We do not have a housing crisis. The housing market works perfectly for those it was designed to serve. Landlords are now protesting because the precarious position of renters has (finally) been acknowledged.
But who knows how long it will it take before the talk ends and the watered down action begins? And even then if the result resembles the government’s affordable housing fiasco where do we go from there? But we are not alone.
An editorial from The Economist bemoans discussions in California, Berlin and London to solve a common accommodation crisis by freezing rents. ‘When will people learn that rent controls are a textbook example of a well-intentioned policy that does not work’.
It points out that reducing incentives for landlords serves only to depress supply and encourage the deterioration of rental properties. It’s reasonable to infer that whoever wrote the editorial would present a similar argument discouraging asset sales tax. An argument we are all too familiar with. But no ideas were presented to solve the housing problem.
The residential property market exists to enable middle-income buyers to acquire rental properties, thus providing them with more than comfortable financial security, and to make rich landlords richer.
An interesting development in Wanaka: A local businessman included worker accommodation in the cinema he built recently. This was a sensible financial investment. As multitudes of landlords have demonstrated for decades, renting out flats and houses is the best long-term investment in town.
In addition, this employer is virtually guaranteed his choice of available workers in an area where landlord greed is chasing young couples elsewhere. Low wages and high rents do not a settled community make.
A new multi national supermarket is near completion. Not Countdown, that has finally decided to pay a living wage, but New World that has not. The supermarket will require between 150 and 200 workers. But there are not that many desperate, unemployed here, so many of the workers will have to come from out of town. How they will cope on a minimum wage and pay in the region of $600 dollars a week rent is not difficult to predict.
For fairness and social cohesion to be valued the housing investment field should be levelled. Local councils backed by government need to borrow billions to invest in providing homes for long-term lease and rent-to-own. Forget the inflated cost of materials and the shortage of workers, the Chinese could provide the labour along with the modular buildings and solve a problem that exists only because national and local government has been held in check by me-first voters.