Hawke's Bay people should pay attention to Auckland's housing problems as they seem to be contagious.
Investors who are being shut out of the Auckland market are now casting their eyes further afield and property values almost everywhere are rising.
There is no doubt that rapidly rising house prices, at least in Auckland, constitute a classic economic bubble, but the Government has no interest in any actions that may make this bubble pop.
Although home ownership is falling, 64 per cent of Kiwis still own their own houses. This means that a clear majority of voters feel better off as they see the value of their main asset climbing.
Although homeowners are developing a false sense of security, the victims of this situation are renters and first-home buyers. Pressure on housing in Auckland is becoming obvious. If you drive up Harbour View Rd in Te Atatu, you will note two small portable cabins erected on the front yard of a modest property. There appear to be at least three families living at the address, one in the house and one in each of the cabins.
The manufacturer of these cabins will rent them to property owners for between $70 to $80 per week, and given that a garage in South Auckland can be rented for $380 per week, the profit for someone with few scruples and a bit of space in their garden must be tempting.
The cabins have electricity but no kitchen, bathroom or toilet facilities. The medium and large-sized cabins have footprints smaller than 10sq m so, according to the sellers, you won't even need council approval.
It is clear from the comings and goings that families are raising children in these conditions and this should ring alarm bells. With a Government exploring the concept of "social investment", these living conditions are an example of a social deficit that will come back to haunt taxpayers.
You simply can't crowd kids into inadequate accommodation like this and not expect downstream costs in the health, education and ultimately the justice/prison systems.
I doubt that portable cells in suburban yards is anyone's idea of "intensification" but the way things stand, there is no reason why these could not be erupting in leafy and posh St Heliers.
Bill English has talked a lot about social investment and, to be fair to the man, there is evidence of this approach in this week's Budget. The big investment in this area was the money voted to reform and replace Child Youth and Family, but a smaller initiative grabbed my attention.
Instead of increasing our schools' operations budget, extra funding will be tagged to be spent on the most disadvantaged pupils, which commentators have defined as the children of long-term beneficiaries.
The sum pledged has been condemned as too little and probably amounts to about $80 per pupil. My view is that this spending could make a huge difference, properly deployed.
Howard League volunteers have been teaching illiterate prisoners how to read and write for nearly five years, and because volunteers do the teaching each course costs less than $50 for books and consumables.
Former Corrections Minister Peseta Sam Lotu-Iinga told me and Howard League president Tony Gibbs about a programme in one Auckland high school where non readers were taught literacy one-on-one by volunteers. If this modest funding is used to promote a similar initiative in lots of schools, we could be looking at a very cost-effective social investment. Kids who can read and write are much less likely to go off the rails. The source of tomorrow's prisoners could be heavily reduced.
-Mike Williams grew up in Hawke's Bay. He is CEO of the NZ Howard League and a former Labour Party president. All opinions are his and not those of Hawke's Bay Today.
