The Dim-Post

September 19, 2016

Unfortunate experiment watch

Filed under: Uncategorized — danylmc @ 8:13 am

National’s grand plan to unleash the power of the market and remove the dead hand of the state from social housing reaches its absurd endgame:

Housing New Zealand has bought a South Auckland motel to help meet the area’s housing shortage – but ironically the existing residents will have to move out to make room for the homeless.

A spokesman said the agency bought the 10-unit Cimarron Motel in Waterview Rd, Takanini, as “part of our work to make more housing available in Auckland for those who require it urgently”.

But the motel was already being used for long-stay accommodation, and former resident Roland Stehlin said he was worried about what would happen to the remaining residents.

“There’s an elderly couple there who have been there 11 years, they have nowhere to go,” he said.

“We’ve got a family that’s in the house [formerly the manager’s house]. Their kids are all going to the school there. The last I heard was apparently they are going out to Pukekohe, now they have to find some way of getting their kids into school there.”

 

36 Comments »

  1. I wonder what price wa paid and who the former owners were. Good way to transfer excess state profits out to the private sector

    Comment by Ron Wilson — September 19, 2016 @ 8:39 am

  2. That elderly couple need to get with Bill English’s program and start being more rational actors.

    Comment by Sanctuary — September 19, 2016 @ 8:45 am

  3. Bill English knew all about making rational choices about housing. he had the state pay him to live in his own family home, and when he was found to be rorting the system, he had the goalposts moved.

    Comment by ghostwhowalksnz — September 19, 2016 @ 9:01 am

  4. Obviously not a perfect outcome but may not be daft as it sounds (when you look at it dispassionately)

    A.

    Comment by Antoine — September 19, 2016 @ 11:56 am

  5. Obviously not a perfect outcome but may not be daft as it sounds (when you look at it dispassionately)

    Please elaborate

    Comment by eszett — September 19, 2016 @ 3:09 pm

  6. Hostels, eh? Nice… (shudder)
    Sanc, what would YOUR government do? I mean, if you leave out the imaginary things like “build more houses” or “create more jobs in the regions”, etc. Remember, putting the brakes on immigration is racist. We know this, because UKIP called for it as a response to job and housing pressures in the UK and they are “racist”.

    Comment by Clunking Fist — September 19, 2016 @ 4:50 pm

  7. Mind you, the state could remove its dead hand by almost eliminating planning laws, and forcing councils to build infrastructure, partially funded by future rates, partially funded by developer contributions charged in a systematic way.

    Comment by Clunking Fist — September 19, 2016 @ 4:52 pm

  8. …leave out the imaginary things like “build more houses” or “create more jobs in the regions”, etc.

    Given the extensive history of NZ governments building houses and employing people in the regions, how is this “imaginary?”

    Comment by Psycho Milt — September 19, 2016 @ 5:52 pm

  9. The people thrown out could apply for emergency housing and then might even be able to move back into their old homes.

    Comment by Ric Stacey — September 19, 2016 @ 9:24 pm

  10. @eszett

    If you read the linked article, it says that the motel can house 11 families and just 2 of the previously occupying families have not found other accommodation. So, potentially a net decrease of 9 in families requiring emergency accommodation. Which would make the world a slightly better place.

    Comment by Antoine — September 19, 2016 @ 10:28 pm

  11. Or a significantly better place if you’re one of the lucky 9 families.

    A couple of hundred more motels and we’ll have the problem sorted!

    Comment by Conrad — September 20, 2016 @ 7:51 am

  12. Bearing in mind the site is being repurposed for emergency accommodation which means it may help quite a few people through very difficult patches over time.

    Won’t solve our housing problem single handedly, obviously, but every little helps.

    A.

    Comment by Antoine — September 20, 2016 @ 8:02 am

  13. These actions are extremely logical and rational, as long as you bear in mind that the government considers its primary function is to get itself reelected. If the polling suggests voters see you as disorganised, do-nothing time-wasters, then you need to do the minimum necessary to change that view and get your spin doctors to call it a Comprehensive Plan.

    Comment by McNulty — September 20, 2016 @ 8:02 am

  14. Patch-up, ad-hoc and rushed policy always costs multiples of well-researched and funded solutions.

    It wouldn’t be much of a stretch to conclude that this insanely high cost is a one-way transfer of resources to the private sector.

    Comment by kanuka — September 20, 2016 @ 9:59 am

  15. @kanuka

    So you think it was a mistake for the Govt to buy this motel for emergency housing?

    Do you think an incoming Labour/Green government would privatise it?

    A.

    Comment by Antoine — September 20, 2016 @ 11:20 am

  16. The unfortunate nature of the Auckland housing market is that we don’t build nearly as many homes as other places or as we need or as we could or as we might wish. The only good solutions to a housing shortage are absurd, because the situation is absurd.

    My personal favourite is we open up more land to development, smash the cartel like behaviour of Auckland land bankers and let more Auckland homes be built. This is of course absurd, because every Auckland property owner benefits from land-banking.

    Danyl’s favourite appears to be we should build lots of state houses in Auckland. This is also absurd, because it means the taxpayers would be funnelling $billions into supporting property land-bankers in Auckland.

    The only non-absurd option is my least favourite option, we should all leave Auckland.

    Comment by unaha-closp — September 20, 2016 @ 12:31 pm

  17. The government could always legislate to punish anything it deems to be a excessive profits from landbanking with a 101% tax. The most absurd aspect of the Auckland housing crisis has always been how this government would rather cut its own balls off with a rusty razor than use its power to act decisively to end market failure.

    Comment by Sanctuary — September 20, 2016 @ 12:49 pm

  18. @Sanc,

    Auckland property prices aren’t an example of market failure – the price of property in Auckland is an entirely predictable and rational outcome given the conditions (e.g. net migration, tax incentives, supply of land etc) every individual operating in the market faces. Quite frankly, I would be much more concerns about market failure and irrationality if weren’t rising.

    Comment by Phil — September 20, 2016 @ 1:20 pm

  19. “Given the extensive history of NZ governments building houses and employing people in the regions, how is this “imaginary?””
    One-off hits: 1) 1,000s returning from a war; 2) 1,000s of married women entering the “male” workforce for the first time.
    If the government were to try and build houses now, they would expose taxpayers to investment risk, whilst crowding out private investment (competing for the same pool of builders as private employers).

    Soaking up excess unemployed to plant trees in the regions is a fine a work-for-the-dole scheme in times of extreme hardship. But generally, the modern left view work-for-the-dole as some kind of infringement of hooman rights.

    “The government could always legislate to punish anything it deems to be a excessive profits from landbanking with a 101% tax. ” 101% of what? The value? But, in fairness, Sanc, like the RBNZ’s various measures, a tweek to taxes may be a good incentive. How about rates based on land value, not capital value? Overall rates need not go up, but the redistribution would see land-bankers pay far more, families pay far less. That would be an incentive to “maximise” the income generated by the land. And if you are not earning an income from the land (i.e. rent) then rates are not tax deductible.

    Comment by Clunking Fist — September 20, 2016 @ 2:21 pm

  20. Overall rates need not go up, but the redistribution would see land-bankers pay far more, families pay far less. That would be an incentive to “maximise” the income generated by the land.

    Or if you wanted to be really radical, a land tax rebate based on preferred usage in certain areas.

    Comment by Gregor W — September 20, 2016 @ 3:50 pm

  21. Radical, yes. It’s called picking winners, and sometimes appears to work, but seldom actually does.

    Comment by Clunking Fist — September 20, 2016 @ 4:35 pm

  22. “The government could always legislate to punish anything it deems to be a excessive profits from landbanking with a 101% tax.”

    Remember in 2014 when you were concerned about the government arbitrarily punishing those it deemed unhelpful?

    Comment by Ortvin Sarapuu — September 20, 2016 @ 4:56 pm

  23. The point isn;t about a 101% tax, it is that the government has all the power it needs to deal with this problem. But because our minster of finance is an unimaginative, over-rated treasury square with a boring haircut who got the religion in the 1980s and can’t imagine life without it, the government won’t.

    Comment by Sanctuary — September 20, 2016 @ 7:40 pm

  24. “with a boring haircut”

    Seriously?

    Comment by Ortvin Sarapuu — September 20, 2016 @ 7:53 pm

  25. “with a boring haircut”

    Seriously?

    Subtly different from the ‘special person’ shearing gang special once favoured by Richard Prebble?

    Comment by Joe W — September 20, 2016 @ 9:37 pm

  26. 23.The point isn;t about a 101% tax, it is that the government has all the power it needs to deal with this problem.

    So does the council, the government “could” override the council or the council “could” not need overriding.

    Unfortunately the National Party is the government and fully aware that its voters derive great short term benefits from the problems – they are going to do nothing. It is fairly heartless and short term thinking, but it makes political sense for them to plead ultimate respect for the democratic process of Auckland Council and not to interfere.

    Unfortunately the Labour/Greens are the opposition and run the council, use opposition politics to blame the government for everything. The political point scoring is great – the government could fix the problem, but don’t – therefore it is the government’s fault.

    The Auckland housing crisis proves the Left are more caring and would be capable of providing more innovative solutions if they were in government (capital gains tax, land tax, stringent immigration controls and so on). Yet the Auckland housing crisis demotivates core Left of Centre Aucklanders who see their interests being neglected by a Left of Centre council who refuse to use potential free market solutions to the problem. (Also Maori tribes who hold large chunks of land are adverse to the idea of a land tax and some communities in South Auckland aren’t sure stringent immigration controls are the way forward.)

    Meanwhile the Auckland housing market motivates core Right of Centre supporters to vote to protect their interests.

    The Left wins the internet. But the Right wins the polls.

    Comment by unaha-closp — September 21, 2016 @ 10:00 am

  27. Radical, yes. It’s called picking winners, and sometimes appears to work, but seldom actually does.

    Yeah, not not so much. The State picks winners all the time. They just like to pretend it’s the free market.
    And it often “works” inasmuch as it often benefits the sectors / stakeholders that it is designed to, mostly because others bear the cost / the costs are treated as irrelevant externalities.

    Comment by Gregor W — September 21, 2016 @ 1:43 pm

  28. “And it often “works” inasmuch as it often benefits the sectors ”
    That’s my point. It’s corporate welfare, and is usually direct taxpayer funding, and/or captive regulation.
    But it “doesn’t work” in so much as it destroys overall (what economists call) Social Welfare. That is, prices may be lower without the regulations. Without subsidies, resources used in the industry may be put to “better” use in other, unsubsidised, industries.

    Comment by Clunking Fist — September 21, 2016 @ 5:04 pm

  29. The trouble though CF, is that the magical thinking of economists espousing welfare / maximal utility models doesn’t really exist outside of textbooks, lecture theatres and policy documents.

    So whether or not the State picks winners is really immaterial.

    It’s which winners that are picked (and for what reasons) that’s important.

    Comment by Gregor W — September 21, 2016 @ 8:07 pm

  30. I’ll support Antoine, since all the others are just trying to change the subject. The SOE actually doing social housing provision seems a good move and nobody has identified a downside to it.

    Some may say the Nats are just trying to do piecemeal nationalisation by stealth: Danyl & prior commentators have been kind to not suggest this. The Nats would point out that the SOE just happened to decide to be altruistic, `nothing to do with us’. Having paid the govt a $118m dividend for 2015/16, surely they can afford to be generous to a few poor folk here and there? Others may say that this practice of socialism by the govt is just another example of John Key replicating Helen Clark’s modus operandi, nothing new. Patiently, the Nats would point out that SOEs are independent corporations, and this one just happened to lapse into the practice of socialism, in a small way, just a one-off, nothing to do with us..

    Comment by Dennis Frank — September 21, 2016 @ 8:59 pm

  31. @Dennis

    I don’t think you understand how SOEs in general or HNZ in specific work

    A.

    Comment by Antoine — September 21, 2016 @ 9:53 pm

  32. nobody has identified a downside to it…..except in the original Herald article which stated that ‘the motel was already being used for long-stay accommodation’ but uprooting a few families isn’t really a downside. Apparently.

    Comment by paritutu — September 21, 2016 @ 10:00 pm

  33. Okay, Antoine, how about you have a go at explaining the bit about them that you think I don’t understand. As someone who has been observing these beasts since they emerged, and worked in one, I’m probably representative of most voters, so any elucidation you can provide would serve the public interest, right?

    Comment by Dennis Frank — September 22, 2016 @ 6:58 am

  34. Your comment above suggests that you think HNZ is purely profit driven and has no social housing objectives. Is that what you think? If so, then I’ll explain why you’re wrong. If not, then your comment was poorly expressed IMO.

    A.

    Comment by Antoine — September 22, 2016 @ 7:50 am

  35. No I don’t think that. My comment was intended as a satirical attempt to illuminate the nuances of the situation. Unsurprising if its brevity made it seem poorly expressed.

    The online public interface of HNZ describes the purpose & function of the SOE, and there’s no reference to the provision of dividends to the state. Just a piece of pr fluff? I presume the enabling legislation would have required the organisation to return a dividend to the govt. Maybe they’re too scared to tell the truth? Maybe dishonesty is now standard practice in the way our public servants do their job.

    Anyway the purchasing of a motel for social housing by a state agent is a notable bite out of the market which could presage further nibbles leading to an entire meal of public ownership under the cover of plausible deniability so the Nats can say `nothing to do with us’ – a return to socialism via the back door.

    Comment by Dennis Frank — September 22, 2016 @ 9:19 am

  36. “The trouble though CF, is that the magical thinking of economists espousing welfare / maximal utility models doesn’t really exist outside of textbooks, lecture theatres and policy documents.”
    Really? Economists always qualify with “all other things being equal”, meaning that they isolate one of the many complex components in the economy and look at it’s interaction with other components.
    A bit like “co2 increasing will increase temperatures” give or take natural variability from known and unknown sources. So, as more scientists seem to be conceding, inspite of co2, we could still enter an ice age, in a patriarchy we still get female prime ministers, etc.

    Comment by Clunking Fist — September 27, 2016 @ 2:46 pm


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