This is not just about the Accommodation Supplement that 320,000 New Zealanders received last year. Alex Tarrant’s full post prompts a sharp, sometimes shonky blogging debate. It raises critical issues that dog the consultation and drafting of Dunedin’s spatial plan but which never got a look in, and never will. Read the comments.
Our ‘first’ spatial plan should not have been rushed, given the time scale it must address. For ‘rushed’ substitute ‘superheated’, where respect and consideration are much diminished for existing patterns of living (good and bad), underlying and surrounding issues, Southern practices and philosophies, utilisation of natural and people-made resources, regional and global influences, and cumulative effects – and the real economics of PLACE-SHAPING that hinge on the recent actions of a badly-managed, far-from-smart city council that has manufactured a mountain of unsustainable debt.
### interest.co.nz December 7, 2011 – 04:12pm
Accommodation Supplement: Landlord subsidy punching a big hole in govt books due to unaffordable housing, or an essential benefit?
By Alex Tarrant
The government is being urged to boost the supply of affordable housing to help wean people off a state rent subsidy which could cost NZ$2.2 billion a year – almost twice as much as official predictions – by 2016. But any fix could require a large up-front investment in state house building, and/or require action from the private and community sectors to help increase housing supply, and therefore affordability, at the lower end of the price spectrum.
The Green Party has called on the government to see whether spending on the Accommodation Supplement could be more effectively spent elsewhere, with the party touting construction of more state houses as one solution to problems of housing and rent affordability. Co-leader Meteria Turei has attacked the Accommodation Supplement in Parliament as a subsidy for landlords. Turei told interest.co.nz high house prices, with constrained supply, meant higher rents and therefore costs to the government through the rent subsidy.
Meanwhile, the government’s Productivity Commission, which is currently investigating issues of housing affordability in New Zealand, has had the issue of the Accommodation Supplement, and the possible hit to the government’s books, raised with it by the Salvation Army.
One (sample) blogger, right or wrong…
by PhilBest | 08 Dec 11, 11:08am (at Tarrant’s thread)
The fact, observable everywhere in the world where there are urban growth containment policies, is that the escalation of urban land prices under this racket, is always greater than the ability of people to “trade off” space to keep within what they can afford.
The few remaining undistorted markets in the world, have a LOWER median multiple house price AND a far larger average amount of space per person. A one-eighth of an acre section in NZ or Britain, costs literally several times as much as a 1 acre section in many US cities (regardless of pre-or-post-crash conditions. The US cities without urban land rackets had no price bubble).
The result of fringe homes being $150,000 houses on $250,000 sections instead of $150,000 houses on $50,000 sections; is that a decent apartment near the CBD is $1,000,000 (almost all of which represents gold-plated land value) instead of under $200,000 as it is in the undistorted market.
The biggest irony in all this, is that FAR LESS people have the “choice” of living near the CBD, under the “inflated land price” model. Economist Jan Brueckner says in a paper entitled “Urban Growth Boundaries: An Effective Second-Best Remedy For Unpriced Traffic Congestion?”:
“…failure of the Urban Growth Boundary to appreciably raise densities near employment centres is the main reason for its poor performance, and this failure will persist regardless of whether the city has one or many such centres…”
There are numerous other similar academic findings from economists listed HERE: http://www.performanceurbanplanning.org/academics.html
Posted by Elizabeth Kerr