National’s housing plan economically reckless and will increase children living in poverty
National’s plan to sell state houses and provide income-related rent subsidies to private landlords will drive up rents and house prices for everyone the Green Party said today. They termed it economically reckless, as it will allow profiteering that will increase rents and lead to more children living in poverty.
“Shifting the responsibility for housing from the Government to the private sector looks like a cynical attempt to enrich landlords while palming off responsibility for housing the vulnerable,” Housing spokesperson Kevin Hague said today.
His concern echoes those from community organisations such as the Auckland Community Housing Network that National’s plan will swap state homes for massive state subsidies to private landlords. A concern that has heightened given the government has given no guarantee that funds gained from the sales will be re-invested in the social housing sector.
Mr Hague pointed out that the Government paid out $1.2 billion via the accommodation supplement in the year to June 2014, a policy already credited with driving up rents as well as lining the pockets of private landlords.
He predicts that the government’s housing reform will see “Rents driven higher, and while families with rent subsidies may be assisted short-term, the Government will be on a treadmill to pay ever higher subsidies as house price-related rents increase.
“At that point, the Government will say the cost of providing income related subsides is too high and it will make cuts.”
When that happens, the hardship on low-income families will increase and that will lead to an increase in the number of children in poverty.
“More than half – 53 percent – of the 265,000 children in poverty live in private rental accommodation, much of it sub-standard, according to a 2012 Ministry of Social Development report.
“That position is going to get worse with National’s new policy.
“Bill English claims it is cheaper to provide subsidies than build state houses. But he ignores both the role that building state houses play in boosting the supply of affordable houses and the fact that the Government will own a valuable asset at the end.”
The role of government providing state houses is to retain a threshold supply of affordable accommodation he said. While a good supply of rentals at a reasonable rate helps contain rents for everyone, not just those in the state house.
“That function no longer applies when our stock of state houses are sold,” said Mr Hague.
“Rather than selling state houses, we should be increasing the stock of modern, affordable houses.”