''Moments away; a world apart.'' So coos the
sugar-encrusted but hollow-sounding real estate-speak intent
on seducing home buyers and hard-headed investors into
succumbing to the charms of life at Hobsonville Point.
According to the project's advertising bumph, a world-class
township for Aucklanders of ''all ages and stages'' is being
built on 167ha of Crown land nestled on the Waitemata Harbour
in the city's northwest.
Well, not all Aucklanders it seems. In spite of a Cabinet
decision in October 2011 confirming longstanding intentions
that there should be provision for state housing among the
3000 or so homes in the development, officials from the
building and housing section of the Ministry of Business,
Innovation and Employment last year deemed the commercial
case for the Hobsonville project ''does not envisage'' the
building of state houses.
The officials considered their decision was ''appropriate and
consistent'' in part because the high land value would make
for expensive state houses for which there was not high
demand in that part of Auckland.
Housing New Zealand's ''customers'' would have to be
''imported'' into the area. Moreover, Hobsonville's
''peripheral'' location and the lack of local jobs did not
square with National's efforts to get beneficiaries back to
Whither the welfare state? National has already initiated a
slow, but steady shift in the provision of social housing to
At Hobsonville, the real reason why state rental housing was
dropped was because of the Government's need to be seen to be
doing something about housing affordability further up the
income scale while maintaining the development's commercial
The role of the State now is not to replace market
mechanisms, but instead be a back-stop when the market fails
Both major parties are using the State in different ways to
develop policy which helps not so much those on low incomes,
but those on low to middle incomes into home ownership. The
reason? Housing unaffordability has reached that
middle-income band. That is also where the great mass of
The linchpin for Labour's plan - on to which the Greens have
piggy-backed - is the building of 100,000 affordable homes
over 10 years at an average cost of $300,000 each.
National might have succeeded in casting doubt on the
likelihood of Labour managing to deliver at that price.
especially in Auckland, but the scale of Labour's plan has
gone down well with the punters. They are realistic enough to
know the $300,000 figure is bound to change.
National will have to find other avenues for attack, such as
Labour relying on Government borrowing to kick-start its
ambitious housing programme. Labour says its scheme will
become self-financing. But the real question is the extent to
which the plan is subsidised by the taxpayer.
National, likewise, is keen to avoid any impression its
decision to make 10% of the homes at Hobsonville Point
''affordable'' by using different designs and pricing them at
less than $400,000 amounts to a subsidy. The relevant Cabinet
papers are at pains to avoid admitting there are any
''direct'' subsidies, but there is plenty of evidence of
Along with the construction and revamp of state housing at
Glen Innes, the creation of affordable housing at Hobsonville
is seen by National as a model for further developments on
Crown-owned and other land across Auckland.
National's problem is that Labour has upped the ante in the
debate considerably. In announcing the building of a host of
less than $400,000 homes at Hobsonville on the eve of last
November's Labour Party conference, National must have
thought it had trumped anything Mr Shearer could come up with
in his leader's speech two days later.
The reverse was the case. The favourable reception accorded
to Labour's policy has put the blow-torch on National to get
more housing developments under way before next year's
That is why National is talking tough and warning local
government it will not tolerate inertia when it comes to
freeing up land for housing and speeding up approval of
National has to go for broke. It can rubbish Labour's scheme
all it likes, but Labour's advantage is that its plan is not
actually in operation, so it is difficult to judge whether it
would work or not.
It is much easier to pass verdict on the Greens' new
''rent-to-buy'' housing package. The policy would see
low-income families occupy new, Government-built $300,000
dollar homes without having to stump up a deposit or take out
Those families would instead be required to make a $200
weekly payment to the Government to cover the interest cost
on the Crown capital used to build the house. The occupiers
would have the option of making additional payments to
purchase more and more equity in their home.
The Greens won't say how many such houses they want to build.
They say the scheme would complement Labour's plan, with the
Greens' share of those 100,000 homes being decided during
coalition negotiations. The policy is easy to comprehend. Its
generosity makes it extremely attractive. It seems to make
Wrong. It is a dog of a policy. The slow repayment of capital
by occupiers of the Green's scheme would require the
Government going on a continual borrowing binge. There would
be huge problems in terms of fairness in terms of cut-off
points for eligibility.
There is no incentive or requirement to pay off capital.
Occupiers would have the house for life and enjoy cheap rent
at $200 a week. It is unclear whether that payment would
increase and by how much when interest rates increased. It is
unclear who would pay the rates along with general
mainten-ance. Labour's scheme at least imposes the discipline
on buyers to maintain the value of their properties by
requiring them to take out a mortgage.
Labour has officially welcomed the Greens' contribution to
the affordable housing debate. Labour should instead
quarantine this Nightmare on Struggle Street before it taints
its own policy by association.
John Armstrong is The New Zealand Herald