The Haps
As predicted, the Royal Commission of Inquiry into Abuse in Care was a poignant moment. ACT’s Karen Chhour gave the most powerful Parliamentary speech in recent memory. It is worth watching here.
The State of Housing
Regular Free Press readers have heard us go on about housing for years, so we thought it was time for an update now ACT is in Government.
The core of our argument is that freedom works. Free markets work. So long as people are free to buy, sell, and invest, people will solve the overwhelming majority of their problems. Besides a police force, a defence force, and a court house, the list of things left that Government really needs to do is short.
The left hate it, but the last forty years of globalisation and free markets have done more to end poverty around the world than anything they’ve even dreamed of. There are now large middle classes emerging in India, China, and even some African countries, to the horror of the greenies who fear human prosperity.
Unfortunately a whole lot of people in New Zealand don’t feel that way and with good reason. While the third world got rich from free markets, the housing market and the free market got a divorce here in New Zealand.
Some will stop reading here. How dare you shrink the Everest I climbed in the eighties with 17 per cent mortgage rates! Ok, yes, but is it possible that home ownership has always been hard, and in the past three decades it’s been made needlessly harder?
All the numbers say yes. Home ownership rates have dropped from three quarters owning their own home in the mid eighties to a half now. The portion of a poor household’s income that goes on rent or mortgage has risen from a quarter then to over a half now. The number of new homes per citizen has never got close to the 1974 peak, and has been half of that some years.
Somewhere along the way, the Resource Management Act, the Building Act, and councils’ use of them made it too hard to build a home. It’s not just young people who are affected. It’s people approaching retirement without a home of their own. It’s the taxpayer, who always seems to suffer in the end, shelling out $4 billion per year in housing subsidies.
Then there’s the dysfunction that comes from a housing shortage. You shouldn’t commit crime for the rest of your life just because the state put you in a succession of motels with drugs, prostitution, violence, and a different school every few months. You shouldn’t, but Free Press predicts that Labour’s emergency housing experiment will one day be seen as a cruel state blunder with far-reaching consequences.
Less acute are the young people who say ‘hang on,’ I did everything right and now I start my first job, with a student loan, to find an entry level home costs fifteen times my salary? No wonder so many either leave or think voting to tax anyone with money might be a good idea.
There aren’t many problems that don’t come back to our dysfunctional market for housing. The solutions are being put in place, mostly as ACT campaigned.
Replacing the Resource Management Act, with property rights being the first principle, is the number one priority. It may turn out to be the most important line in ACT’s coalition agreement. With Simon Court on the case, a new law is being prepared for Parliament next year (David Parker took five years to do his RMA reforms).
The property rights focus works in two ways. It says if you own property then the starting point is -you can develop it. It also says that if you want to object, it should be because your own property is impacted. Fewer people can object to positive development, but your right to protect your own property is strengthened. The biggest losers are the planning profession who revolve in and out of councils fighting their former selves to interpret the byzantine RMA.
Making it easier to consent a subdivision, put in the pipes and pumping stations, and just generally get homes built is a start, but there are two more parts of a home.
Just because the roads and pipes are consented doesn’t mean they get funded. There need to be new ways of paying for infrastructure. Tolls, road pricing, targeted rates, and bonds. Then there’s sharing GST collected on construction with the local council. These, too, are underway or on their way under agreement with ACT.
The mad Labour-National conspiracy to zone every section for three three-storey homes whether the infrastructure exists or not, is being rolled back. It would have made the infrastructure problem worse by pepper potting development instead of coordinating it. A great example of ACT keeping their heads when all others lost theirs.
Finally there needs to be a market for building materials, not a monopoly separately regulated by each council. Letting builders opt out of council inspections is being ‘explored’ (the weaker form of coalition commitment) but it would not be on the table without ACT.
Freedom works, and not before time free markets are being applied to New Zealand’s biggest underlying policy problem, that it’s too hard to build a house.