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KiwiBuild goals a massive challenge

Opinion Piece

While it was a milestone for the Government’s housing programme, the opening of the first KiwiBuild houses in Auckland at the weekend showed how difficult the task of Housing Minister Phil Twyford is.

The first 18 houses were opened in Auckland’s McLennan development on a site where eventually 58 will be built.

Two things were a little disturbing in the announcement.

The first was that developer John Penny said he did not know if he would actually make a profit. Other developers will be watching closely to see if they should get involved.

The second was the prices — a three bedroom home will cost $579,000 and a four bedroom one $649,000. The prices are probably justified but they will be out of range of the great majority of potential new home owners, which seems to defeat the purpose of the whole KiwiBuild programme.

The Government has a goal of building 1000 homes in the first year, 10,000 by June 2021 and 100,000 in 10 years. Details of new developments in Auckland, Waikato, Taranaki and Queenstown are to be announced soon. Also, the Government wants to put aside the Auckland council’s unitary plan to make sure enough land is available.

It seems almost certain Twyford will fall short of his worthy but ambitious goals, leaving the Government open to criticism from National as well as disappointed and frustrated renters.

The other side to the problem is that rental properties are not keeping up with demand, probably making future rent increases inevitable.

This is important in a country in which private home ownership figures have plummeted. One third of New Zealanders are now renters, with many unlikely to ever get their own place.

The Government’s proposed new regulations for rental properties include increasing the notice period to tenants from the present 21 days to 90, and to be warm and weather-proof. Commentators say this could induce house owners to leave the market and realise the present high property values.

It all adds up to a massive challenge for Twyford, now one of Jacinda Ardern’s most trusted and important lieutenants.