In an interview on The Nation, Nick Smith said he wants to make houses more affordable without actually making them cheaper. Hayden Donnell weighs in, with the help of Ben Thomas, on the two contradictory versions of the Housing Minister.
Here’s a list of things worth $1 million:
It’s a bad time to be an Aucklander who doesn’t already own a home. For first home buyers, opening the Property Press has roughly the same emotional effect as repeatedly watching the scene in Old Yeller where Old Yeller dies.
For others the situation is more dire, with constantly rising rents forcing families to live in uninsulated garages, cars, and other exceptionally shitty places.
Housing Minister Nick Smith understands. He wants to appease younger and poorer voters by making housing more affordable.
But he wants to do it without actually lowering house prices, which would upset a horde of elderly homeowners, who are swaying their way through the longest, most debaucherous property boom in New Zealand history, drunk on the nectar of billion-dollar-a-year price rises.
It’s an impossible task.
On Saturday, Smith came up with an innovative solution: becoming two Nick Smiths.
In an interview with Patrick Gower on The Nation, Bad Smith appeared first, comforting homeowners fearful their endless property bacchanal may be winding down.
“I want house-price inflation in single digits,” he said, in response to a question about whether he wants house prices to fall.
“If you ask me what the objective of my policy, both in Auckland and throughout New Zealand, it’s for house-price inflation to be in single digits.”
Almost immediately afterward, the Housing Minister’s brain slithered out of his body to be replaced by a better version of itself.
“In 2014, just before the election, you said – and this is when the housing multiple was seven – you said your goal was to get it down to four,” Gower said, searching for assurance that was still the Housing Minister’s position.
Good Smith leaned in to reply, gleaming under the coat of his new skin.
“Yeah, I think, long-term.”
It’s literally impossible for one man to hold both those views at the same time. The housing multiple in Auckland is nearly 10. Even if house prices don’t rise at all, household incomes would need to go up more than 200% – from $76,000 to $250,000 – to bring a million-dollar home down to a housing multiple of four. If wages and salaries keep going up at their current rate, that could take roughly 50 years. But single-digit house price inflation could mean 9%, in which case it would never happen at all.
It’s now been a month since Green leader Metiria Turei was flayed alive for committing the cardinal political sins of making sense and telling the truth about house prices. But her wild claim that homes need to cost less than King Tutankhamun’s tomb to be affordable was at least a viable position for a human mind.
Smith is at war with himself.
He wants to figure out how to appeal to the huge block of homeowners, many of whom are natural National voters, and would weep bitter tears if the housing bubble were ever to burst.
But he has to keep up the appearance of dealing to the housing challenge (read: Earth-rending, Four Horsemen of the Apocalypse-summoning cataclysm) he’s conceded could be happening.
And so he has to split himself in half; one Nick telling those locked out of the housing market the Government is looking out for them; the other reassuring his most reliable voters he’s on their side. One Nick saying he’s doing his best to fix a crisis; the other whispering he’s not actually going to do that much at all.
– additional reporting Ben Thomas