The houses should be sold at current market value but at low non-transferable mortgage rates for perhaps a decade. Thereafter their capital value growth should make private sector mortgages feasible. Doing this unloads them and their accompanying upkeep hassles, transferring the Government's bricks and mortar asset to a monetary one. That debt package with a government guarantee would be readily saleable. Regardless, the Government (that's you and me) is immediately better off, having shed the maintenance, rates and insurance costs while receiving the same income, only as interest rather than rent. It's good economics and, as said, excellent social policy.
Margaret Thatcher copied this scheme 35 years after New Zealand introduced it, in the process gaining an unexpected benefit through creating an enlarged Tory-voting lower middle-class. This arguably evidenced the positive attitudinal change which arose through home ownership. Prior to last year's election I scoffed in this column at Labour's aspiration to bring out the vote in the likes of South Auckland, and so it proved. Throughout the Western world, low-income people have stopped voting. It's reasonable to conclude they feel elections and their implicit wider society concerns are irrelevant to them. Make them home owners and watch a change in outlook.
Coincidently, after I drafted this column I chatted to Bill English at a social function and told him about this idea. "Write it," he said "it will be interesting to see the reaction." He said the Government was exploring something along the same lines.
To critics who say tenants would be worse off through now having maintenance, insurance and rating costs, I would argue that fact has merit. They'll cope as my parents' generation did, which brings to mind a childhood memory.
My father, a welder, worked long hours and we rarely saw him as he was gone by the time my siblings and I woke. There was a single exception. One day each year when we rose, Dad would be there, squeezed into the suit and tie he'd been married in. An air of tension hung over the household, this event being explained as "important business". Years later I asked my mother what this palaver was about and learned it was Dad cycling down to Lower Hutt city to pay the annual house insurance premium. He'd have been panicking for fear of rejection.
Regarding the Thatcher sell-off, a curious political consequence arose, attributable to rabid party politics, and it's again an issue leading up to the forthcoming British election. Specifically, Britain's Labour Party opposed the sale to tenants, arguing irrationally that it would decrease the total housing pool.
What of future dependent generations? Here's a possible solution. Recently, Bill English opened an Upper Hutt factory for Matrix Homes, which is knocking out easily transportable modular housing units, built in 12 days, offering over 100 variations. Prices range from $89,000 for one bedroom to $195,000 for four bedrooms with two bathrooms. These offer an ongoing solution for low-income housing. Subject to appropriate provisos, low-income families could be given ownership with an initial 100 per cent mortgage equating to the standard state house rent, but incorporating some principal reductions.
Banks would line up to provide the funding at market rates, subsidised by the Government. It would save taxpayers forking out for new houses, be more efficient and as said, would be great social policy.
