Two Ideas On How New Zealand Could Quickly Improve The Housing Shortage

17 May 2018

 

Two Ideas On How New Zealand Could Quickly Improve The Housing Shortage

 

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I'm going to keep away from the two main options that are always discussed with the housing shortage, as reducing immigration and building more houses are the obvious points.  Instead, I'm going to focus on two options that could quickly be implemented and that could quickly provide a supply of more houses.

 

1.  Utilise what the Government or councils already own

  • NZ Crown estate looks after around 8% or two million hectares of New Zealand's land area.
  • Housing NZ owned 60,301 units (houses) in 2017.  Plus 2,800 units transferred to Tamaki Regeneration Company in April 2016 (jointly owned Crown and Auckland Council).
    • As at 31/3/18, 1,148 of these were vacant.
  • Other properties owned by Government or councils:
    • Governor-General has two official residences
    • Premier House (Prime Minister's official residence) 1.45 hectares with CV of $14 million
    • Schools, railway, libraries, halls, community buildings, commercial buildings
    • Hamilton City Council, for example, owns quite a few residential properties too.

For landlords, we are continually suggesting that you should review what you have, and try to maximise what you already own by subdividing, adding minor dwellings, etc.

Imagine how many opportunities there are with all the property owned by the Government and councils.  Imagine how much wasted space there is that is already owned and controlled by the Government.  Housing NZ is already trying to develop some of its properties, and trying to create more houses.  My suggestion is that this needs to be ramped up!  It would be much easier to build 100,000 houses on land already owned by the Government, than it would be to buy new land!  Plus, this would be a lot cheaper!

Also, if the land is already owned, then the houses could be built quicker.  This is an important part, as otherwise it will be five years time before we know it, and very few new houses would have been built by the Government.

Obviously, it is important to still keep parks, common areas, and some green space - But there will be many residential properties where another one or two dwellings could easily be added.

Think if you owned all these properties, would you be trying to maximise your return (monetary or social)?

 

2.  Utilise houses that already exist

This article is a bit old, but it reported there are 33,000 Auckland dwellings officially classified empty!  (https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11654495).  In another article around the same time, it stated New Zealand has 1.6 million dwellings and 185,445 unoccupied!

Some of these will be for sale, some will be under repair, some will be between tenancies, and some will be holiday homes.  But there is still a large amount of properties that aren't being used.  So, surely an opportunity exists to either get these rented out, sold, or to get some extra income for the Government from them.

Long term, I would look at other areas, but to start with, this idea could just focus on Auckland.

Census information or water information could be used to determine which houses are empty, and have been empty for over three months.

If a tax was charged to the owner for having the property empty (0.5% of the value?), this would cause a lot of the property owners who are sitting on empty properties to either sell or rent.  Almost immmediately, this would add a lot of properties to the housing market and reduce the housing shortage in Auckland.  Obviously, there would have to be some exemptions for leaky homes, earthquake properties, houses under construction, etc, but it should be manageable, and, perhaps, charged as part of rates.

What do you think?

Kind regards

Ross Barnett

 

 

 
 
 
 

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