Blumsky Mark: Affordable Housing: Enabling Territorial Authorities Bill — First Reading 
Blumsky Mark: Affordable Housing: Enabling Territorial Authorities Bill — First Reading 
[Volume:644;Page:13893] 
MARK BLUMSKY (National) 
: 
 I rise to speak to the Affordable Housing: Enabling Territorial Authorities Bill. “My house my castle” is a term that is well used when people talk about their houses. I suggest that with this bill that may not be the case anymore. Under this legislation it could be that when people want to sell their houses they will sell at prices that are not the prices they want to sell them for or the prices they would expect because in this legislation there is a caveat that will be placed to ensure that people’s houses when sold will be affordable. 
Normally people would want to be able to sell their houses for what they are worth. With this legislation they will not be able to. Other people will decide what their houses can be sold for. If a person gets one of these affordable houses that is fine but when that person sells it he or she will not be able to sell it for the price that it may well worth—someone else will decide the price. 
People in this situation may say: “OK fine I bought my house cheaply; therefore maybe there should be an obligation to sell it cheaply to keep the affordable housing stock at a certain level.” But I ask members not to forget that if a house is bought cheaply initially it is because it was made cheaply. It either had a smaller floor plan one garage less or maybe not such ritzy fittings inside the house. A house bought cheaply as part of a bigger development will have some characteristics about it that make it cheaper. People will say: “Fair enough I bought it cheaply it should be sold cheaply.”  
But the problem is that when Kiwis own their own house no matter what price they bought it at many have a pride in it. It is their castle. They make adjustments to it they develop it they put on an extra room they make the garden bigger they add to it they built on—it is the Kiwi way. It is DIY and it is what we do as Kiwis. They add value to the house because they love their house. But what will happen with one of these houses is that the owners ain’t going to be able to get the value for their efforts in the house because someone else will decide what price they can sell it for because affordability needs to be retained.  
So why would people bother? If they get one of these affordable houses why would they then bother adding value to it? Why would they put in the effort? There is no upside. At the end of the day they will have probably the worst house in the best street because they will not bother. Their neighbours will love it when the person next door has the worst house in the best street. What could well have started as a pretty swanky smart development with 20 houses—a couple of them being affordable and all of them looking pretty sharp at the start—will at the end of the day be dragged down. It is the old story: the worst house in the street drags down the rest of the street. My goodness there are a lot of people who have put their life-savings into investing in houses and that investment will be impacted on.  
It is sad that the Labour-led Government when it wants to make housing affordable and talks affordable housing immediately picks on the developer to fix that. Why should it pick on the developer? It is because developers are a very easy target. There are not very many of them so there are not too many lost votes. It is a bit like deciding: “Right affordable housing—let’s make the developers do the work. Let’s blame them; let’s make them carry the can.” To use an analogy it is a bit like deciding that kids need to be healthier. To make kids healthier we think they need to eat more apples so we pass legislation that forces greengrocers to sell two apples every day to every customer. But the problem is that not everyone will want to buy those apples. Yet if there is legislation forcing the greengrocer to give away green apples to the kids they will be given away—they will not be sold. And who will carry the cost of those apples? I can tell members now that it will certainly not be the greengrocer; it will be every other customer who will carry the cost. There is no difference in what this legislation is doing.  
In the last 24 hours I have managed to speak to a couple of significant property developers who build a lot of housing in New Zealand. I have to say they all endorsed the concept of affordable housing. There is no doubt that these people would love to see more affordable housing in New Zealand. But none of them felt that this bill and what it is trying to do is in fact the answer.  
It was thrown at me—and I thought it was a very good point—that when cars were first manufactured Henry Ford decided he wanted cars to be available for the masses to be cheaper so he developed the Model T. He developed an affordable car for the world to drive. He did it because he manufactured a lot of the same car. So it makes one wonder—as it was thrown at me yesterday—why we do not encourage one or two manufacturers to make the Model T of houses and develop and produce a range of houses that are all very similar bulk produced and available to be put on the land that becomes free. I thought there was some real merit to that. The only difference is that we would probably not want all the houses to be painted black as the Model T was—the cars were any colour a person wanted but they had to be black. By definition if houses are mass produced in that way they will be cheaper.  
Then the issue just comes down to land availability and that is when councils can play their role in this crusade on making sure there is affordable housing. A council can and does have a huge role in making sure that land is available. Councils can revisit their city boundaries. They can revisit the containment line that they put around cities currently beyond which development cannot go. Land on the other side of that fence could become available for housing which it currently is not. I know Wellington City for example actually puts the containment line around Wellington City to force housing development to go to infill. We are suggesting that maybe that containment line should disappear to make land available for housing. The other thing that could happen is that councils instead of selling land could make land available for affordable housing and charge just a lease—a rental of say 5 percent return on the leased property; a subsidised mortgage. A council could own the land and lease it to the housing owner on a perpetual lease. By having that subsidised mortgage the land costs become a lot more affordable.  
One has to wonder just how much difference this bill will really make. In a 20-storey apartment building with 120 apartments 12 of those might be made to be affordable. If there were 100 of those 20-storey apartment buildings there would be 120 of those apartments that may be affordable. At the end of the day what difference will that make? I say that because in San Francisco which is often used as an example of a place where there is good affordable housing in the last 10 years 278 affordable houses a year have been developed using the type of concept suggested in this bill—that is 278 houses a year in a city of 7 million people. So we have to wonder whether this is the solution.  
The bigger picture is the bigger answer and that is to make sure that personal tax cuts are delivered—and the National Party will do that. The bigger answer is to enable people to have more money in their pockets to sharpen up the regulatory regime to keep interest rates lower and to reform the development rules and make sure the Resource Management Act behaves—because it certainly does not behave—to make it easier to build a house. The bigger picture is the answer not picking on developers and suggesting that that is the way to answer the problem—it is not.