Brooke van Velden: My solutions to the housing affordability crisis

Home ownership feels like a Kiwi rite of passage, but the dream is slipping further away. Photo / 123RF

Opinion

OPINION:

I want to live in a country that values aspiration. A country where if you put in the hard yards and save well, you'll be rewarded for your efforts. For most New Zealanders their aspiration and reward is home ownership. A little slice of paradise.

It's a goal I share. I'd like a three-bedroom weatherboard with enough lawn for a dog and just enough surface-level problems to justify weekend trips to Bunnings.

Home ownership feels like a Kiwi rite of passage but as house prices break records, the dream is slipping further away and more people are being left behind.

It's never been easy, nobody's saying it was, but the simple fact is that fewer and fewer people own homes now. The number of people in their late 20s or early 30s who are home owners has declined over the last three decades from two-thirds to just over a third. Couples in their early 30s have seen the largest fall.

Last year the average house price went up $120,000. It was already very difficult for young workers to save a deposit after tax, rent, utilities and food. But here's the thing: Last year a 20 per cent deposit went up by 20 per cent of $120,000. That's $24,000 extra saving just to stand still.

The prospect that house prices will continue to rise at this rate is demoralising. It's not just about the money, it's about culture. Imagine knowing that no matter how much harder you work, or how much more is put away into savings, you won't get any closer to your goal.

For the couple waiting to start a family until they can provide their child the security of a home, it's disheartening. For the person sacrificing all but the basics to get a foothold on the first rung of the housing ladder, it's unmotivating. For a person just joining the workforce, it feels hopeless.

For prospective buyers, it's demoralising to know that no matter how much harder you work or save, you won't get any closer to your goal. Photo / File

A large part of being a politician is listening. It's hearing people's concerns and aspirations.

I share concerns about rising rents, increasing numbers of people living in motels, and a sense that we're becoming two New Zealands: Those with parents able to gift a house deposit, and those without. I'm concerned about the division it's sowing.

You can feel the anger and frustration build as friends hand over money to pay someone else's mortgage while they're being outbid at auction after auction.

Yet, for every tax or price freeze suggested to solve the problem, there's a real-life example of it not working.

Take South Korea. They've tried over 20 initiatives to curb soaring house prices ranging from price ceilings to 70 per cent property taxes and yet prices kept rising. The initiatives fail because demand continuously outstrips supply. Tinkering doesn't build more houses. President Moon Jae-in has recently signalled supply-side reform.

Troublingly, I've heard it said that immigration is to blame.

Every person who comes to New Zealand determined to build a better life deserves to feel welcome and to have equal right to the security of home ownership.

The fact is we're simply not building enough.

We need to build more homes to make housing more affordable for all New Zealanders.

Supply-side reform is the way to make NZ housing more affordable. Photo / Sylvie Whin

It takes forever to get consent for anything larger than a garden shed let alone a whole development, but the councils aren't entirely at fault. They're just playing by the Government's rules, which are skewed against development. We need to replace the Resource Management Act (1991) with urban planning laws that recognise the challenges of 2021.

Solving the housing crisis in New Zealand requires more than just ideas about how to build more homes faster though, it requires addressing the root of the problem: infrastructure.

Each new home needs infrastructure to provide clean drinking water to the tap, power to the lights, roads to get to-and-from work, and footpaths for prams.

Councils don't zone more land for new development because they can't afford the infrastructure. It's that simple, and if we can get infrastructure funding right, more affordable housing will follow.

Cash-strapped councils should be able to team up with the Government in long-term infrastructure partnerships. It would align funding with the local plans and knowledge needed for long term regional development and take politics out of infrastructure planning. It would allow planning and building for the future.

We need change. We must reform the rules so every person has the possibility to know the feeling of accomplishment that comes from hard work, saving, and achieving a goal. A possibility to live in a home they can afford. A chance to own a stake in society.

Brooke van Velden, MP, is the deputy leader of the Act Party. This is part of a new series of columns that appear each week. Next Wednesday: Maori Party co-leader Debbie Ngarewa-Packer. Following week: Green MP Chloe Swarbrick