Housing demand and supply side measures

The media constantly report that the Government has only had policies dealing with the supply side of housing, and not the demand side. This is not true. Off memory, here are policies that National has implemented, or the Reserve Bank has.

Demand Side

1. Removed the ability to claim depreciation on houses as a tax expense
2. Middle and low income earners get grants of up to $20,000 for their first home
3. Any non-primary house sold within two years of purchase to be taxed as income on the gain
4. Non-resident buyers required to register with IRD, so level of foreign purchases can be monitored
5. $5,000 grants for people on social housing waiting list to move out of Auckland
6. LVR rules requiring 20% deposits nationally and 30% deposits in Auckland
7. DTI rules setting a maximum debt to income for borrowing likely in near future

Supply Side

1. 210 Special Housing Areas agreed with Councils to consent 70,000 new houses
2. Made crown land available for 10,000 homes, of which 40% will be “affordable”
3. $1 billion fund available for Councils for infrastructure to new housing areas
4. Require Councils to free up land in line with population growth
5. National Policy Statement on Housing to give developers ability to take Councils to court if land not made available
6. RMA changes to reduce consenting costs
7. 4,000 more state houses being built
8. Income related rent subsidies expanded to community housing providers
9. $41 million funding for emergency housing providers to provide 3,000 beds
10. Reviewing tenancies of state house tenants who no longer need a state house, so more needy families can get one
11. Build 150 pop up houses in Auckland
12. Central and local Government partnerships in areas such as Tamaki and Hobsonville to do major housing developments

Now there are other factors at work, which the Government has little influence over. Three major ones are:

• Land restrictions put in place by Councils, especially Auckland Council. Only the Auckland Council can change these, unless Parliament over-rides them.
• The level of net migration. The level of residency visas has remained constant, but we have more Kiwis remaining and returning, plus more temporary visas (students and work).
• The low level for interest rates

This is not to say the Government can’t do more. Like Labour it should explicitly call for the Auckland Council to abolish the urban boundary. The idea of infrastructure bonds for new developments is worthwhile, and an urban development authority is also a good idea. But the power of compulsory land acquisition is a step too far.