Brooke van Velden: We need to get back to building basics

One builder said it takes longer for him to get consent to build than it takes to build a home. Photo / Jason Oxenham

Opinion

OPINION:

Last week, a 30-year-old man said to me, "I can't see a future for myself in this country."

He was frustrated that house prices are rising faster than the amount he can save each week. He's not alone. Many people have spoken to me about feeling like owning their own home is a hopeless dream in New Zealand. Increasingly, nurses, builders, and other young skilled workers have mentioned they're considering moving to Australia and trying their luck there. Others tell me they feel like giving up on their dream all together.

For the store worker picking up extra shifts to save a little bit more or the couple tightly budgeting every dollar, seeing house prices rise again and again at a rate that's impossible to catch up to is unmotivating.

After all, what's the point in striving for a promotion, if a pay rise seems like a drop in a bucket?

The average house price rose by $200,000 in the past year. That means a young teacher or nurse needs to save $40,000 for a house deposit in one year just to stand still. I don't know any young workers who could save $40,000 in one year after rent, utilities and food.

When we were kids, we were told to study hard, get a good job, work hard, save money, and we'd get ahead. If you do all that and still don't get anywhere, it feels unfair.

We need to get housing right so young workers can believe that hard work can lead to success, that they can provide a stable home for their family and aspire for a better future.

The average house price rose by $200,000 in the past year. Photo / Doug Sherring

The problem is that every Government says it'll fix housing, but none have. This Government's solution is to "tilt" the market away from investors towards first-home buyers. But that doesn't build homes. All it does is attempt to shift fault for high house prices away from the Government and on to landlords. It's a blame game.

If the Government wants to fix the crisis, it should be asking: "How do we create an environment for investment and development, so every hard-working New Zealander can own their own home?"

If that's the question, an extension of the bright-line test, removal of interest deductibility, new regulations and more micro-management isn't the answer.

We need to get back to basics to solve the underlying problem. We're simply not building enough.

I spoke to a builder who told me it takes longer for him to get consent to build than it takes to build a home. We've made it too hard to get anything built.

We need to get the incentives right to let builders build and encourage more homes to be built faster.

The only time anyone gets prompt service from a council is when they're issuing a parking ticket. It's because there's money in it. New houses and subdivisions are the opposite for councils. Every new development needs new roads, water, and sewerage connections.

Last week, a survey of mayors and council chairs found one of the top two issues facing councils is funding and financing. With councils shouldering new infrastructure costs it's no wonder development is slow. The housing crisis is an infrastructure funding crisis.

Last week, I announced Act's GST-sharing scheme as part of our Housing and Infrastructure Discussion Document.

It works like this: If the Government shared 50 per cent of the GST of every new home built with the local council that issued the consent, it would help councils cover the cost of new infrastructure. We'd see councils encouraged to consent more because they'd get more funding. Act's GST-sharing scheme is estimated to deliver $1 billion every year to councils for new infrastructure. But councils that consent more, get more. It's a long-lasting solution to the infrastructure underinvestment across New Zealand.

We need to adopt new ways of funding new infrastructure so that builders can build faster, and New Zealanders can feel that they can have a future in this country.

If the current settings aren't working, let's fix them. Let's simplify land use rules so more land can be used for development, and families can have the choice of a backyard for their kids. Let's make it easier for international investors to invest in build-to-rent apartment developments, by giving the same exemption retirement village investors receive under the Overseas Investment Act, so there's more choice in rentals and less people waiting for emergency housing.

There is a way forward. We need positive solutions for housing so that the next generation can believe in working hard and aspiring for better with the hope that they can own their own home in New Zealand.

• Brooke van Velden, MP, is the deputy leader of the Act Party