Critics doubt Labour housing plan will solve crisis

Critics say the Labour Party's plan to build 100,000 houses for first-home buyers over 10 years won't solve the housing affordability crisis.

Labour says its flagship KiwiBuild policy will help families realise their dream of home ownership and inject $2 billion a year into the economy through jobs and construction.

The party says under the scheme, first-home buyers will be able to buy a modest house for about $300,000.

The policy involves raising $1.5 billion by issuing Housing Affordability Bonds, with two-thirds of the homes to be built in Auckland.

However Hugh Pavelitch, co-author of the annual Demographia International Housing Affordability Survey, says that is still more than five times the average New Zealand salary, so is not affordable by international measures.

Mr Pavelitch says Labour is ignoring the two main drivers of the housing affordability crisis - land supply and lack of infrastructure investment.

Some community housing providers say the biggest problem is lack of quality, affordable rental accommodation.

Planning permission changes

Labour says its plans could be fast-tracked by speeding up planning permission for such developments.

Finance spokesperson David Parker says there is a huge need for affordable housing, which the market has failed to meet, with just 5% of homes currently being built falling into this category.

Mr Parker says the KiwiBuild programme would change that by tilting the balance in favour of affordability.

The same building code would still apply, but there would be an easier planning route under the Resource Management Act for those building affordable houses, rather than mansions, he says.

Industry says it could do it

The Registered Master Builders Federation says despite losing thousands of skilled workers, it could train new staff and gear up over several years.

The federation says it is currently building about 30% to 40% fewer homes than its long-term average.

Chief executive Warwick Quinn says a programme such as the one Labour is proposing would give builders much-needed confidence in the market.

Mr Quinn says providing growth increased over several years, the industry would be able to bring through apprentices to help build significantly more homes.

Builders in higher-cost regions such as Queenstown and Tauranga say there could be problems finding land cheap enough to provide affordable homes.

Auckland Council is working on an affordable housing strategy, and says Labour's plan to provide funding for that part of the market would be helpful.

The Salvation Army has welcomed the policy, saying it has previously called for a large-scale approach to build housing.

The national director of its social policy unit, Major Campbell Roberts, says more detail is needed, especially on the ability to build that many additional homes.

"Turning out 10,000 houses in one year is a major, major project and whether you'd be able to wind up the building industry and wind up resources that quickly, I think there is a question. But overall though we would welcome a bold, brave move as far as housing's concerned and that's the only thing that's going to be able to kick housing along."

However, he says the policy is the first from a political party that sets a target for affordable house construction.

Next story in National: APN putting three regional publishers up for sale