NZ Election 2020: Jacinda Ardern explains why voters should trust Labour on housing despite KiwiBuild failures

Despite KiwiBuild failures, Jacinda Ardern says voters can trust Labour on housing because it was "willing to try new things" and is setting the stage for more homes to be built by removing barriers to building consents. 

Labour campaigned on KiwiBuild as the housing crisis solution, promising 100,000 houses in 10 years, but with just 258 houses built as of September 2019, the policy was 'reset' - the targets were dropped and it shifted towards progressive home ownership.

One year on, Ardern says voters can trust Labour because it has been "working incredibly hard to turn around what has been a decade of underinvestment", but she acknowledges there is much more work to do. 

"What we've continually said is that in the wake of inheriting a housing crisis we were willing to try new things, to invest in making sure that our residential housing market was building affordable homes for first-home buyers, and we are continuing that work," she said on Friday.

"We actually have a very proud record of public housing, in particular of building more houses than we've seen any Government build since the 1970s. What we need now is support to keep going. We won't turn this problem around in one term that took decades to create."

Labour's housing policy launched on Friday doesn't have any major changes. Labour will continue with its KiwiBuild programme and has committed to repealing the Resource Management Act (RMA), which all major political parties agree on. 

Ardern said Labour hasn't held back its housing ideas for a flashy announcement. 

"We haven't waited for an election policy - we've got on with it. So actually very recently some of the work we've been doing in response to COVID has been about making sure that we keep the residential housing market going and we moved on that very quickly."

KiwiBuild has gone through various changes since it was first announced. In June, Housing Minister Megan Woods unveiled the details of the progressive home ownership scheme which falls under the KiwiBuild banner. 

Introducing a progressive homeownership fund is part of Labour's confidence and supply agreement with the Green Party. 

Types of progressive home ownership deals are already available in New Zealand, but the Government has made $400 million available to those providers to make it more widely available. You can read more about that here.  

Labour's housing spokesperson Megan Woods and leader Jacinda Ardern launching the party's housing policy in Auckland.
Labour's housing spokesperson Megan Woods and leader Jacinda Ardern launching the party's housing policy in Auckland. Photo credit: Newshub

On top of progressive home ownership, the revamped KiwiBuild included changes to the requirements for a KiwiSaver HomeStart grant. The deposit requirement was reduced from 10 percent to 5 percent. 

The programme was recently tweaked to allow up to a quarter of unsold KiwiBuild homes into the open market, so now 25 percent - up from 15 percent - of KiwiBuild homes that don't sell to people who fit the criteria, can be sold to spectators. 

The Government also announced a $350 million Residential Development Response Fund to support the residential construction sector hit by COVID-19, and it was sold as a complementary programme to KiwiBuild. 

The Government shares some of the increased risk associated with COVID-19 by backing developments through underwrites - either purchasing unsold houses from developers or topping up any shortfall, depending on the contract.

Similar underwriting happens on KiwiBuild developments.

KiwiBuild has so far delivered 602 homes and there are 927 under construction. Dr Woods says the programme has helped the housing sector realise that affordable housing is possible. 

"We are prepared to stand beside our sector to ensure that we do see the continuation of those developments, particularly where they do include affordable houses so we don't see that retreat, because one of the things that KiwiBuild has really pushed the sector into is proving that there is a market for affordable first homes," she said. 

Labour's KiwiBuild programme was reset after failing to meet its initial targets.
Labour's KiwiBuild programme was reset after failing to meet its initial targets. Photo credit: Getty

But data from Real shows the national average asking price is up by 11.5 percent on last year, while Auckland's average asking house price is now more than $1 million - the highest it's ever been.

"That shows that we need to keep ensuring we have more supply. That is what one of the issues in our housing market is - we don't have enough homes," Ardern said. 

"Things like making sure we have enough apprentices coming through which we are subsidising with free training, the underwrite fund to make sure that even in a COVID recovery environment we're supporting the residential housing market, and building ourselves as Government 18,000 houses out to 2024."

The Government promised to deliver an extra 8000 new public and transitional homes through Budget 2020, in addition to the 6400 public housing homes that were currently being built. 

ACT leader David Seymour doubts Labour can deliver on housing. 

"Forget fundamental housing reform, Labour couldn't deliver a pizza to the front door," he said. "After being opposed to replacing the RMA for years and the disaster that was KiwiBuild, does anybody really believe a Labour Government can get the job done?"

The Greens have welcomed Labour's housing policy, particularly its plan to regulate property managers, but they want to be at the table when Labour repeals the RMA.

"We saw in the proposed RMA fast-rack legislation that Labour was willing to deprioritise environmental protections and public input into decisions," said Green Party environment spokesperson Eugenie Sage.

"The reforms must improve environmental outcomes, not just uphold the status quo. We need to shift to an approach where we seek to undo environmental damage, not just stop it getting worse."