Ashley Church explains why it is a myth that there is a housing crisis:
Unless you’ve been living in a cave for the past few years you’ve heard about the shortage of housing in New Zealand.
There are variations of the view but the most popular version claims that we’ve been building fewer homes than we actually need, for decades, and that we now have a shortage of around 100,000 dwellings. This view was almost universally accepted for a long time and while there’s some debate over where the claim originally came from – we know that it first gained widespread acceptance in 2012 when Labour made it the central plank of their KiwiBuild policy to build 100,000 homes over ten years.
Over the next few years the claim gathered momentum and was also adopted up by the National Government which came up with its own initiatives to address the problem. Meanwhile housing commentators, myself included, berated the Government for not moving fast enough and called for even more action to address the huge housing shortage.
There was only one problem: the claim that we had a shortage of homes was never true.
Hang on a minute, we’ve been told by media and politicians that this is a crisis. Surely they didn’t lie to us all?
But here’s the thing: if anybody had actually bothered to check the most simple indicators of housing numbers, back when the claim was gaining traction, they would have seen the whole thing for the nonsense that it was. It could have been nipped it in the bud early on. Instead, we blindly accepted the mantra, and it wasn’t until people like Gareth Kiernan from Infometrics and I started re-examining the numbers that it become obvious that the housing shortage claim was just a house of cards.
Here’s why: there are two very simple and widely available indicators which tell us whether we’re building enough homes to keep up with demand.
The first is population data and the population count, and the second is a census measure which tells us the average number of people occupying a Kiwi home at any given time. The population data is updated constantly, but the household occupancy figure is only available from Census data, which is usually taken once every five years.
So why are these numbers so important? Firstly, because they’re unquestionably accurate, and secondly, because dividing one by the other tells us how many houses we have at any particular point in time.
Let me demonstrate.
We know that, in 1986, the population of the country was 3.24 million. And we know from the census, that year, that, on average, there were 3.29 people per dwellin, or household, in New Zealand. So by simply dividing the population figure by the average household figure, we know that there were almost 985,000 occupied houses in New Zealand in that year.
But if we fast forward to 2013 we find that the population had increased to 4.45 million and that the average household occupancy number had actually dropped to 2.87 people per household. This means that the number of occupied dwellings had grown to 1,550,000, an increase of 565,000 dwellings over 26 years (or an average of 21,000 new dwellings being built per year).
Why does this matter? Because the household occupancy number could only have dropped if we had built more homes than we needed. If it had stayed at 3.29 we would only have needed 1,352.000 homes by 2013. So we built almost 200,000 more homes, over that 26 year period, than we needed to just stand still.
Think about what this means, because it’s important.
Yes, very important. We’ve been lied to, and the figures prove this.
Not only do we not have a housing shortage, but also the market has actually been supplying more homes than we’ve needed for almost 33 years!
But wait. Don’t we also know that we have high levels of homelessness and that the numbers of people on the Social Housing Register – those wanting to rent a home from the State – have dramatically increased?
Yes, to both. But these things are symptomatic of socio-economic issues, not a shortage of housing. For example, people register for social housing not because there are no homes to rent, but because they can’t afford market rate rents. The same is true of the homeless. The factors which drive this public issue are more complex and also relate to mental health and addiction issues. The point is that neither have anything to do with an actual shortage of housing.
Have you wondered why there are no stories coming out any more about people living in cars? Have you wondered why, if there is growing homelessness that these aren’t featured? Well, the opposition that pimped the poor to create a crisis are now the government and National are too stupid to use the same tactics. There have been two cold winters since Labour took over and there is no way all those people living in cars miraculously found homes.
Instead of doing to the government what was done to them they instead post Tik Tok memes on Facebook and other inanities. National has forgotten how to do opposition, with a few rare exceptions, but Bridges is busily suppressing those rare exceptions by hogging Question Time for his own ineffectual grandstanding.
But how can this be? How can there be such a massive difference between what we’ve been told and what’s actually happened?
The answer is simple. While all of our attention has been focused on the failed KiwiBuild programme, the private sector has been quietly plugging away building, and selling, a large number of homes where they’re needed most. According to a recent NZ Herald article, the top ten housing development companies in New Zealand built over 10,000 new homes last year. At that rate, we’re very close to reaching the original national KiwiBuild target of 100,000 homes over ten years, all just within Auckland and without any Government input or interference.
The Coalition (and the National Government before them) misread the market and made the mistake of believing that government intervention was the way to solve a (non-existent) housing problem. No one did the basic math, no one challenged the claims and, most importantly, no one thought to check on the private sector to see what they were doing.
One Roof
National reacted with #metoo solutions. Everything the government has proposed Bridges has said, ‘yes, but we’d do it better or faster’. They’ve done this consistently over multiple policy areas. If the premise for National to win the government is still that they aren’t quite as shithouse as Labour then there really is no compelling reason to change government.
Labour will pitch the election as they’ve ‘only just begun, give us another shot and we’ll get better’. Until and unless National actually provides some clear policy differentials in the areas that matter most, housing, taxation, health, economy then we will see Labour re-elected.
While Ashley Church has highlighted the housing myth he has also highlighted how similar to Labour National’s position is. They’ve pushed the same end goal as solutions without addressing the underlying issues. #MeToo+100 isn’t a valid policy platform.
Both major parties need a good shake up, otherwise it will be more of the same.
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