KiwiBuild: An expensive bandaid that’s not fixing the real problem

Opinion 10/11/2018
KiwiBuild housing development in Mt Roskill.

By Rodney Hide, former ACT Party leader.

OPINION: The trouble with KiwiBuild is that it is helping the few, not the many.

That’s because it’s not making housing affordable for everyone. It’s just benefiting the lucky homeowners who win the ballot.

It would be far better to deal to the problem of affordability rather than buying houses off-plan to ballot. That would mean opening up land for housing, and perhaps streamlining the consenting process. That's how it was done back when houses were affordable.

That way everyone could benefit, not just the lucky few.

We can’t really blame the government for the KiwiBuild shemozzle. Minister Phil Twyford is doing what he promised, albeit a bit slower and at a higher expense.

The trouble is that the policy was never a fix. It was a bandaid and now we have bandaids on the bandaid.

The celebration of the first KiwiBuild home collapsed into an explanation that KiwiBuild was never meant for people properly priced out of the housing market but rather people just ever-so slightly priced out.

The trouble with creating winners is that it creates losers.

That was always going to be the case but pre-election that was never made clear. The impression was created and then left that everyone could have an affordable home. And 100,000 homes sounded like an awful lot.

The impression was also that Government was going to build the 100,000 in addition to what was already being built. The reality is that the Government is simply buying houses that are already being built. The houses aren't extra.

The boost is not quite the bang everyone expected.

The owners of one of the first KiwiBuild homes.

It also seems odd that the first KiwiBuild homes in the South Island were in holiday destination Wanaka. And that the ballot had to be extended for lack of interest.

Minister Twyford has had to back off his tough plans for not allowing the raffle winners to flick their KiwiBuild at the first opportunity. If they sell, without his permission, the government will now claim back 30 percent of their capital gain. The lucky ballot winners will get to keep 70 percent of the windfall. If they wait three years, they get to keep the lot.

That bandaid shows the problem. Decent housing policy would mean the price of new houses falling, or at least staying the same. But even the Minister expects house prices to continue to rise even with his policy and him in charge.

The ideal housing policy would see no interest in KiwiBuild because houses would be affordable without Government buying houses to ballot at a discount. That should be the goal – not the helping of the lucky ballot winners.

The trouble with creating winners is that it creates losers and with KiwiBuild, there's a great many more losers than winners. There are those who enter the ballot and don't win and those too poor or too rich ever to enter. That’s most people.

Politics is about numbers and perception. You have to be seen to be helping the many, not the few. That's why KiwiBuild is proving a millstone around the Government's neck.

Rodney Hide speaks all things politics every Saturday on RadioLIVE’s Weekend Life.