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Housing Affordability
Home ownership rates have fallen to a historic low and many attribute this to a lack of affordable housing. But how did we get here and what do we do about it? Together the parties point to almost everything under the sun, from consenting rules to immigration to tax.
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;" class="bgcolor">Green
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Save thisBuild 10,000 homes to sell to low-income earners through rent-to-own scheme(...)Why
The Green Party believes that it’s too hard for many people to both pay rent and save for a home deposit or mortgage. The government has a responsibility to make affordable housing available for everyone. Building new homes to sell to low-income earners over time should help make homeownership possible for those who would otherwise not be able to afford it.
HowThe Green Party would build 15,000 new homes. 10,000 of these would be sold over ten years to households who can’t afford a mortgage or deposit through the ‘Home for Life’ rent-to-own scheme. The remaining 5,000 homes would be sold to community housing providers.
Under the scheme, homeowners would make a weekly payment to the Government of up to 30 per cent of their income. Part of this payment would be rent and the rest would gradually buy equity in the home. With each payment, part of the ownership of the home would transfer to the household.
The scheme would be open to individuals or households who earn less than the median income in their region. An asset test would also apply. If demand exceeds supply, houses would be allocated by ballot. All people in the scheme would need to complete a household budgeting course.
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Save thisIntroduce a capital gains tax on all assets except family homes(...)Why
The Green Party believes the current tax system is unfair because capital gains on property are not taxed even though they are a kind of income. This both increases the divide between rich and poor and encourages speculative investment in property, which drives house prices up.
Taxing capital gains should make houses more affordable by dampening property speculation, and make the tax system fairer. It should also benefit exporters as less borrowing for investment in property should reduce the value of the New Zealand dollar.
HowThe Green Party would tax investors on the capital gains they make from buying and selling assets, including real estate.
This tax would apply to all assets bought and sold in New Zealand by both people and corporations, whether they live in New Zealand or overseas, except for family homes.
The taxed capital gains would be treated as income for tax purposes. The value of the asset would be inflation adjusted when assessing any capital gain. The tax would only be payable when the asset was sold, and not as the gain accrues over time.
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Save thisRestrict residential property ownership by non-residents(...)Why
The Green Party believes that non-residents are increasing demand for property, driving up house prices. Banning non-residents from buying residential land should reduce demand for property, making houses more affordable.
HowThe Green Party would limit the sale of residential land to New Zealand citizens and permanent residents. The ban might include a sunset clause which would require the law to lapse after a period of time, requiring any future government to reconsider whether the ban is still necessary.
The Green Party would also collect information on the number of non-resident housing speculators in New Zealand.
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Save thisClose the negative gearing and combined collateral exemption loopholes(...)Why
The Green Party believes that loopholes like negative gearing and the combined collateral exemption make property an especially attractive investment, which increases demand for property and drives up house prices.
Negative gearing is when an investor’s losses on an investment property, such as when mortgage interest payments exceed rent income, are treated as expenses against the investor’s other income for tax purposes.
The combined collateral exemption allows borrowers with owner-occupied and investor collateral to bypass the usual loan-to-value ratio restrictions which are designed to slow investment demand for property. Closing these loopholes should reduce demand for property, making houses more affordable.
HowThe Green Party would close loopholes for property speculators such as negative gearing and the combined collateral exemption.
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Save thisAllow student loan borrowers to defer student loan repayments to save for a home deposit(...)Why
The Green Party believes that houses are too expensive for many New Zealanders, particularly those with student loans who have to pay 12 percent of their income on student loan repayments. People working hard after studying deserve to find secure housing before worrying about paying back their student loans.
Allowing people to save for a first home before paying off their student loans should make buying a first home easier, and encourage young people to stay in New Zealand, improving student loan repayment levels in the long run.
HowThe Green Party would allow student loan borrowers to divert part or all of their mandatory student loan repayment into a housing deposit savings account.
The savings accounts would be held and managed by Inland Revenue. Any diverted payments not allocated to buying a first home would be transferred back to the student loan account.
To be eligible for this ‘Faster into Homes’ plan, borrowers would need to earn over the repayment threshold of $19,000.
;" class="bgcolor">Māori Party
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Save thisBuild 90,000 houses by 2022 for social housing and private sale(...)Why
The Māori Party believes that everyone should live in a safe, warm, healthy and affordable whare. But there’s a housing crisis in Aotearoa, particularly for Māori and Pasifika people who have the lowest rates of home ownership and the highest rates of homelessness.
Building 90,000 houses over the next five should reduce homelessness while providing more affordable homes for first home buyers.
HowThe Māori Party would build 90,000 houses by 2022. These would be a mixture of social housing and apartment housing developments.
60,000 of these would be in Auckland and the others would be in other areas of New Zealand with severe housing shortages.
Half of the houses in Auckland would be built by 2019. The other half would be built over 2019 to 2022.
The houses outside of Auckland would be built over three years.By 2025, the Māori Party aims to have built a total of 120,000 houses in Auckland. By 2045, it aims to have 400,000 built across the country.
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Save thisEstablish a Minister for Māori and Pasifika Housing(...)Why
The Māori Party believes that everyone should live in a safe, warm, healthy and affordable whare. But there’s a housing crisis in Aotearoa, particularly for Māori and Pasifika people who have the lowest rates of home ownership and the highest rates of homelessness.
Housing is currently dealt with by three different ministers, and the Minister for Māori Development role doesn’t have enough resources to fully deal with Māori housing issues. Establishing a Minister for Māori and Pasifika Housing should lead to a more focussed approach to Māori and Pasifika housing issues.
HowThe Māori Party would establish a Minister for Māori and Pasifika Housing.
The Minister would be responsible for all housing related issues that Māori and Pasifika face, including homelessness to homeownership. One of goals would be to end homelessness by 2020.
The Māori Party would also develop a national housing strategy with specific reference to the rights and interests of Māori under Te Tiriti o Waitangi. A Housing Sector select committee would be established in Parliament to design the strategy.
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Save thisIncrease financial support for low-income first home buyers(...)Why
The Māori Party believes that everyone should live in a safe, warm, healthy and affordable whare. But there’s a housing crisis in Aotearoa, particularly for Māori and Pasifika people who have the lowest rates of homeownership and the highest rates of homelessness.
Many low-income families cannot afford the deposit to buy a home. Adopting an all of government approach to help low-income first home buyers should help more whānau into secure housing.
HowThe Māori Party would adopt an all of government approach to helping low-income families buy homes.
The Māori Affairs low interest housing loan would be reintroduced for Māori and Pacific families. All successful loan applicants would be provided with financial literacy and budgeting support.
The Māori Party would also introduce ‘rent to buy’ and ‘equity financing’ schemes. These would allow people to buy the home they live in over time.
Whānau would also be able to capitalise any income support payments they receive as a deposit for a home.
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Save thisSubsidise private developers to include affordable houses in new developments(...)Why
The Māori Party believes that everyone should live in a safe, warm, healthy and affordable whare. But there’s a housing crisis in Aotearoa, particularly for Māori and Pasifika people who have the lowest rates of homeownership and the highest rates of homelessness.
There are too few incentives for housing developers to build affordable houses. Subsidising the construction of affordable houses should provide more affordable houses while ensuring developers can stay in business.
HowThe Māori Party would subsidise private developers to include some affordable houses in their housing developments.
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Save thisIncrease the number of Māori and Pasifika in the construction sector(...)Why
The Māori Party believes that everyone should live in a safe, warm, healthy and affordable whare. But there’s a housing crisis in Aotearoa, particularly for Māori and Pasifika people who have the lowest rates of homeownership and the highest rates of homelessness.
Providing more support for Māori and Pasifika involvement in the construction sector should increase the construction workforce, leading to more affordable houses.
HowThe Māori Party would increase the number of Māori and Pasifika working in the construction sector through a range of initiatives, including trades training and scholarships.
The Māori Party aims to have 400,000 new homes built by 2045.
;" class="bgcolor">NZ First
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Save thisBuild 140,000 houses to sell to first home buyers(...)Why
New Zealand First believes that New Zealand is building fewer homes now than in the 1970s and this is making homes unaffordable, particularly for first home buyers. This can be addressed by direct government intervention. Coordinating the development and sale of new residential properties should make more affordable homes available for first home buyers.
HowNew Zealand First would establish a state agency, Kiwi Housing, to buy land and build residential housing. This housing would be sold to first home buyers.
Twenty-five year loans would be provided to buyers by the agency on affordable terms. A Housing Commission would be established to conduct strategic planning of the programme.
NZ First estimates this programme would result in 20,000 houses a year being built in Auckland over the next seven years.
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Save thisRestrict land ownership by non-residents(...)Why
New Zealand First’s preference is for New Zealanders to farm and look after the land for future generations. But New Zealand’s primary industries are slipping into foreign control. Immigrants are also increasing demand for residential property, driving up house prices.
Restricting non-residents ownership of land land should reduce demand for property, bringing down house prices and ensuring wealth generated by the primary sector stays in New Zealand.
HowNew Zealand First would restrict ownership of land by non-residents. Non-residents would only be able to buy houses where a genuine need to do so can be established. All sales of farmland to non-residents would be banned.
Businesses, corporations, joint ventures and overseas-based trusts and funds would need to have majority New Zealand shareholdings to purchase land. The Overseas Investment Office would be responsible for monitoring and enforcing these rules.
As part of this policy, New Zealand First would create a public register of non-resident property ownership. This would record the name and nationality of buyers, the amount and value of land bought, and where the land is.
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Save thisChange the building consent process to allow faster approvals of new housing(...)Why
New Zealand First believes that the current consenting process makes it too difficult for local authorities to approve development and make land available for housing. This is driving up house prices by making construction more expensive. Giving local authorities more powers and incentives to provide affordable housing should help to bring house prices down.
HowNew Zealand First would change the consents process to allow faster approvals of new housing.
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Save thisEncourage local authorities to provide more affordable housing and to make more land available for housing(...)Why
New Zealand First believes that a shortage of housing and land for building new housing contributes to increasing house prices. Local authorities should have greater involvement in providing affordable housing and releasing land for development.
HowNew Zealand First would give local authorities greater powers and incentives to provide more affordable housing options and to make more land available for housing.
;" class="bgcolor">Labour
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Save thisBuild 100,000 houses to sell to first home buyers(...)Why
Labour believes that the possibility of homeownership is slipping away for most people. Too few houses are being built, which is driving up up prices. And of the houses that do get built, too few are affordable.
The government needs to take the lead in coordinating the constructions of new homes. Doing so should help overcome the shortage of affordable homes for New Zealanders.
HowLabour would build 100,000 homes, called Kiwibuild homes. Half of these would be built in Auckland.
Houses would be sold at cost and only to first home buyers. This means houses would cost $500,000-$600,000 in Auckland and $300,000-$500,000 elsewhere. Buyers would be required to repay any capital gain to the government if they sell the home within five years.
The Kiwibuild programme would be managed by a new Affordable Housing Authority, which would hold surplus urban Crown land and have fast-tracked planning powers. The Authority would partner with the private sector, councils and iwi to undertake major development projects. Labour would also partner with hapu, iwi and Māori organisations to develop affordable housing in some cases.
Typical developments would be half KiwiBuild and half private developments. Infrastructure like schools, roads and community facilities would be built as a part of the developments.
The Authority would be allocated $100m initially, in addition to $2 billion invested in the Kiwibuild programme. This investment would be recycled as houses are sold and returned to the Crown at the end of the programme.
Labour anticipates that its Dole for Apprenticeships programme would help provide the labour force for this new construction. This programme subsidises employers to take on young people for apprenticeships, including in building and construction.
The Affordable Housing Authority would also have a dedicated Māori Housing Unit which would ensure housing policies are tailored to meet the specific needs and aspirations of Māori. Labour would investigate the option of shared equity and rent to buy for KiwiBuild houses with iwi.
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Save thisRestrict residential property ownership by non-residents(...)Why
Labour believes that non-residents are increasing demand for property by making speculative investments. This is driving up house prices, making housing unaffordable for most people.
Banning non-residents from buying residential land unless they build a new home should both reduce demand for property and encourage the construction of new homes. This should give New Zealanders a better shot at buying a home.
HowLabour would ban non-residents from buying residential property unless they build a new home. This ban would also apply to foreign trusts and corporations.
Students, skilled migrants and temporary residents in New Zealand for more than a year would still be able to buy existing homes provided they are sold when they leave New Zealand. The rules would be enforced by requiring non-resident buyers to gain consent for residential land purchases.
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Save thisRemove limits on Auckland urban boundaries and density(...)Why
Labour believes that urban growth boundaries and restrictions on housing density limit the supply of new homes, increasing house prices. This is particularly a problem in Auckland. Removing limits on urban growth and density controls in certain areas should allow more houses to be built on less land, increasing supply and bringing down house prices.
HowLabour would issue a National Policy Statement under the Resource Management Act to relax housing density rules in Auckland.
This change would allow higher density construction in town centres and on transport routes, and would include removing Auckland’s urban boundary and using intensive planning to guide development.
Land of special value in growth corridors would be acquired and set aside for transport, public space and utilities, while new transport infrastructure would be developed in anticipation of housing developments.
Infrastructure for new developments would be funded by infrastructure bonds. These would tap international bond finance and package it for new developments, with the debt then serviced through targeted rates on the properties in the new development.
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Save thisTax capital gains on investment properties sold within five years of purchase(...)Why
Labour believes that the possibility of homeownership is slipping away for most people. Speculative investment is driving up house prices beyond the reach of most people.
The ‘bright line’ test introduced by the National Government effectively imposes a capital gains tax on capital gains from houses sold within two years of purchase, but this is too short a time to deter speculative investment.
Extending the test to five years should better discourage speculative investment and make the tax system more fair by taxing property investment income.
HowLabour would tax capital gains on investment properties when sold within five years of purchase. This change would extend the so-called ‘bright-line’ test from two years to five years.
The current exemptions from the bright line test would continue and it would not apply to owner-occupied or inherited properties. The rule would also only apply to properties bought after the rule change.
Labour would also change negative gearing rules to prevent speculators from claiming losses on investment properties as expenses to reduce their tax on other income.
Under the negative gearing tax rules, investors can claim losses from investment properties, such as when mortgage interest payments exceed rent income, against their other income as an expense for tax purposes. This change would be phased in over five years with loss deductibility reducing by 20 per cent a year.
Labour would also create a Working Tax Group to advise on possible changes to the tax system. Labour would consider proposals from the group to introduce a capital gains or land tax, but would not consider applying these to family homes.
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Save thisExpand programmes to support Māori home ownership(...)Why
Labour believes that all New Zealanders should have a fair shot at owning a place of their own. But the Māori homeownership rate has fallen to barely a quarter and 14,000 Māori are homeless.
It it too tough for Māori to access private mortgages and government housing policies if there’s more than one owner of a piece of land. Working with Māori organisations to expand support Māori home ownership programmes should help more Māori into homes and reduce homelessness.
HowLabour would expand homeownership support programmes for Māori.
An additional $20 million would be invested over four years into non government and Māori housing providers who deliver supported home ownership services such as budgeting advice.
Labour would also reform the Kāinga Whenua and Welcome Home Loans schemes so that Māori can access home loans for land held in a whānau trust with multiple owners.
Under the Welcome Home Loans scheme, Housing New Zealand underwrites bank loans so that lenders can provide loans to those who would otherwise sit outside of the bank’s lending standards. The Kāinga Whenua scheme extends Kiwibank home loans to land with multiple owners.
Labour would also work with banks, iwi and Māori organisations to allow iwi and Māori organisations to access mortgages collectively on behalf of their members.
Labour would also investigate the option of shared equity and rent to buy for KiwiBuild houses with iwi.
;" class="bgcolor">National
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Save thisBuild 20,000 new houses for private sale in Auckland(...)Why
National believes that the shortage of affordable homes in Auckland is the result of a lack of supply of land for new housing. At the same time some state housing land is not being used efficiently.
Redeveloping those state houses and other Crown land in partnership with private developers, and selling new houses to private buyers, should harness private enterprise to increase the amount of affordable and social housing available for Aucklanders.
HowNational would continue its Crown Building Project, which involves the redevelopment of Crown land in Auckland into mixed social and private housing. 8,300 state houses would be demolished and 34,000 new homes built over ten years. The net addition to the housing stock would be approximately 26,000 homes.
About 20,000 of these new houses would be sold to private buyers while the rest would be used for social housing. Of the houses sold to private buyers, 35 percent would be classified as ‘affordable’, meaning they would be sold for less than $650,000. The redevelopments would integrate social housing, affordable housing and market-priced housing together. The redevelopments would be undertaken by private developers in partnership with the government.
The Crown Building Project is an umbrella term for a number of different projects, some of which have been underway for several years. The projects include the Tamaki and Hobsonville developments, the Ministry of Social Development’s Social Housing Reform Programme and Housing New Zealand’s Auckland Housing Programme, and the Crown Land Programme, which also involves some construction in Queenstown and Christchurch.
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Save thisReplace parts of the RMA with new urban planning law(...)Why
National believes that cities need the ability to adapt and develop quickly as the economy grows, while respecting and improving the urban environment.
The current law, the Resource Management Act, has a one-size-fits all approach that has slowed the development of cities, limited their economic performance and reduced the supply of housing and infrastructure.
Reform to the Resource Management Act has improved the process but no more improvement can be made by changing that law. Creating new urban planning laws should encourage more responsive planning, faster development, and better protection for the environment in growing cities
HowNational would replace parts of the Resource Management Act with a new urban planning law.
The law would contain separate planning and environmental regulations, and would be aimed at encouraging more responsive planning, faster development and better protection for the environment. It would facilitate the use of urban development authorities to develop new housing in cities.
The new law would incorporate some rules which are now in the Local Government Act and the Land Transport Management Act.
National would also consider changes to the planning rules for non-urban and rural areas. These changes would be through the existing Resource Management Act.
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Save thisContinue using Special Housing Areas to fast-track building consents for homes in high demand areas(...)Why
National believes that current planning rules are driving house prices up because they slow down construction, reducing the supply of new houses. Relaxing the rules in areas of high demand should allow for more homes to be built more quickly.
HowNational would continue designating certain areas of high housing demand as Special Housing Areas, allowing planning rules to be fast-tracked. There are currently over 213 Special Housing Areas across New Zealand.
This approach follows Housing Accords between central government and local councils, which are agreements allowing local councils to identify Special Housing Areas and grant consents more freely in those areas.
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Save thisContinue to lend to local councils to build new housing infrastructure(...)Why
National believes the main cause of high house prices is a lack of supply. The high cost of infrastructure, such as roads and water infrastructure, contributes to this by making it too expensive to build housing developments.
The government is in a better position to borrow money for these purposes than local councils. Lending money to councils to fund infrastructure should allow councils to build more infrastructure sooner than they otherwise could, facilitating more new housing development.
HowNational would continue to lend to councils for housing infrastructure, such as roads and water infrastructure, in high growth areas through the Housing Infrastructure Fund.
The fund is only available for substantial new infrastructure investments that support more new housing, not to replace existing infrastructure.
Councils need to repay the investment or buy back the assets once houses have been built. Funding may have conditions attached, such as faster processing of resource consents.
As a part of Budget 2017, National allocated a further $3.5 million to administer this fund.
National has also repurposed Crown Fibre Holdings, the government company responsible for broadband roll out, to become Crown Infrastructure Partners.
The company will now undertake infrastructure projects where local councils cannot afford to do so, supported by central government funding. Councils will have the option of purchasing the infrastructure in the future.
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Save thisIncrease grants to first home buyers(...)Why
National believes every New Zealander should be able to buy their own home if they want to. Currently, some first home buyers have difficulty saving a big enough deposit to own a home.
Increasing grants to first home buyers should make it easier for young New Zealanders to buy their first home.
HowNational would increase grants to first home buyers, called the HomeStart grant, by $10,000.
This would allow for grants of up to $20,000 for an existing home or $30,000 for a new build.
National would also simplify the process for applying for the grants to allow people to apply for a government backed Welcome Home Loan at the same time.
;" class="bgcolor">TOP
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Save thisTax income from all productive assets and redistribute to below-average income earners(...)Why
The Opportunities Party believes that the current tax regime favours property owners and unfairly burdens wage earners. This is because there is a loophole for non-cash income—only cash income from assets is taxed, not in kind income.
For property in particular, this means homeowners get accommodation without paying either rent or tax on this benefit, unlike landlords who pay tax on rental income or people with savings who pay tax on their savings.
This loophole encourages speculation, which drives up house prices, and increases inequality by giving a handout to property owners. It also is bad for the economy because it encourages investment in assets rather than other more productive uses.
Taxing all productive income from assets and redistributing it to below-average income earners should create a fairer tax system by reducing inequality, while also reducing property speculation and stimulating the economy.
HowThe Opportunities Party would impose a tax on all productive assets, including on houses and land, by deeming a minimum rate of return on those assets for tax purposes. Those assets would be deemed to generate an income which would be taxed just as rent from tenants is taxed as income for landlords.
All additional tax collected by this policy would then be redistributed to people with below-average incomes through income tax cuts.
Owners of productive assets who already declare a level of income as high as the rate of return across their assets would be unaffected. The policy would also be phased in progressively by increasing the required minimum taxable earnings rate over several years to give asset owners time to adjust.
Homeowners over the age of 65 would be allowed to pay the tax via a mortgage to the IRD, payable on change of ownership, so as to avoid cash flow issues. Businesses facing a temporary or cyclical earnings downturn would be allowed to defer their minimum income tax for a period of up this to three years.
;" class="bgcolor">ACT
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Save thisReplace the Resource Management Act with less restrictive planning rules(...)Why
ACT believes that land use rules are a significant cause of high house prices, and are the single largest cause of poverty, inequality and sickness in New Zealand.
The Resource Management Act in particular gives too much power to councils to restrict development, and the consenting process is costly and time-consuming for applicants, including farmers.
The National Government’s reforms to the Act have not gone far enough and have made it worse by creating new provisions to involve iwi. Reforming the Resource Management At should ensure that property rights and economic growth are properly respected.
This should also make it easier for rural businesses to grow and reduce development costs, bringing down house prices.
HowACT would repeal the Resource Management Act. In its place it would introduce separate planning rules for urban and rural environments.
The new urban planning rules would apply to cities with 100,000 people or more. It would prioritise supplying land and infrastructure in response to demand, and would automatically permit development on land which had reached a certain value.
The law would also make zoning less restrictive, with fewer levels and types of zoning. Objection rights would be limited to people who are directly affected by new developments, excluding third parties. The law would include obligations to set out future infrastructure corridors.
ACT estimates these changes would allow for the construction of 600,000 homes in Auckland areas like Waitakere, Karaka, and Clevedon.
The new planning rules for rural areas would be designed to make it easier for rural businesses to operate and grow.
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Save thisAbolish the rural-urban boundary(...)Why
ACT believes that land use rules are a significant cause of high house prices, and are the single largest cause of poverty, inequality and sickness in New Zealand. The rural-urban boundary sets different planning rules for rural and urban areas and confines growth.
This arbitrarily restricts the number of houses that can be built in some place. Abolishing the rural-urban boundary should result in more houses being built, which should reduce house prices.
HowACT would abolish the rural-urban boundary. The rural-urban boundary is a planning rule preventing significant new urban development in rural areas.
ACT estimates that abolishing the rural-urban boundary would make room for 600,000 more homes in Auckland.
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Save thisShare GST revenue from housing construction with local councils(...)Why
ACT believes that the cost of infrastructure that councils must build to support new developments, like transport infrastructure, water and sewerage, discourages councils from approving new houses and subdivisions. This reduces the number of new houses being built, increasing house prices.
Sharing GST revenues from housing construction with councils should provide an incentive for them to approve more housing and greater flexibility to fund infrastructure.
HowACT would share a portion of GST revenue collected from the construction of new housing with local councils. Ordinarily GST is collected by the government. The shared revenue would be used by councils to cover the cost of core infrastructure.
Councils would also be given greater flexibility to raise funds for infrastructure, such as being allowed to charge special targeted rates on new developments.
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Save thisReplace building safety and quality standards with mandatory private insurance(...)Why
ACT believes that central and local government regulation is holding up the development of new houses. Replacing the current building inspections and compliance regime with mandatory private insurance should reduce the cost of compliance for builders and reduce the financial risk on councils.
Builders would have an incentive to get the lowest-cost insurance by proving they are constructing high-quality buildings. And insurers would have an incentive to find the most reliable builders and best building supplies to insure, so standards would still be upheld.
HowACT would remove local council’s responsibility for building certification. Instead, all new buildings would have to carry insurance for a period of 25 years. It would be up to insurance companies to decide what to do to ensure the buildings were of a high quality.