KiwiBuild will take more than 400 years to reach original target

Wednesday, 27 May 2020

KiwiBuild is hundreds of years away from meeting its original target.

The Government's former flagship housing policy is so far behind schedule it will take more than 400 years to reach its initial target of 100,000 homes. It had hoped to reach the target in 10 years.

Initially, the Government had been hoping the rate of building would increase over time as KiwiBuild ramped up, with 1,000 homes built in the first year, 5,000 in the second, and 10,000 in the third, but the rate of building is slowing.

Each month in 2020 seeing tiny increases in the number of KiwiBuild homes built.

The number of KiwiBuild homes built to date stood at 393 at the end of March, equating to roughly 19 homes built each month since the scheme began in June 2018.

At that rate it would take 436 years to complete the remaining 99,607 houses that remain from the 100,000 target.

* KiwiBuild reset: 100,000 home target scrapped, $400m progressive ownership introduced

* Jacinda Ardern continues to support Phil Twyford; admits KiwiBuild didn't meet expectations

Last year, the Government admitted the project had failed to deliver. Phil Twyford was sacked as housing Minister and replaced with Megan Woods.

She 'reset' the policy. The 100,000 home target, which Labour had stuck to until then was ditched. Instead, Woods said a 'significant' number of KiwiBuild homes would be built.

The Government also pivoted towards social housing, where it has had considerably more success. It had built 2,726 state houses and 470 community houses between June 2018 and March 2020.

Woods also doubled the Government's house-building efforts in the 2020 budget, pledging to build 8000 new state homes.

National's incoming housing spokesperson Nicola Willis said KiwiBuild was 'a broken promise on a colossal scale — it's the biggest public policy failure in a generation'.

'KiwiBuild has become a byword for incompetence. It's emblematic of a failure to deliver,' she said.

Willis said Labour raised voters' hopes with an undeliverable policy.

“Labour knowingly raised people’s hopes, those hopes are now dashed. The question is did they ever have a plan to deliver?

Woods said the housing target no longer stood.

'When I reset KiwiBuild I made clear that we would not chase targets that provided perverse incentives such as purchasing housing in a location and/or configuration not suited to KiwiBuild buyers,' Woods said.

'Building houses in places and of the type that KiwiBuild buyers want is my priority.

'KiwiBuild facilitates the progression of large and small scale developments through underwrites to increase opportunities to bring more affordable homes to market.

'They are popular options for buyers, with property company Colliers International recently calling Kiwibuild apartments the ‘success story’ of Auckland’s apartment market,' she said.

Woods said the Government remained committed to KiwiBuild

'This Government is committed to doing what it can to ensure New Zealanders have warm, dry affordable housing. KiwiBuild is an important lever for providing opportunities to first home buyers and ‘second chance’ home buyers,' she said.

'It is also an important lever to invigorate the construction sector in a post Covid-19 environment; we have seen that a lack of action following the Global Financial Crisis resulted in a shortfall in lower quartile housing being built'

'This has led to some of the problems we now face with a lack of affordable housing being available to lower and middle income buyers,' she said.

The timeframe for completion is so long that it's fair to say the property market will be in a very different shape by the time the programme is finished. By way of comparison, 436 years ago, Queen Elizabeth I sat on the throne of England. William Shakespeare, though alive, had yet to have his first play performed.

In terms of the property market, England had not yet begun its colonisation of the Americas, where vast tracts of land were taken through bloody colonisation, depressing the price of land.

There's no telling what similar changes are in store for land prices in the next 436 years.

It's conceivable that humans may have begun terraforming the surfaces of the Moon or Mars, freeing up land and depressing property prices. In that situation, it is unlikely to see governments of future centuries continuing with the KiwiBuild scheme.