;</p>
<p>But is the problem of the housing affordability crisis even one of supply? This is apparently what KiwiBuild is predicated on, and Peter Lyons challenges this in his column, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=8d3ef73bc7&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Housing issue more complex than Govt might have thought</a>.</p>
<p>Finally, is the Labour-led Government even inclined to fix KiwiBuild? Chris Trotter has written an extensive and insightful column about how the KiwiBuild scheme was created specifically within Labour to uphold neoliberal or conservative policy settings, and therefore there will be little appetite amongst the &#8220;Labour right&#8221; to bring about a housing programme based on &#8220;transformation&#8221; or &#8220;kindness&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=8d24a95d3c&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">On how middle class housing subsidies overwhelmed the social housing priorities of the Labour Party&#8217;s rank-and-file members</a>.				</p>
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		<title>Bryce Edwards&#8217; Political Roundup: Is KiwiBuild now KiwiBusted?</title>
		<link>https://eveningreport.nz/2019/01/25/bryce-edwards-political-roundup-is-kiwibuild-now-kiwibusted/</link>
		
		<dc:creator><![CDATA[Bryce Edwards]]></dc:creator>
		<pubDate>Thu, 24 Jan 2019 23:14:06 +0000</pubDate>
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		<guid isPermaLink="false">https://eveningreport.nz/?p=20145</guid>

					<description><![CDATA[Political Roundup: Is KiwiBuild now KiwiBusted? by Dr Bryce Edwards Is the Labour-led Government &#8220;disconnected from reality&#8221; over its fledgling house-building programme? KiwiBuild minister, Phil Twyford, says he is &#8220;pretty gutted&#8221; by his realisation that the house building agenda will fail to get anywhere near its targets this year.  It&#8217;s merely the latest in a ]]></description>
										<content:encoded><![CDATA[<p class="null"><strong>Political Roundup: Is KiwiBuild now KiwiBusted?</strong></p>
<p>by Dr Bryce Edwards</p>
<p><strong>Is the Labour-led Government &#8220;disconnected from reality&#8221; over its fledgling house-building programme? KiwiBuild minister, Phil Twyford, says he is &#8220;pretty gutted&#8221; by his realisation that the house building agenda will fail to get anywhere near its targets this year. </strong></p>
<p><strong>It&#8217;s merely the latest in a long-line of bad publicity, stuff-ups, and questions for the Kiwibuild scheme. And this will have many voters and aspiring home-owners losing confidence in the Government&#8217;s housing plans. And inevitably KiwiBuild is once again picking up new nicknames – such as &#8220;KiwiBusted&#8221;, &#8220;KiwiFraud&#8221;, or Simon Bridges&#8217; chosen term, &#8220;KiwiFlop&#8221;.</strong></p>
<figure id="attachment_18719" aria-describedby="caption-attachment-18719" style="width: 619px" class="wp-caption aligncenter"><a href="https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild.jpg"><img decoding="async" class="size-full wp-image-18719" src="https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild.jpg" alt="" width="619" height="349" srcset="https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild.jpg 619w, https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild-300x169.jpg 300w" sizes="(max-width: 619px) 100vw, 619px" /></a><figcaption id="caption-attachment-18719" class="wp-caption-text">Kiwibuild homes.</figcaption></figure>
<p><strong>Disconnected from reality?</strong></p>
<p>It was only a few months ago that Phil Twyford was laying into critics and even government officials who suggested KiwiBuild might not deliver the promised number of houses on time. For example, when Treasury forecast that Kiwibuild was only going to have half its forecast impact on construction, Twyford rebuked the officials, saying &#8220;Some of these kids in Treasury are fresh out of university, and they are completely disconnected from reality&#8221;.</p>
<p>Now Twyford has had his own reality check, and yesterday told media that he wasn&#8217;t going to be able to deliver on promised Kiwibuild numbers for this year. While the Government is promising 100,000 affordable KiwiBuild houses, the target for July of this year is only 1000, of which only 33 appear to have eventuated.</p>
<p>This is all best covered by Henry Cooke in his news report, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=2a80b4fcef&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Phil Twyford says only 300 KiwiBuild homes are due to be finished by July</a>, which quotes the minister saying &#8220;It&#8217;s clear now that we won&#8217;t meet our first year target, and that&#8217;s a real disappointment to me&#8230; It&#8217;s been tougher than we expected for the first year.&#8221;</p>
<p>In this story, Opposition spokesperson Judith Collins is trenchant in holding Twyford to account: &#8220;He clearly cannot do the job. He&#8217;s been a minister since November of 2017 and delivered 33 homes – in that same time the private sector has built 35200&#8230; He&#8217;s got no excuse because he had this portfolio in opposition for over six years. He should have worked out how hard it is to have interventions in the property market.&#8221;</p>
<p>Although the Government has promised 1000 houses by July of this year, Twyford isn&#8217;t confident enough that they will even deliver 500, according to Jenna Lynch, who also reveals that some KiwiBuild houses aren&#8217;t selling to first home buyers and are being released onto the market, &#8220;defeating the whole point of the programme&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=fe9b877acd&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild houses might not end up with first home buyers</a>.</p>
<figure id="attachment_3025" aria-describedby="caption-attachment-3025" style="width: 200px" class="wp-caption alignleft"><a href="https://eveningreport.nz/wp-content/uploads/2015/04/Phil-Twyford.jpg"><img loading="lazy" decoding="async" class="size-medium wp-image-3025" src="https://eveningreport.nz/wp-content/uploads/2015/04/Phil-Twyford-200x300.jpg" alt="" width="200" height="300" /></a><figcaption id="caption-attachment-3025" class="wp-caption-text">Phil Twyford.</figcaption></figure>
<p>Twyford has been joined by both Prime Minister Jacinda Ardern and Finance Minister Grant Robertson in conceding defeat on the KiwiBuild numbers, but Acting Prime Minister Winston Peters isn&#8217;t giving up – see Jason Walls&#8217; <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=b0f862e18d&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Deputy Prime Minister Winston Peters still thinks 1000 KiwiBuild houses can be built by July</a>.</p>
<p>Having been asked about the targets, Peters told reporters today: &#8220;We&#8217;re not giving up at all – we&#8217;ve got six months to wind this up as fast as we can, and practically we will.&#8221; He added: &#8220;We&#8217;re going to recommit ourselves in our first Cabinet meeting to getting this thing back on track.&#8221;</p>
<p><strong>Ongoing problems with KiwiBuild</strong></p>
<p>In explaining KiwiBuild&#8217;s failure to reach its targets, Phil Twyford appears to be pointing the finger at the construction industry and developers. He said yesterday that &#8220;It&#8217;s been more difficult than we expected to really shift developers off their existing business model which is about getting a return on capital from small numbers of mid to high end homes.&#8221;</p>
<p>The Minister also talked about this last year in an interview with Newsroom&#8217;s Thomas Coughlan, in which he characterised setbacks as merely &#8220;teething problems&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=a38c1a43d8&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Twyford on his hopes for 2019</a>. Apparently, Twyford &#8220;believes the teething issues have come from the state of the residential construction sector, which is dominated by small firms, with low productivity, who are incentivised to build expensive rather than affordable homes.&#8221;</p>
<p>There are some other problems with the KiwiBuild scheme. Anne Gibson, for example, looks at some of the figures listed on KiwiBuild&#8217;s official website and finds that although 46,807 people registered as being interested in KiwiBuild, only 267 have actually become &#8220;pre-qualified&#8221; to purchase a house – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=2fdd61574e&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild monitor: 33 complete, 967 to go by July, Twyford says target &#8216;tough&#8217;</a>.</p>
<p>In response to the low numbers of eligible buyers, Mike Hosking wrote last year about these figures: &#8220;You would have heard of the thousands that applied, of course. The Government wanted you to hear that. The thousands that signed up for the updates, the thousands that showed an interest. But an interest isn&#8217;t a deposit, it isn&#8217;t a deal, and it certainly isn&#8217;t a sale&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=2398affa60&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">So where&#8217;s all the KiwiBuild buyers then?</a></p>
<p>Hosking has also written earlier this week on the housing programme, summing up the alleged failings of the scheme, so far: &#8220;the homes that aren&#8217;t built, the homes that don&#8217;t sell, the tenders that don&#8217;t attract bidders, the prices that are too high, the locations that don&#8217;t parent right, the sizes that don&#8217;t suit&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=ebe96935bf&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">New Year, same old KiwiBuild stuff-ups</a>.</p>
<p>In this column Hosking looks at the mystery surrounding ex-KiwiBuild CEO Stephen Barclay, who has resigned. He comments: &#8220;yet another cock-up in a long line of cock-ups that&#8217;s plagued this grandiose farce since day one.&#8221; And he complains that &#8220;no one is fronting in terms of just what has gone wrong&#8221;.</p>
<p>There is plenty of speculation about why Barclay has stepped down. For the most plausible, see economist Gareth Kiernan&#8217;s article, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=f18e4d50b4&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Resignation another step to KiwiBuild failure</a>. He suggests that perhaps Barclay had his &#8220;wings clipped&#8221; with the organisational re-configuration that happened last year in the KiwiBuild programme. And if so, &#8220;the prospects of getting a new head of KiwiBuild with the initiative to turn Phil Twyford&#8217;s dreams into reality seem slimmer than ever&#8221;.</p>
<p><strong>What happens next?</strong></p>
<p>Given the apparent mess that the KiwiBuild programme is in, should it be scrapped? Should the Government go back to the drawing board? Or should the Minister responsible be sacked?</p>
<p>Unsurprisingly, Judith Collins is calling for Twyford to go. She was on TVNZ&#8217;s Breakfast today giving advice to the Prime Minister: &#8220;I would say to Jacinda Ardern, a bit of advice for someone who has been in politics a little bit longer, to shift Phil at her next reshuffle because if she doesn&#8217;t I&#8217;m going to have so much fun over the next year&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=7a86adae93&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Judith Collins: Ardern should dump Twyford over KiwiBuild – &#8216;If she doesn&#8217;t, I&#8217;m going to have fun&#8217;</a>. Collins also forecasts KiwiBuild&#8217;s &#8220;demise inside 12 months&#8221;.</p>
<p>On The AM Show, Duncan Garner suggested Twyford needed to go, saying &#8220;you&#8217;ve flopped Phil&#8230; In any other world, Phil Twyford would be dog-tucker, out&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=d8ac6d2243&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Duncan Garner lets rip on &#8216;toxic&#8217; KiwiBuild not hitting targets</a>. But, despite the &#8220;poisonous&#8221; failure of KiwiBuild, he says that Twyford will be &#8220;protected for now&#8221;.</p>
<p>Garner also suggests that the Labour-led Government needs to look again at the whole KiwiBuild programme: &#8220;Freeze this policy, rethink it, even ditch it, it&#8217;s been changed so much anyway who knows what it even stands for now.&#8221;</p>
<p>Over on Newstalk ZB, Mike Hosking declared that the minister is &#8220;deluded&#8221; and &#8220;so far out of their depth it&#8217;s dangerous&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=98bcee39f3&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild fiasco is far from over</a>.</p>
<p>But there&#8217;s also a fair bit of praise for Twyford: &#8220;I tell you what I do admire about Phil Twyford, the embattled, bewildered Housing Minister: At least he fronts. He fronted with me yesterday, and took a pasting because you can&#8217;t hide or argue your way around the cluster or calamity of facts and the avalanche of bad news that&#8217;s fallen down on top of him. But at least he is there to actually fight his corner. Many people these days run and hide. I also admire him for bulldozing over the Unitary Plans in places, like Auckland, where for years councils have refused to make enough land available for building.&#8221;</p>
<p>So, should Twyford be sacked? The Spinoff&#8217;s Alex Braee writes about the issue today, and he agrees that the Minister deserves to be fired, pointing out that Twyford&#8217;s mistakes are worse than those of sacked minister Clare Curran: &#8220;This failure is vastly more serious, both in political perception terms, and in terms of how much of a real world impact it has&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=c1da039e5e&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Kiwibuild set to fail at first hurdle</a>.</p>
<p>Yet Braae declares that it is better that Twyford stays: &#8220;Perhaps a more fitting punishment for Mr Twyford, after presiding over a horrendous botch of one of the government&#8217;s most important policies, would be that he has no choice but to continue. Then again, there&#8217;s a cabinet reshuffle expected early this year, so someone else might find themselves with the nightmare job of fixing this.&#8221;</p>
<p>Finally, despite all the criticism and pessimism about Kiwibuild, there are still some enthusiasts pointing out the arguments in its favour. For the best effort, see Barnaby Bennett&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=54b608c1fd&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">What almost everyone is missing about KiwiBuild</a>.				</p>
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		<title>Bryce Edwards&#8217; Political Roundup: The Political left is turning against KiwiBuild</title>
		<link>https://eveningreport.nz/2018/11/03/bryce-edwards-political-roundup-the-political-left-is-turning-against-kiwibuild/</link>
		
		<dc:creator><![CDATA[Bryce Edwards]]></dc:creator>
		<pubDate>Sat, 03 Nov 2018 04:58:27 +0000</pubDate>
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		<guid isPermaLink="false">https://eveningreport.nz/?p=18718</guid>

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<h1 class="null"><strong>Bryce Edwards&#8217; Political Roundup: The Political left is turning against KiwiBuild</strong></h1>


[caption id="attachment_13635" align="alignleft" width="150"]<a href="https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1.jpeg"><img loading="lazy" decoding="async" class="size-thumbnail wp-image-13635" src="https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-150x150.jpeg" alt="" width="150" height="150" srcset="https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-150x150.jpeg 150w, https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-300x300.jpeg 300w, https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-65x65.jpeg 65w, https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1.jpeg 400w" sizes="auto, (max-width: 150px) 100vw, 150px" /></a> Dr Bryce Edwards.[/caption]
<strong>Is KiwiBuild &#8220;a dog&#8221;? Labour&#8217;s parliamentary opponents were always going to hone in on the problems and contradictions of the scheme, but what&#8217;s interesting and telling is the criticism of the scheme is now also coming from the political left, with a building consensus that KiwiBuild is not up to the scale of the task required by the current housing crisis.</strong>
<strong>Yesterday, leftwing political commentator Chris Trotter published his weekly Otago Daily Times column criticising the scheme, and explaining why it&#8217;s become &#8220;a dog&#8221;. He argues that &#8220;tragically&#8230; the Coalition Government is selling the poor a pup&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=c62755a407&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild should be targeting the poor</a>.</strong>
[caption id="attachment_18719" align="aligncenter" width="619"]<a href="https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild.jpg"><img loading="lazy" decoding="async" class="size-full wp-image-18719" src="https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild.jpg" alt="" width="619" height="349" srcset="https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild.jpg 619w, https://eveningreport.nz/wp-content/uploads/2018/11/Kiwibuild-300x169.jpg 300w" sizes="auto, (max-width: 619px) 100vw, 619px" /></a> Kiwibuild homes.[/caption]
<strong>Trotter&#8217;s main criticism</strong> of the scheme is that it does little or nothing to deal with the housing crisis, and is targeted to give assistance to the wrong people: &#8220;Nowhere are Labour&#8217;s ambitions for KiwiBuild matched by the resources needed to fulfil them. Worst of all, the people most in need of 100,000 extra dwellings – beneficiaries and the working poor – are not the scheme&#8217;s targets. KiwiBuild is a perverse mixture of corporate and middle-class welfare, offering a handsome subsidy to builders and a generous hand-up to young professionals.&#8221;
He explains that the concept for Kiwibuild was dreamed up under the leadership of David Shearer, as a way of out-manoeuvring leadership rival David Cunliffe. There was never any &#8220;necessary detailed development work on how it would be implemented, by whom, and at what cost&#8221;, because it was always just a political tool rather than a serious attempt to improve society.
He also criticises the scheme for morphing into something that, rather than creating extra housing, just repurposes housing already being built by private developers who have got into financial trouble: &#8220;Twyford is willing to buy Labour&#8217;s promised houses straight off the property developers&#8217; plans. At a stroke, bad financial bets are transformed into sure things. Phil&#8217;s happy. The developers are happy. The banks are happy. And the winners of KiwiBuild ballots are over the moon. About the only people who aren&#8217;t happy are those who believe that publicly funded social interventions on the scale of KiwiBuild should be directed first to those most in need.&#8221;
Even the pro-Government blogsite, The Standard, is publishing criticisms of the scheme – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=d46b6ffeb9&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild doesn&#8217;t fly</a>. According to this critique, the Government is effectively privatising &#8220;state housing land&#8221;, to be used by private developers and the KiwiBuild scheme, meaning that most of the land will be for privately-owned houses. It says John Tamihere is correct in his call that development on state housing land in Mangere is akin to &#8220;social engineering&#8221;.
It&#8217;s &#8220;probably time to call the Government&#8217;s flagship KiwiBuild programme for what it is – state sponsored gentrification of state housing suburbs&#8221; according to Salvation Army economist Alan Johnson. He explains that many of the KiwiBuild projects are actually being built on state housing land, which is meant for social housing – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=914ae98915&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Call it KiwiBuild but it is still gentrification</a>.
At the moment in Auckland, state houses are being demolished in three different locations (Mangere, Mt Roskill and Northcote), and being replaced mostly privately-owned houses.
Johnson says: &#8220;Added all up the three big urban re-development projects in state house suburbs being promoted by Government seem likely to involve the demolition of 6050 state houses and the construction of up to 20,000 new dwellings.  Of these around 6500 will be state or social housing units.&#8221; Clearly the Government isn&#8217;t prioritising state housing at the moment, and is even selling off much of the necessary state housing land.
Similarly, the &#8220;massive $1.5 billion regeneration project for Porirua&#8221; announced this week, involves selling off state housing land for private houses. The Government&#8217;s announcement that there will be over 2000 houses on the market has overshadowed the fact that there will only be 150 more state houses than before.
This has other leftwing critics alarmed. Blogger Martyn Bradbury concludes: &#8220;Kiwibuild is like the Labour party – it&#8217;s for the children of the white middle classes. That&#8217;s fine and dandy, but let&#8217;s dump the illusion that this is helping the poor and until the new Government do something meaningful on state houses (building 1000 state houses per year isn&#8217;t meaningful), they should be savaged ruthlessly and relentlessly for this&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=f7573aa03a&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Surprise, surprise – Kiwibuild is for the children of the white middle classes</a>.
Perhaps the political left shouldn&#8217;t be surprised that KiwiBuild isn&#8217;t aimed at the poorest in our society. After all, the modern Labour Party is more focused on winning middle-class voters. As Martin van Beynen explains today, Kiwibuild&#8217;s targeting of more well-off New Zealanders is actually by design: &#8220;There was another important benefit for Labour in the Papakura welcome. It has made it look like more of a middle-class party&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=a99372a07e&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Housing crisis – Method in Labour&#8217;s KiwiBuild madness</a>.
He explains the electoral calculation behind Labour&#8217;s policy making: &#8220;The poor and the strugglers will always vote Labour or for some one man-cult like NZ First. So that vote is sort of guaranteed and spending some money on social housing is preaching to the choir&#8230; It is the middle that decides who governs. The house welcome showed that Labour is not only a party for strugglers. It showed it was awake to the aspirations of young, middle-class achievers who were battling to afford a home in unaffordable Auckland.&#8221;
Of course, the Government has replied to its leftwing critics, pointing out that such disappointment with Kiwibuild is misplaced, as it was never intended to be a scheme for the poor or homeless. And they point to Housing New Zealand and state housing as other parts of the equation working to fix the housing crisis.
The problem is, Kiwibuild was sold by Labour during the election as their response to the housing crisis. Yes, there might have been some fine print to suggest otherwise, but that was the impression that Labour deliberately used to win a lot of votes. As yesterday&#8217;s New Zealand Herald editorial stated, &#8220;Twyford must carry much of the blame for that false impression which dates from last year&#8217;s election campaign when he put housing affordability and homelessness into the same breathless &#8216;crisis&#8217;.&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=394f92d303&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild houses never for the poor</a>.
Similarly, Labour has sought to associate the introduction of Kiwibuild with the imagery and symbolism of the first Labour Government&#8217;s massive state housing builds, even appropriating Michael Joseph Savage for the task. As Jane Clifton says in her Listener column this week, &#8220;KiwiBuild was rhetorically styled as Savage&#8217;s second coming&#8221;.
Leftwing critics are pointing to the lack of state housing being planned by this government and have started to protest against the Kiwibuild programme, or at least signal their concerns. For example, Auckland Action Against Poverty held a protest last weekend against the street party launch of the first Kiwibuild properties sold in Papakura – see Scott Palmer&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=470238a1df&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild &#8216;not aimed at low-income families&#8217; – Phil Twyford</a>.
Protest coordinator, Ricardo Menendez, is quoted saying that KiwiBuild will &#8220;further exacerbate the housing crisis&#8221;, and that &#8220;With a price-tag of half a million dollars, KiwiBuild homes are a future speculator&#8217;s dream.&#8221; Similarly, on Twitter he&#8217;s suggested: &#8220;KiwiBuild maybe should be renamed KiwiSpeculator, as it&#8217;s just an entryway for high income earners into the housing market to then become property speculators.&#8221;
Another community group, Monte Cecilia, which is a social housing provider, has been highly critical of the way the Government is organising state housing and KiwiBuild. The housing trust&#8217;s chief executive Bernie Smith gave the annual Bruce Jesson lecture at the University of Auckland last month, in which he condemned the government for taking &#8220;short cuts&#8221; to tackle New Zealand&#8217;s housing crisis, arguing, &#8220;We need to stop pulling rabbits out of hats and looking for quick fixes&#8221; – see Teuila Fuatai&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=f9b2d9c869&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild: a &#8216;community trainwreck&#8217;</a>.
Finally, for more comment on the KiwiBuild scheme, see my blog post, <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=08660844b2&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Cartoons about Labour&#8217;s KiwiBuild and the housing crisis</a>.]]&gt;				</p>
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		<title>Bryce Edwards&#8217; Political Roundup: Kiwibuild is now &#8220;socialism for the rich&#8221;</title>
		<link>https://eveningreport.nz/2018/07/05/bryce-edwards-political-roundup-kiwibuild-is-now-socialism-for-the-rich/</link>
		
		<dc:creator><![CDATA[Bryce Edwards]]></dc:creator>
		<pubDate>Thu, 05 Jul 2018 04:23:54 +0000</pubDate>
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<p class="null"><strong>Bryce Edwards&#8217; Political Roundup: Kiwibuild is now &#8220;socialism for the rich&#8221;</strong></p>


[caption id="attachment_13635" align="alignleft" width="150"]<a href="https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1.jpeg"><img loading="lazy" decoding="async" class="size-thumbnail wp-image-13635" src="https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-150x150.jpeg" alt="" width="150" height="150" srcset="https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-150x150.jpeg 150w, https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-300x300.jpeg 300w, https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1-65x65.jpeg 65w, https://eveningreport.nz/wp-content/uploads/2016/11/Bryce-Edwards-1.jpeg 400w" sizes="auto, (max-width: 150px) 100vw, 150px" /></a> Dr Bryce Edwards.[/caption]
<strong>If there was any excitement brewing at being able to enter a lottery to buy an affordable Kiwibuild house, it was certainly short-lived, as further details revealed that the &#8220;lottery of birth&#8221; has probably already scuttled most people&#8217;s chances. Disappointment is setting in as more people realise that the scheme is really only going to benefit the rich. This is because the houses are priced so high that few will be able to afford to even enter the final ballot for them. What&#8217;s more, many are asking why the income caps have been pitched so high that the scheme seems destined to be dominated by rich buyers who are after a good investment. </strong>
<strong>Complaints about the new &#8220;income cap&#8221;</strong>
[caption id="attachment_2652" align="aligncenter" width="640"]<a href="https://eveningreport.nz/wp-content/uploads/2015/03/Rural-Northland-poverty.jpg"><img loading="lazy" decoding="async" class="wp-image-2652 size-large" src="https://eveningreport.nz/wp-content/uploads/2015/03/Rural-Northland-poverty-1024x683.jpg" alt="" width="640" height="427" /></a> Rural Northland poverty in the spotlight. Image courtesy of Localbodies-bsprout.blogspot.co.nz.[/caption]
<strong>With the official launch yesterday of the Kiwibuild lottery scheme,</strong> Housing Minister Phil Twyford announced the criteria for those who want to enter the ballot to be the lucky recipients of houses that will be &#8220;sold at cost&#8221;. The criteria now includes a cap on income so that buyers wouldn&#8217;t include millionaires, as critics had started to allege.
The income cap – $180,000 annual income for a couple and $120,000 for singles – was widely derided as being far too high, as it would continue to allow the wealthy to monopolise the scheme. Newshub&#8217;s Jenna Lynch was highly critical: &#8220;in effect there is no real income cap. Only the top eight per cent won&#8217;t be able to buy these homes. It&#8217;s a free for all. This is not going to help those on low or middle incomes &#8211; they&#8217;ll be locked out by relatively high wage earners&#8221; – see her column: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=510b88f8ea&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Kiwibuild a free for all</a>.
Lynch also criticises the lack of asset-testing for Kiwibuild homebuyers: &#8220;Further there&#8217;ll be no asset checks for those buying a first home meaning so long as your income is below the caps, you could have millions locked away in assets other than housing and still be eligible to get the keys to a Kiwibuild house&#8221;.
According to Stuff journalist Henry Cooke, the &#8220;sky-high income cap&#8221;, together with any lack of &#8220;weighting for need or income like there is for state houses&#8221;, means the rich will benefit the most: &#8220;Needy families who could really use the help will be out in the cold hard private rental market while a couple of doctors making $80k each will happily move into a nice new home&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=d362a646d0&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Why the Government is letting the rich buy KiwiBuild homes</a>.
But Cooke reports that there is some logic behind this &#8220;socialism for the rich&#8221; approach. First, Twyford argues that there will be a trickle-down effect whereby the rich buying the Kiwibuild houses will eventually benefit the poor through other houses becoming cheaper (or just not getting more expensive).
Second, there&#8217;s the need, electorally, for Labour to keep the rich happy, with the idea that Kiwibuild is also for them: &#8220;Setting the income cap so high also invites quite a lot of middle-class buy-in. A whole lot of well-off people who assumed they would never get Government help to buy a home would have woken up on Wednesday morning to a pleasant surprise. Just like Superannuation and free education before it, making a policy universal (or close to it) buys you a lot of voters who have an interest in never seeing a policy die.&#8221;
Third, there&#8217;s a likelihood that the Government will actually need rich people to be buying the houses, given that they will be unaffordable for most others. Cooke says, &#8220;One of the worst possible outcomes for Twyford is that he does build these houses and then they sit empty.&#8221;
This is an argument examined in detail today by Newsroom&#8217;s Thomas Coughlan, who delves into the official demographic statistics, and MBIE documents, to work out who might be actually able to afford the Kiwibuild houses. He appears to conclude that the Kiwibuild houses are simply going to be too expensive for most buyers, and that&#8217;s why the income cap has to be so high – so as not to exclude those most likely to buy the houses. But even then, there could be a problem selling the houses, as most high-income people already own property – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=d6d52d88cb&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Twyford&#8217;s &#8216;middle-class aspirational&#8217; plan</a>.
<strong>Excluding the poor and average income New Zealanders</strong>
There&#8217;s a line being run by the Government that the lottery-element of Kiwibuild is a great equaliser – because poor applicants have just as much chance of having their name picked as rich applicants. Twyford has said &#8220;Everyone has an equal shot in the ballot so people who are on a low income, or a high income, as long as they fit the criteria &#8230; then they can have a crack at doing this&#8221; – see Jane Patterson&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=7bf1c55671&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Ballot will keep Kiwibuild equal, Twyford says</a>.
On this, Alex Braae of The Spinoff says &#8220;It&#8217;s a classic case of equality triumphing over equity – the IT professional flatting in Grey Lynn and earning $100,000 a year has the same chance of getting a house as the solo mum working two jobs to keep the rent payments coming through&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=08e4cdd34c&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Can you buy a Kiwibuild house?</a>
It is certainly reminiscent of Anatole France&#8217;s famous aphorism about &#8220;legal egalitarianism&#8221; that &#8220;in its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets, and steal loaves of bread&#8221;. The point being that any low or average income earner is free in theory to apply for the lottery but, in practice, most won&#8217;t be able to. As Brad Flahive reports, &#8220;In order to enter the ballot you also need proof that a bank is willing to loan you the money needed&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=dcbf676ac0&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild: How to get yourself in the running for the Government&#8217;s new homes</a>.
Flahive produces calculations for various income scenarios of people who might be able to afford a Kiwibuild house, and shows that they will need to pay about 45 per cent of their weekly income on the mortgage repayments. And once you add other housing ownership costs on top of that (insurance, maintenance, etc), in reality it would be very difficult for many to obtain bank approval to enter the ballot.
On the issue of who banks will lend to, Henry Cooke reports that banks will only lend to those who already have large deposits: &#8220;Jenny Campbell from The Mortgage Supply said many banks wouldn&#8217;t be keen to lend out 90 per cent of the value of one of the homes because of the stringent rules around on-selling&#8221; – see: <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=c9944703e4&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild houses won&#8217;t sell with 10 per cent deposits, says broker</a>.
<strong>Kiwibuild&#8217;s three-year non-sale rule</strong>
It&#8217;s this rule that prevents the buyer from being able to sell the house within three years of purchase that is the main problem for the banks according to Henry Cooke: &#8220;The idea is essentially that if a buyer defaults, anything that restricts banks from selling or renting out the property makes the mortgage riskier.&#8221; He reports Campbell from The Mortgage Supply company as criticising the Government for not consulting the lending industry over the issue. But Twyford says that he hasn&#8217;t been told of any such concerns by banks.
The &#8220;three-year rule&#8221; exists to prevent investors simply buying the Kiwibuild houses at cost and then on-selling them quickly at market rates and making a large capital gain. But many critics suggest that three-years is far too short, and rich purchasers will be enabled to easily make money out of Kiwibuild. For example, Alex Braae comments: &#8220;That might not sound like very long at all, but think about it this way – it&#8217;s more than 1,000 whole days. After that, sweet as, flip away.&#8221;
Jenna Lynch also points out that the three-years is much shorter than Labour&#8217;s capital gains housing rule: &#8220;three years isn&#8217;t even the benchmark for how long genuine homebuyers should hold onto a home. It&#8217;s two years less than the government&#8217;s bright line test – the pseudo-capital gains tax introduced to curb property speculation. Smart young investors will see this policy for what it is – an opportunity for them to get their foot on the property ladder, exploit a government system and put them one step ahead of their peers.&#8221;
In Jane Patterson&#8217;s report Phil Twyford explains why he&#8217;s chosen three years: &#8220;we didn&#8217;t want to put in place anything too onerous or too heavy handed&#8221;. And Twyford told the media yesterday that the chosen time-period is a &#8220;Goldilocks&#8221; one: &#8220;it&#8217;s not too hot and it&#8217;s not too cold – three years is just about right in terms of an obligation to live in the house&#8221;.
<strong>Can Kiwibuild be made more progressive?</strong>
At the moment, it seems that the way Kiwibuild is configured, poor and middle-income earners will be locked out from the chance of being homeowners. In fact, the scheme might even worsen inequality in New Zealand. Researcher Jessica Berentson-Shaw says: &#8220;giving only some people the opportunity to own a home may embed inequalities that have been in place for decades in New Zealand&#8221; – see:<a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=88e3d9097c&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer"> KiwiBuild risks embedding wealth and housing inequalities</a>. She argues &#8220;our homes have become a money-making scheme for the wealthy&#8221;, and Kiwibuild won&#8217;t do anything to change that.
Twyford has responded to such criticisms by asserting that Kiwibuild was never meant to be anything other than what it is. He told the NBR: &#8220;KiwiBuild is not a welfare policy – it&#8217;s a middle-class homeownership policy&#8230; It&#8217;s been designed to restore the dream of affordable homeownership to people who traditionally up until the last decade or so have quite rightly expected that they would have a decent chance to own their own home&#8221; – see Dane Ambler&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=91e0d07eb8&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">&#8216;Kiwibuild is not a welfare policy&#8217;: Twyford defends eligibility criteria</a> (paywalled).
However, this article also quotes Real Estate Institute chief executive Bindi Norwell making a plea for Kiwibuild to be more equitable: &#8220;One modification that we would like to see, however, is a percentage of the properties to be allocated to low-income earners&#8230; This would ensure those who really need it the most, for example, a single parent working two part-time jobs to support a family, will have a higher chance of having his or her name pulled out of the ballot than a single person earning $120,000&#8221;.
Others are calling for the income cap to be lowered, and for the non-sale period to be increased significantly. For example, Tauranga mayor Greg Brownless has proposed that buyers should have to live in the Kiwibuilds for ten years, because that would get rid of &#8220;any chance of people doing it just to profit&#8221; – see Scott Yeoman&#8217;s <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=e356988cde&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">Tauranga&#8217;s mayor and builder query KiwiBuild eligibility criteria</a>.
In addition, &#8220;He said the purpose of KiwiBuild should be to help people with combined incomes of &#8216;way less than $100,000&#8242; and with single incomes of around $50,000 to $60,000 or less.&#8221;
Even the National Party appears to be proposing a more progressive alternative to Kiwibuild. Housing spokesperson, Amy Adams says that National&#8217;s &#8220;First Home Buyers policy&#8221; would have an income cap of only $130,000 for couples, and $80,000 for an individual, and buyers would have to live in the houses longer before selling them – see Jason Walls&#8217; <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=31ce3997c1&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">The Opposition&#8217;s Finance Spokeswoman has slammed the combined income limit of would-be KiwiBuild homeowners</a>.
Finally, for a more radical view on how Kiwibuild could be transformed into a programme that benefits low and middle-income New Zealanders – see Shamubeel Eaqub&#8217;s just-published column <a href="https://criticalpolitics.us16.list-manage.com/track/click?u=c73e3fe9e4a0d897f8fa2746e&amp;id=b0aef60f99&amp;e=c5a5df3a97" target="_blank" rel="noopener noreferrer">KiwiBuild a win for higher-income households</a>.]]&gt;				</p>
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