Dileepa Fonseka is a political reporter based in Wellington who covers housing, infrastructure, immigration, transport, local government and the Provincial Growth Fund.

Politics

Borrow, build, hold says Green co-leader

The Green Party co-leader says the Government should be borrowing more for public housing, Dileepa Fonseka reports

Government should hold onto the houses it has pledged to put out on the open market, Greens co-leader Marama Davidson says.

Davidson said the state was already building many of the houses it needs to reduce a burgeoning social housing waitlist - but it’s just pawning them off to private buyers as part of a state housing scheme she dubs a “state land sell-off”.

The public housing waitlist hit 14,000 in November last year, more than double what it was two years earlier.

New state housing is being built on Crown owned land to take the place of ageing state houses.

“It's all well and good to yell about having a low debt but all that has happened is its shifted onto individuals and families and households who are struggling, that's all that has happened.”

The new homes have a smaller footprint - multiple homes stand where a single house stood previously.

But two-thirds of the houses built are being sold as “affordable” KiwiBuild homes for first-home buyers, or on the open market.

The arrangement inserts the Government into the private housing market, selling houses that should have been rented out to public housing tenants instead, Davidson believes.

“The reason why we're in that space is because the Crown would prefer to recycle revenue back to be able to fund that public build.”

“It's all well and good to yell about having a low debt but all that has happened is its shifted onto individuals and families and households who are struggling, that's all that has happened.”

The Government taking on more debt for public housing would open up more opportunities than fully funding existing programmes like the Auckland Housing programme.

Davidson suggested it could be used by entities like Kāinga Ora to buy up struggling office blocks in the central business districts of smaller cities like Rotorua.

“There are town centres with half-empty business blocks, and shop blocks and carparks, we can be rebuilding, rejuvenating town centres that were already there as well as add more public housing developments to those places that have currently got really dilapidated use of space.”

The state housing shortage

The Government will have built 18,000 24,300 houses in Auckland by the end of 2026 under the Auckland Housing Programme, but only 5200 11,500 of those will be state or social houses. (Newsroom has corrected this from an earlier version, which included figures from an incorrectly published Kāinga Ora website (which has now also been updated) The other 12,800 will be sold as “affordable” houses to first-home buyers or on the open-market in what was known as the KiwiBuild programme.

Davidson said a reluctance to ditch the Budget Responsibility Rules and take on debt is the reason those houses aren’t being provided to low-income tenants as part of a mixed tenure development scheme.

“We've got low borrowing rates, we've got expensive land, the Crown can borrow money. It can hold onto more of the houses it is building right now.”

New state housing developments are set to use space more intensively to the state houses of old. Photo: Lynn Grieveson

As a starting point she wants the commitments on those developments revised so that there is a 50:50 split between affordable and public housing - with no houses put out to market.

“Yes we absolutely need to address building capacity, building materials and supply issues and land costs.”

“What I’m saying is right now we are building, we're building thousands and thousands, and of those that we are building we need to be keeping more.”

In August Davidson started a housing tour to survey how different towns and cities are coping with the housing crisis.

The most common story she cites is of families unable to stay together because there’s no place they can live.

“When you have 20-30 applicants for one rental home they’re the ones who aren’t going to get a look in.”

New Zealand’s housing crisis - once at its worst in Auckland - has now sprawled out to smaller centres.

"... the Crown isn't the one that struggles to put food on the table when 80 percent of its income has been gobbled up by rent."

Economist Shamubeel Eaqub told Newsroom Gisborne had one of the longest social housing waitlists relative to its population.

As housing became unaffordable in bigger cities like Auckland and Wellington many moved to smaller provincial centres in the hopes of buying their first home.

But they bought those houses off landlords who previously rented them out on the open market.

“If you’re not adding more houses then there are local people who are being displaced and inevitably the ones that getting displaced are at the bottom end," Eaqub said.

“All of those things are only going to intensify unless we also do something at the same time that increases the supply of state housing and rental housing.”

Davidson said those rising rent costs could be attributed to a lack of public housing, and were effectively forcing poorer families into debt.

“They're carrying the costs of us not having that public provision.”

"Let's instead enable, through borrowing, the Crown to carry that debt because the Crown isn't the one that struggles to put food on the table when 80 percent of its income has been gobbled up by rent."