You know it's a serious issue when every person and their dog is talking about it.
It's the Auckland housing crisis and it hits our city where it hurts most. Families, young and old, are locked out of buying homes by impossibly high prices and as low-income families are slashed from Housing New Zealand waiting lists they compete with middle-income earners for a limited supply of private rental accommodation.
Public pressure is mounting for effective action so there's been plenty of comment from the council, government politicians, opposition political parties and vested-interest groups. The latest group to stick its oar in is the New Zealand Initiative - essentially the renamed Business Roundtable.
Their report, Priced Out, predictably lays the blame for the affordability crisis on "anti-development attitudes, tighter building regulations and restrictions on land supply". They see fault with local and central government rather than the spectacular market failure which is at the heart of the problem. They gloss over the National Government's light-handed 1991 building regulations which led directly to the leaky homes fiasco.
Predictably they support the Government's plan to force local councils to free up more farmland for urban development.
The assumption that runs through their thinking is the blinkered view that somehow "the market" will provide despite all the evidence pointing to the contrary.
Leaving it to the market has always been a failure.
But National is pushing ahead with legislation to force councils to provide more land and Housing Minister Nick Smith says this will provide for 39,000 new homes in Auckland in three years. He may reach his housing target, but they won't be affordable. Smith's plan will at best slow the rise in Auckland house prices but will do very little for affordability.
The most important step the Government could take to support first home buyers would be legislating a capital gains tax to drive property investors out of the housing market. Close to half the homes sold in Auckland are to those who already own at least one home.
Other steps Nick Smith should consider are "betterment levies" on developers. These were used in the 1940s and early 1950s to build affordable housing, particularly for returning soldiers and their families after World War II. Property developers were charged 50 per cent of the land value "uplift" after it was zoned for urban development and this funded such things as roads and footpaths.
Just a week or so ago the Herald reported on a 29ha property in Flat Bush that was bought by speculators in 1995 for $890,000 but is now on the market for $112 million. Not only will the profit on the sale be untaxed but no betterment levies will apply to the development either. Nick Smith was right to call this unearned, untaxed windfall "obscene" but then somehow tried to blame Auckland's urban limit rather than the failure of Government policy to control this reckless racketeering in land. With speculators, developers and property investors having a stranglehold on land supply and the ability to "land-bank" to drive up prices, it's no wonder Auckland housing is less affordable than ever.
So what can Auckland do? In the past local councils have shied away from significant involvement in housing. They have built pensioner flats around the country but only because central government provided subsidies. However, Auckland City is now big enough to provide affordable housing without adding cost to ratepayers.
Building quality affordable council rental accommodation should be the first priority. The council can borrow more cheaply than developers, use economies of scale to drive down the cost of building materials and it can use council-owned land.
Council officials have identified around 300ha of council land suitable for housing which could deliver 9000 homes. With the cost of land out of the picture, there is no reason that quality affordable rental homes can't be provided quickly by a modern, efficient council working for the whole community, rather than a minority of speculators, developers and property investors.
John Minto is an Auckland mayoral candidate and co-vice-president of the Mana Movement.
Debate on this thread is now closed.