Stories of the modern housing crisis

It all flows from the simple truth that prices have inflated beyond all reasonable measure

Good morning and welcome to The Bulletin for Wednesday 18 November, by Alex Braae for The Spinoff. Presented in partnership with Z Energy.

Also just quickly, my sincere thanks to Alice Neville and the team for filling in yesterday morning at very short notice.

In today’s edition: Stories of the modern housing crisis, commerce commission to study supermarket industry, and Tauranga’s local government civil war deepens.

Image: And probably sold for way above what it should have (Getty Images)

The term 'housing crisis' featured a lot in NZ politics over the last decade, but it means different things to different people. In today's Bulletin, I'm going to pick out several stories from the last week that in my view capture what the housing crisis of today is: It is about the simple fact that prices have inflated to an extreme degree in recent years, often regardless of the quality of the house itself, and the flow-on effects that has for the whole population. 

The extreme escalation in house prices has led to a political fight over how independent the Reserve Bank should be. Stuff's Thomas Coughlan has analysed the various interventions that have been made so far, coming to the conclusion that it represents a real shift in what had previously been a wide consensus view in NZ politics. National has come around to the position of reining the bank in, while PM Jacinda Ardern derided that approach as 'Muldoonist'. 

When asked about the house price crisis, Ardern hinted at new support for first house buyers to get on the property ladder, reports the NZ Herald. She identified a problem around the increasing impossibility of younger people getting into the market without parental support. And it's true – that is a fair problem to try and address. But the proposed solution would run the risk of exacerbating the much more systemic problem, which is that house prices and house price inflation now far outstrips anything people can earn through working, and the divide will continue to grow between the have-houses and the have-nots. 

Meanwhile, tenants in South Auckland rentals are facing difficult choices about whether to make waves, and risk being kicked out. Justin Latif has spoken to people who experienced such situations first hand, and community advocates who say they aren't isolated incidents. As Auckland Action Against Poverty’s Brooke Fiafia put it, “people do avoid complaining, because it’s a roof over their heads and because they know they don’t have any other choice.” Such problems are expected to get worse, as house prices go up, landlords will cover those increased costs by putting rents up further. 

In Wellington, even apartments that were meant to be affordable for essential workers are coming with high price tags. Radio NZ reports there has been criticism of the weekly rent of $580 for two-bedroom apartments converted from unused office space. Councillor Fleur Fitzsimons said the apartments weren't meant to be cheap – only affordable and stable. She also said there would be no problem attracting tenants to them, which seems like something of a redundant statement in a market where demand is way ahead of supply. 

Finally, in a grim bit of irony, it has been revealed by Stuff this morning that many property speculators aren't even paying the modest tax they should be on flipping houses. The 'bright-line test' is about as close as New Zealand gets to a capital gains tax, and applies to profits on investment properties sold within five years of purchase. However, new figures show that on a quarter of all eligible property sales in 2019, that tax has not currently been paid. 

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The commerce commission will undertake a market study into the supermarket industry, to assess whether it is competitive enough for consumers. Justin Giovannetti has covered the announcement from yesterday, along with a promise from the government to do something about the findings. The accusation against supermarkets is that they effectively act as a duopoly, or even something more like a cartel, and wield and allegedly abuse an enormous amount of power over both consumers and suppliers as a result. Both major chains denied that was the case. 

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Tauranga's local government civil war has been thrown into sharp relief by the release of a Review and Observation report. The Bay of Plenty Times-Herald reports some councillors did not take the findings of the review well, particularly around the suggestion that whether outside assistance was now needed. Mayor Tenby Powell is in favour of a crown manager being appointed, telling Newstalk ZB last night that he accepted the findings of the report. Decisions on the report will be made at an extraordinary meeting on Friday. 

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Perhaps it was inevitable, but it seems bitterness is brewing between Jami-Lee Ross and Advance NZ, and their erstwhile allies from the NZ Public Party. Newsroom's Mark Jennings has looked at some of the claims flying around in the split, which took place pretty much straight after a disappointing election result for the alliance. The problem at the heart of it appears to be control of money, and some of the various branding assets built up over the course of the year. 

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It's just a prediction from a bank economist at this stage, but there's been a suggestion the Labour government will change its mind about some form of wealth tax. Radio NZ has reported the prediction from Westpac chief economist Dominick Stephens, who foresees significant public anger in the next few years over rising inequality. "My pick is that some form of tax on wealth, land or capital gains will get over the line in the mid-2020s, when societal dissatisfaction with rising wealth inequality reaches boiling point," Stephens said. All of which, keen observers will note, have been extremely firmly ruled out while Jacinda Ardern remains PM.  

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A conservation success story: The number of kākā in a Waikato forest is booming, reports One News. The population of the bird in Waikato's Pureora Forest has approximately quadrupled in the space of 20 years, with strong predator control and conservation efforts being the cause. Other birds are also flourishing in the area. 

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A few of you emailed in yesterday to ask for the link to the Bloomberg BusinessWeek piece on the One America Network. And here it is. For those that missed yesterday's edition, OAN is an upstart US TV station that has pushed the boat out way further into Trump territory than what Fox ever managed, and now faces an uncertain future with their patron leaving office. 

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A celebration of someone we work with closely, and her remarkable year. Dr Siouxsie Wiles, who you'll all know from her amazing science communication work, has been handed the Supreme Award at the 2020 Women of Influence Awards. A massive congratulations and thanks to her from all of us at The Spinoff. 

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Got some feedback about The Bulletin, or anything in the news?
Drop us a line at thebulletin@thespinoff.co.nz

Right now on The Spinoff: The Child Poverty Action Group’s Susan St John writes about how Working for Families creates a dichotomy between 'deserving' and 'undeserving' poor. Josie Adams meets the best real estate auctioneer in the country. Leonie Hayden writes about an ambitious project to profile 100 influential Indigenous women. Interior designer Jonathan Goss looks at how 2020 has changed the design needs of food outlets, perhaps forever. Michael Andrew went along to Semi-Permanent, a showcase of what the creative industry can offer the country. Alexander Stronach reviews Monsters in the Garden, a "comprehensive attempt to map out the course of New Zealand science fiction and fantasy". And we've got a brand new Frame documentary, which looks at the spectrum of experience among people who identify as asexual. 

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For a feature today, an in-depth look at why so many young trans people end up homeless in New Zealand. Radio NZ journalists Susan Strongman and Murphy are currently producing a series on social and economic issues around being trans, and this piece blends a really difficult personal story with the wider problems many face. Here's an excerpt: 

About six months later, Angelo and his sister found themselves huddled together in the wintry darkness on the road outside their home, having been kicked out after the fight with their parents over his gender.

Angelo hadn't told any of his friends that his parents were abusive. But his sister had told hers. She called one, who came to pick them up. The siblings stayed with the friend for a fortnight, until their parents cooled off and let them return. It was the start of an unsettling cycle that has never really ended for Angelo - his parents blowing up and kicking him out, being allowed home for a period of calm, leaving when things got bad again.

On that first night, Angelo doesn't know where he would have ended up if he hadn't been with his sister. "Luckily, I had her and she has good friends."

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In sport, gun Wellington batsman Devon Conway has been given his first shot at the Black Caps, being called in to the T20 squad to play the West Indies, reports Cricinfo. Conway came over from South Africa several years ago, and has routinely been bossing domestic cricket ever since. He'll take the spot of Kane Williamson, who is being rested ahead of the test series. However Conway won't be pulling on the whites for New Zealand quite yet, with stability in the test squad preferred for now. 

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