New Zealand's worsening housing affordability problem is causing serious social problems. There's now a consensus on that that issue, illustrated by a media report on Wednesday quoting politicians from all sides acknowledging the social fallout from rising house prices - see Radio New Zealand's House price rise increases inequality - English.
A Government report out last week - The Families and Whanau Status 2015 report (PDF) - also illustrated some of the financial stress being caused by housing unaffordability, as reported by Shelley Robinson in 'Middle-class poor' struggling with financial stresses: report.
Increasingly it's acknowledged that this gap between those who can afford to buy houses and those who can't has widened to an extreme situation. Economist Shamubeel Eaqub has recently labelled it a form of "housing apartheid". His book Generation Rent is about this growing divide and what it means for the country. He explained on TV3's The Nation why this is essentially a social-economic class divide, rather than one primarily based on ethnicity. His 11-minute interview, Shamubeel Eaqub on Generation Rent is well worth watching.
TV3's interview transcript also records Eaqub's forthright explanations of this economic "segregation" and "ghettoisation" occurring. He says that although there's also a generational and ethnic dimension to the housing problem, he describes "this massive divide opening up in New Zealand between the landed gentry and the rest". So it's the "haves" versus the "have nots" - an economic rather than race divide.
Eaqub's book, co-written with his wife Selena Eaqub, has created quite a stir. Despite not being as sensationalist as Labour's recent race-based campaign, this class-based diagnosis is receiving plenty of interesting book reviews. The best review is Rob Stock's House price divide threatens British-style class system. But see also Stock's article, Eaqubs' 'Generation Rent' deserves a hearing.
Of course, Eaqub was one of the economists who spoke out strongly against Phil Twyford's "Chinese-sounding name" campaign on housing. And his own campaign on housing affordability shows how an examination of the housing affordability problem - and the potential solutions - don't need to concentrate on race or populism. In fact in terms of the "foreign investor" issue, Eaqub has done his own research - based on more credible data than Labour's - and estimated that such purchases account for only about eight per cent of housing.
And in a blog post published last week, Generation Rent, Shamubeel and Selena Equab argue that we should ignore the distractions about foreigners and immigrants, and look for real solutions, and they propose a few. These are "structural policy changes" around tax, banking, and housing supply - not quick-fix populist ones.
Incidentally, Shamubeel Eaqub has just left his position as principal economist with the New Zealand Institute of Economic Research - see John Anthony's Shamubeel Eaqub leaves NZIER, considers business ownership.
Left and right are angry
Predictions of growing economic segregation are an "alarming thought" according to Generation Rent book reviewer Morgan Godfery - see: Generation Rent: What's really the solution?. He proposes that "A wage catch up is one way to make housing more affordable without secretly wishing for the bubble to burst".
Also on the left, blogger No Right Turn refers to the book's prognosis and says that the way forward is to look to the past: "in the late C19th New Zealand was developing an unwelcome landed gentry of high-country farmers with vast estates. The Liberal Government strangled that would-be-aristocracy at birth with land taxes, which forced the breakup of those estates. We need to do the same again - not just capital gains taxes on property speculators, but estate taxes and restrictions on the use of trusts to counteract those disparities of wealth and prevent them from accumulating" - see: A landed gentry.
But it's not just those on the political left who are up in the arms about the concept of the growing unfair housing divide. Act Party MP David Seymour has been making some similar points to the Eaqubs, and in May complained that "home ownership has become the privilege of the wealthy" - see Rob Stock's Home ownership now for privileged few - ACT. Seymour is quoted as saying that "For the first time we have a situation in New Zealand where property ownership is heritable", and "I look at most of my friends, lawyers, doctors or engineers. All of them went to Auckland Grammar, or St Cuthberts. All of them have done it with parental help".
The growing housing divide is making some furious - see Peter Calder's House rage - we're right to be angry. This is the core of rage: "We have betrayed a generation and generations to come and I'm angry as hell about that. In just 15 years of this century, we have destroyed one of the great achievements of the last one: making New Zealand a place where anyone who wanted to could have their own place to call home".
