Editorial: KiwiBuild houses never for the poor

Editorial

COMMENT: Judith Collins, sometimes touted as a possible leader of the National Party, did herself no good with a tweet this week pointing out that a couple awarded one of the Government's first "KiwiBuild" houses was not exactly poor.

Coming across an Instagram message in which Fletcher Ross, an online marketer, told his graduate doctor partner, Derryn Jane, "204 countries + seven seas and I had the privilege of meeting you." Collins tweeted, "204 countries - maybe doesn't need taxpayer support."

National's housing spokeswoman had a fair point but the way in which she made it put her and National leader Simon Bridges quickly on the defensive. Housing Minister Phil Twyford accused her of "cyber bullying" and that became the issue.

Twyford claimed her tweet had incited a "disgraceful" attack from others on social media against the young couple who were pictured moving into their $649,000 Government funded home in Papakura last Saturday.

Collins had a fair point in so far as many of the public probably imagine, wrongly, that the KiwiBuild programme is supposed to help the most needy families afford a home of their own.

Twyford must carry much of the blame for that false impression which dates from last year's election campaign when he put housing affordability and homelessness into the same breathless "crisis".

But once he began devising the KiwiBuild programme in detail he soon had to concede that price of houses it could deliver in places such as Auckland would be well out of reach of the low paid. He had to set the income qualification fairly high to ensure there was sufficient demand for the houses at a price that could sustain the programme.

As a politician, he no doubt plans to be pictured with many of the lucky buyers, as he was last Saturday, and the last thing he wants is for those people to be subjected to close and critical public scrutiny of their need.

Little wonder he responded so strongly to Collins' first foray in that direction. But it is a discussion that must be permitted, with all possible car for the feelings of the beneficiaries of the scheme.

The Government needs to admit this is "middle class welfare" and explain more clearly why it is justified. Its purpose is not just to help first home seekers who could not otherwise afford to buy in regions such as Auckland, it is intended to have an influence on the lower side of the market in those regions. This objective has become less urgent since the market slowed more than two years ago but containing price rises remains desirable.

The main reason the market slowed when it did was the realisation by retail lending banks that they were becoming over-exposed to high residential property prices in New Zealand.

Since then, developers have found it more difficult to obtain finance, especially for apartments and higher density units. KiwiBuild offers them finance on condition that an agreed number of units will be sold at a price below the market.

The scheme is promising, National should criticise it with care.