Unsurprisingly, the Government's state housing sale to the Salvation Army fell over. And so it should as it was a bad idea. Putting aside superstition purveying, the Sallies are admired for what they'd probably call applied Christianity, namely aiding the helpless or inept, who cannot cope with the modern world other than at the expense of their fellow men.
Rental housing ownership is my idea of a cruel and unusual punishment. But owning heavily subsidised housing would have me smashing down a Trappist monastery's door seeking refuge, or, if lapsing slightly from my usual mild demeanour, machine-gunning the tenants, a variation on doing God's work even the Sallies would have ended up contemplating.
Nevertheless, the Government's radical desire to quit this portfolio has merit. Instead of seeking new owners, they should emulate the first 1949 National Government and sell the homes to their occupants. Sixty-five years ago, state house estates in blue-collar New Zealand were not associated with crime, or a cycle of pervading dependency as many are today. I know that as I lived in one and recall when this scheme was launched, as most folk switched from renters to owners. As no one had a bean, plainly this exercise was on a no or very low deposit basis, with government mortgages at rates equating current rentals. The evidence is overwhelming of the social good emanating from home ownership, of an enhanced sense of community, personal responsibility and progress. Certainly I can think of no better way to break the debilitating cycle of dependency which is the greatest scar on contemporary New Zealand.
The houses should be sold at current market value but at low non-transferable mortgage rates for perhaps a decade. Thereafter their capital value growth should make private sector mortgages feasible. Doing this unloads them and their accompanying upkeep hassles, transferring the Government's bricks and mortar asset to a monetary one. That debt package with a government guarantee would be readily saleable. Regardless, the Government (that's you and me) is immediately better off, having shed the maintenance, rates and insurance costs while receiving the same income, only as interest rather than rent. It's good economics and, as said, excellent social policy.
AdvertisementAdvertise with NZME.
Margaret Thatcher copied this scheme 35 years after New Zealand introduced it, in the process gaining an unexpected benefit through creating an enlarged Tory-voting lower middle-class. This arguably evidenced the positive attitudinal change which arose through home ownership. Prior to last year's election I scoffed in this column at Labour's aspiration to bring out the vote in the likes of South Auckland, and so it proved. Throughout the Western world, low-income people have stopped voting. It's reasonable to conclude they feel elections and their implicit wider society concerns are irrelevant to them. Make them home owners and watch a change in outlook.
Coincidently, after I drafted this column I chatted to Bill English at a social function and told him about this idea. "Write it," he said "it will be interesting to see the reaction." He said the Government was exploring something along the same lines.
To critics who say tenants would be worse off through now having maintenance, insurance and rating costs, I would argue that fact has merit. They'll cope as my parents' generation did, which brings to mind a childhood memory.
My father, a welder, worked long hours and we rarely saw him as he was gone by the time my siblings and I woke. There was a single exception. One day each year when we rose, Dad would be there, squeezed into the suit and tie he'd been married in. An air of tension hung over the household, this event being explained as "important business". Years later I asked my mother what this palaver was about and learned it was Dad cycling down to Lower Hutt city to pay the annual house insurance premium. He'd have been panicking for fear of rejection.
Regarding the Thatcher sell-off, a curious political consequence arose, attributable to rabid party politics, and it's again an issue leading up to the forthcoming British election. Specifically, Britain's Labour Party opposed the sale to tenants, arguing irrationally that it would decrease the total housing pool.
What of future dependent generations? Here's a possible solution. Recently, Bill English opened an Upper Hutt factory for Matrix Homes, which is knocking out easily transportable modular housing units, built in 12 days, offering over 100 variations. Prices range from $89,000 for one bedroom to $195,000 for four bedrooms with two bathrooms. These offer an ongoing solution for low-income housing. Subject to appropriate provisos, low-income families could be given ownership with an initial 100 per cent mortgage equating to the standard state house rent, but incorporating some principal reductions.
Banks would line up to provide the funding at market rates, subsidised by the Government. It would save taxpayers forking out for new houses, be more efficient and as said, would be great social policy.