The Salvation Army tells the Nats where to shove their state-houses sell-off

[Kiwithrottlejockey]

from The Dominion Post....

Salvation Army says no to state houses

By JO MOIR | 5:00AM - Monday, 23 March 2015



THE Government's plan to sell off unwanted state houses to community housing providers has been dealt a massive blow with the Salvation Army walking away from the negotiation table.

The Salvation Army announced today it lacked the expertise, infrastructure and resources to deal with the number of houses and tenants that the Government wanted to offload.

Last year, the Government announced plans to sell off thousands of houses as it encouraged private social housing providers to take on vulnerable tenants.

The policy announcement was a major priority in Prime Minister John Key's state of the nation speech earlier this year, but Labour leader Andrew Little said the Salvation Army's refusal to take part was “hugely embarrassing” for the Government.

“It's a massive blow and this was held up at the beginning of the year as one of the defining policies for this year. There was this assumption that community housing groups would have the financial means and administrative means to pick up and administer the housing stock for social housing and clearly it's not turned out to be the case.”

Little said if the Salvation Army was unable to make it work “then I can't think of a community housing group that could”.

“Salvation Army is significant in terms of size and resource and if they're saying the job is too complex, then you wonder how the Government ever came up with the idea in the first place, because they clearly haven't done their homework.”

But Finance Minister Bill English said the Salvation Army's decision would not affect the Government's plans.

“It's not a problem. They've made quite a legitimate choice not to get into buying state houses off the the Government but they are otherwise going to be fully involved in the programme.”

“There's plenty of organisations around with more financial strength and more of the relevant property expertise than the Salvation Army, but they're all going to need the help of the Salvation Army,” he said.

While English insisted there were plenty of organisations in a position to afford buying housing stock, repeated requests to name one went unanswered.



Salvation Army social housing spokesman Major Campbell Roberts said the Government had underestimated the complexity of the task.

“I don't think there has been enough thinking gone into it.”

Roberts said the current “Housing New Zealand monopoly” wasn't working, but handing social housing over to single community organisations, like the Salvation Army, would fail.

“It is possible to do but it requires consortiums of organisations. To make it work you have to take over a significant number of houses.”

While the Salvation Army was keen to pursue other models of housing partnerships with the Government and other groups, the priority was to continue to provide and expand its own social housing services, he said.

English said the Government had spent three or four years dealing with interested organisations and in a few months time, there would be more detailed conversations about how the housing transfer might work.

“We agree with the army that it's complicated, but we haven't underestimated that.”

He expected the first transactions in the next 12 months.

“If we go through these first transactions, that will affect house prices and evaluations, and who knows, a few years down the track [the Salvation Army] might have another look at it.”

Green Party MP Kevin Hague said when the Government first announced its social housing policy, the Salvation Army heavily featured in its plans.

“The Salvation Army was mentioned in every second sentence of that policy and the Sallies are the agency that was expected to be the lead on this.”

LOCAL AUTHORITIES HAVE WHAT IT TAKES

The Salvation Army's decision to not become involved in social housing is no surprise, says Wellington City Council social housing committee chairman Paul Eagle.

He believed it was time for Government to consider working more closely with local authorities, such as the council, which had 2,300 units and accounted for 49 percent of the city's social housing.

A lot of Government's social housing in the city was “crap” and administering it required a wrap around social service, which an organisation like the Salvation Army just couldn't provide, he said.

If the Government wanted to pull out of social housing in Wellington, it should look to the council, which could work with faith groups like the Salvation Army.

Eagle said the Government's plan basically excluded local government, but in Wellington, the council was the biggest player and it was in a position to help.

“It would be silly stuff for Government not to talk to us.”

He said Government could be a key partner in future social housing because many of its properties were in prime locations that could be redeveloped as affording housing, social housing or as high-end housing, that could be sold to subsidise other housing types.

‘SUMS DON'T ADD UP’]

The group representing community housing providers says many in the sector say “the only way they can make the sums work is if they are transferred at close to nil value”.

Community Housing Aotearoa director Scott Figenshow said that would provide equity to the sector which it could use to borrow to provide more houses and deliver better outcomes for tenants and families.

He said the Salvation Army's announcement it was no longer looking at purchasing state houses was no surprise.

“Our members are very concerned about the families they work with, and are only interested if they can do a better job than Housing New Zealand (HNZC). At the moment the sums simply don't stack up.”

“Last month the Government confirmed $1.2 billion of deferred maintenance on the state housing stock. Why would a provider want to purchase a liability?”

He said it was a sign of maturity for the sector that the Salvation Army had the resources to conduct a very thorough analysis.

“There is enough information now for the government to adjust its financial approach to one based on delivering good quality homes and strong, healthy communities,” he said.

“What the sector sees is it growing from roughly 5,000 homes to say 60,000 homes — and as a sector, it would be of equivalent size to Housing New Zealand. That would double the amount of social and affordable housing across New Zealand.”

He called on the Government to reinvest into the sector the $220m it was forecast to receive in tax and dividends from HNZC.

“The government says it's not about the money, so why can't that $220 million be invested into growth of the community housing sector, each year for the next 20 years?”

A cross-party agreement on housing and a 20 year strategy to back it up was needed, he said.

“We need to see a community housing sector of equal size to HNZC — not a reshuffling of the current houses.”

http://www.stuff.co.nz/dominion-post/news/politics/67473872/Salvation-Army-says-no-to-state-houses

[Kiwithrottlejockey]

While English insisted there were plenty of organisations in a position to afford buying housing stock, repeated requests to name one went unanswered.

Yep, Billy-boy English is “full of shit” alright (as usual).

[reality]

Ahhhhhahaha...Ktj has never been known to let the facts get in the way of an intellectually challenged conspiracy theory
Read the second line bozo...

"The Salvation Army announced today that it lacked the expertise......"

Think you should stick with improving your "stick control"  at which you have proved you have a lot of experience😳

[ssweetpea]

I think the Sallies made the correct decision in not buying these state houses.

Most domestic dwellings in NZ are built to building standards that require the building to last for 50 years. I have heard a whisper that state houses were built to last 60 years but many of this "surplus stock" would be near this age or over it.

Maintenance has be scrimped on. The properties look run down and that isn't all the fault of the tenants.

Family sizes have changed. Those needing social housing are either very small families (one, two or three people) or very large. Pokey three bedroom dwellings don't fit the requirements without being to large or over crowded.

Quite frankly this government is either incredibly naïve or maliciously hypocritical to expect a charity that has to beg and fund-raise to take on such poor quality housing stock. If the government isn't willing to cop the flack for or the expense of bull dozing obsolete housing and building multi-story shoe boxes or single level rabbit hutches why do they think a charity will?

[reality]

Private enterprise will be a much better bet
..... Probably not a bad investment ....with who ever gets it

[Kiwithrottlejockey]

I bet you'd be just the sort of arsehole/filth/human-trash who'd take advantage of the situation to exploit those at the bottom of the socio-economic heap.

Vermin like you deserve to be amongst the first to be lined up against a wall and shot in a revolution.

[Kiwithrottlejockey]

from The Dominion Post....

Government stumbles over its housing policy

EDITORIAL | 5:00AM - Thursday, 26 March 2015

NATIONAL's plans for social housing are in a mess.

It is having trouble finding buyers for the state houses it wants to sell. It is also having trouble deciding what “social housing” will look like, who will run it, and who will benefit.

The Salvation Army's decision not to buy state houses is a serious blow to its scheme. The army, after all, is one of the great social agencies of the country.

Finance Minister Bill English plays down the refusal, of course, and it is true that the Sallies have not ruled out joining a consortium with other groups.

Handing social housing over to a single organisation, says Salvation Army spokesman Campbell Roberts, would fail. But organising a consortium seems an extremely complex business. English suggests that the Salvation Army will be involved in the scheme even if it doesn't want to go into the property business.

But despite repeated questioning, English can't or won't identify the other groups who might stump up the vast sums needed to buy the houses.

Some iwi, flush with settlement money, might want to do this. But whether they and others could successfully blend their money with Salvation Army philanthropic experience is, to put it mildly, a vastly open question. The interests of the iwi are, quite rightly, about their own tribal members. Would this fit with the army's “open to all” approach?

Now it seems that private property developers might also have a role in social housing. Here the scope for muddle and contradiction seems even wilder. Developers want to make a profit, and fast. How would that gel with long-term provision of a service to the disadvantaged?

English is now talking vaguely about giving buyers more “flexibility” in what they do with state houses. He claims that Prime Minister John Key's promise to continue housing existing tenants was for the tenants and the subsidy, not the houses. This opens the prospect that the Government will flog off the houses to property developers and use the funds for social housing elsewhere.

The trouble has always been that the Government seems caught between its duty to help the poor and its continuing desire to economise.

Hence its refusal to promise to maintain its present level of spending on social housing. Hence its insistence on treating Housing NZ as a cash cow as well as a social agency.

This year the Government expects to get $220m in tax and dividends from the corporation. It wants profits as well as social services. And it is also in thrall to its ideology of semi-privatisation. Wellington City Council is experienced in social housing and is interested in forming a partnership with the Government. But the Government doesn't seem keen, apparently because it believes that the private sector is best. This is a statement of faith and no more.

So the Government stumbles on, trying to serve several masters at once and sowing confusion and doubt. It's not a triumph of policy-making and governance. Perhaps National's third term will be neither arrogance nor vacuity, the traditional demons of long-term governments, but just a muddle.

http://www.stuff.co.nz/dominion-post/comment/editorials/67508064/Editorial-Government-stumbles-over-its-housing-policy

[Kiwithrottlejockey]

from The New Zealand Herald....

Kiwis hoodwinked over state housing

Involving non-government organisations will not provide
the answer to need, as can be seen overseas.

By DITA DE BONI | 9:45AM - Thursday, March 26, 2015


The Salvation Army has rejected buying state homes. — Photo: NZME.

THIS WEEK, Finance Minister Bill English was dealt a blow by the Salvation Army, which rejected his suggestion it buy Housing New Zealand stock.

Like his colleagues he is adept at rolling a turd in glitter, and laughed it off like no big thing. He then said something quite flabbergasting: “We're all learning about this.” As we go, was the inference.

Is this man for real? The largest change to the provision of state housing since it was first built in the 1930s, and he's telling us the Government is feeling its way and isn't bothered by the fact the most obvious partner in this half-baked scheme has given it a giant thumbs down?

A more honest response would be the Government isn't worried yet — it needs to find a convenient non-profit cover for the inevitable transfer of public housing stock to private concerns.


Finance Minister Bill English.

If that sounds harsh, consider how Bill English and John Key have described the performance of Housing New Zealand over successive years. As far back as 2013, Mr English was describing it as performing poorly, and saying the nationalised housing industry was a “disgrace”.

Shortly thereafter, Housing New Zealand beat six Australian social housing providers to scoop a major prize for “leading innovation”. No matter. What was said could not be unsaid, and changes were afoot. John Key chimed in, saying the experience of countries like Australia and the UK is that having non-government organisations involved in social housing alongside the government is a “better way of doing things”.

I couldn't wait to read all about what amazing things had happened in the UK and Australia to justify this incredibly bold change in state housing policy. I was looking forward to seeing how, in systems where a segment of society falls further and further behind everyone else economically, more and more of them were able to access affordable housing.

Either I was reading completely different reports, or our political leaders are misrepresenting the downstream effects of selling off publicly owned housing. Because what I read from the UK, at least, suggested quite the opposite.

At one time, “council housing” was the predominant way people on low incomes were housed in the UK — much more common, but analogous to our state housing. The houses were built to last using money loaned from the government at low rates with repayment terms over several decades.

Over the years, however, less money went into public housing, and a depleted system fed into public perceptions that the system was broken and its tenants didn't “deserve” subsidised housing (the same thing happened in Australia, and it's happening here).

In 2010, the UK Government cut funding for state-funded housing by 60 percent — homes that housed one fifth of the population. But it did create enormous, contestable budgets for private and non-profit providers to come in and build and run housing, ostensibly for those in need. Many big non-profits moved into the space but have since found themselves having to become overwhelmingly commercially focused to keep their heads above water.

For example, some now refuse to rent properties to beneficiaries — the very people they were established to help.

To obtain a government subsidy, they have to charge 80 percent of market rates, which has pushed more and more people back on to the waiting list for council housing — a list that currently has almost two million people on it.

Rents for social housing have risen by almost 8 percent year on year, and fewer new houses are built because costs cannot be recouped.

In Australia, despite a more innovative mixture of subsidies, tax breaks and other incentives, there is still a shortage of new housing, with non-profit providers a very small part of a market dominated by commercial operators. A quarter of a million Australians needed help from homelessness services last year.

And Carol Croce, CEO of the Community Housing Federation of Australia, has even gone as far as to say the New Zealand model wouldn't work because financial constraints on the community housing provider would be too great — precisely what the Salvation Army has echoed this week.

The Government doesn't seem concerned that those on the front line of poverty and homelessness are telling them that their plans for state housing will not provide the answer to acute need, both here and elsewhere where it's been tried. Which begs the question: who benefits? Which generates, unfortunately, the usual, depressingly familiar answer.

• Dita De Boni is a business columnist, with a political twist, for The New Zealand Herald.

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11422949

[reality]

Yup....best left to the private sector....the sallies have their hands full trying to persuade us that there is a god..😳

[Kiwithrottlejockey]

from The New Zealand Herald....

Housing warning: If the Salvation Army can't do it, no one can

By JOHN ARMSTRONG | 5:00AM - Saturday, March 28, 2015


With upwards of 400 social housing units on their books, the Sallies are already landlords — and seemingly
successful ones to boot. — Photo: Chris Gorman.

IF the likes of the Salvation Army cannot afford to buy cut-price state houses, it seems improbable that any other social services agency is in a position to do so.

That was the logical conclusion that many observers drew from last Monday's announcement by the Salvation Army that it will not be taking up the opportunity to purchase state houses from the National minority Government at what are likely to be knockdown prices.

After initially expressing enthusiasm for the transfer of “some” state assets to community organizations like itself, the Sallies are now saying that they do not have the expertise, infrastructure or resources to cope successfully with any sudden influx of state house tenants and their abodes which would make the organisation a major social housing landlord.

That rationale is somewhat bizarre. With upwards of 400 social housing units on their books, the Sallies are already landlords — and seemingly successful ones to boot.

The Sallies can clearly cope with the trial and triblations of renting out properties at the bottom end of the market. They initially expressed interest in picking up some Housing New Zealand tenancies as part of National's carve up of social housing.

They clearly had a change of mind — one which played neatly into the hands of Opposition parties.

The Sallies are not the only dissenters. Until today, the Government had been complimenting itself that the Salvation Army was the only organisation to pull out of the scheme. But late in the afternoon the Methodist Mission Aotearoa withdrew its participation, saying it did not believe that the government's proposal to sell state housing to the social sector was in the best interest of the communities where housing was desperately needed.

Rather than focusing on a change of ownership, the collective of social services agencies proposed establishing partnerships with the Governemnt and other service providers to create new, good quality, affordable housing.

The withdrawal of the Methodist Mission Aoteroa seems to be much more ideologically-driven. The Salvation Army's decision was widely interpreted as being a rebuff to National and a vote of no confidence in Bill English's radical plan to establish a properly-functioning market for the housing of the poor and less well off.

The Army's reasons for dropping out of the bidding, however is seen by Government insiders as having a bit to do with estimates of low financial returns from wading into the uncertain waters of investing in social housing.

That did not stop the Opposition taunting English for his shake-up of social housing and his accompanying efforts to end state dominance in the sector having seemingly foundered on one of the principal players refusing to play ball.

National's attempt to “privatise” the sector was decreed to be in tatters. That is wishful thinking, however.

English has been progressively stripping Housing New Zealand of its functions to remove its monopoly over where and how those at the bottom of the economic heap are housed.

English's Utopia would see a market which would have private sector community housing providers competing with one another for tenants by offering extra services and benefits to those who signed up to their lease.

This market will progressively replace Housing New Zealand's monopoly which sees the state corporation managing 68,000 or so state houses.

In comparison, private sector providers have control of a mere 5,000 homes or units.

While nearly 40 privately-run organizations have satisfied the criteria to be registered as community housing providers, few of them have the cash resources to indulge in a mass house-building programme of the kind needed to be on more equal terms with Housing New Zealand.

That is English's fundamental dilemma. For his market-oriented model to work, the community housing providers who will be competing for tenants actually have to have the homes to house those tenants.

That sector has struggled to raise the necessary capital to build enough houses to make any real difference.

Barring financial subsidies to those providers, the Government's only option is to “transfer” state houses at what is inevitably a discount.

For “transfer” read “sell”. It is at this juncture that English is most vulnerable — and his opponents the most active.

The repeated suggestion that English's market is really backdoor means of privatizing a social asset has resulted in their being a degree of apprehension within National's ranks.

The policy has two big negatives. It is extremely complex. That increases the capacity for things to go haywire.

Moreover, the policy is not popular now and may become even less so.

You get the feeling that if English's name was not on the policy, it would have been ditched by National long before now.

The more you scrutinize the Salvation Army's carefully-worded announcement, the more it seems its leadership was similarly nervous about the “transfer” of state assets but without saying so directly.

The Salvation Army is also not convinced that taking up the Government's offer would markedly improve the lives and living conditions of those state house tenants who come with the homes as part of the package.

This directly contradicts the Government's assertion that tenants would be better off than they are now because organizations like the Salvation Army could offer services which other landlords, notably Housing New Zealand, could not.

No-one can accuse English of rushing things, however.

Work has been underway for more than five years on his market concept. It is only now that the theory is turning to implementation.

The intention is to roll out the policy in the regions first, choosing areas where supply and demand is more “stable”.

That will allow adjustments to policy setttings to be made without causing major ructions. Only then can the policy be introduced into the turbulent Auckland market.

English's difficulty is that this is a policy that could have unforeseen consequences unless all of his ducks are kept strictly in a row. But make no mistake. English is determined to make it all work no matter the potential cost to his reputation.

• John Armstrong is The New Zealand Herald's chief political commentator.

Related news stories:

 • Salvation Army rejects buying state homes: ‘Housing NZ is making a mess’

 • Editorial: Housing call a message to Government

 • Government put pressure on us — Salvation Army

 • Dita De Boni: Kiwis hoodwinked over state housing

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11424274

[reality]

....Jeeezzzzzz, why is the left always most concerned about the offenders......why don't we think more about the victims and taxpayers...the people who fund all this extravagance for criminals ......

Prison restructure sparks concerns of rise in re-offending rates
STACEY KIRK
Last updated Fri Apr 10 07:15:21
 Staff at Waikeria Prison could lose their jobs due to a proposed corrections restructure.
JOHN SELKIRK
Staff at Waikeria Prison could lose their jobs due to a proposed corrections restructure.

A move to close prison units and slash more than 200 Corrections jobs has been derided by Opposition parties, and has experts concerned reoffending rates will rise.

Up to 262 prison jobs are on the line, after Corrections revealed plans for a major restructure of prisons.

Corrections chief executive Ray Smith informed staff on Thursday of a proposal to close major units at three prisons, and consolidate programmes under a single prison director.

Units at three regional prisons – Rimutaka, Waikeria and Tongariro/Rangipo – are marked for closure, as Corrections readies to fill beds at the new privately-run South Auckland Prison in Wiri.

The Public Service Association and the Corrections Association have panned the job losses, with lawyer and Howard League for Penal Reform council member Liz Gordon saying the move appeared to be at odds with government policy.

The Government has set a target to reduce re-offending by 25 per cent 2017. Before the September election, National also announced a plan to make all eligible prisoners in public jails work, and undergo addiction rehabilitation on release.

That would see inmates in 16 "working prisons" participate in 40-hour weeks structured with employment, training, education and rehab.

"I suspect this makes the goal of getting a 25 per cent reduction in reoffending even more difficult," Gordon said.

"This is about meeting the more modern demands of the prisons, which is being able to eventually send prisoners out to work and sometimes serve in the community, instead of rotting inside for years and plotting to kill or sharpening their shanks."

That was something to be supported, Gordon said. But by making all prisoners work full days, Corrections would have to relax the number of "lock-up" hours some prisons used.


'If you start extending the hours of prisons, then you need more staff, not less staff."

She said every time Corrections "seems to make a gain on offender rehabilitation and reducing reoffender rates, the Government whittles away money from their budgets".

READ MORE:
* Up to 262 prison jobs may be cut in major Corrections restructure
* Corrections reshuffle hits Waikeria Prison

Green Party corrections spokesman David Clendon said closing provincial prisons would see more prisoners be sent further away from their families.

"Research shows that inmates who maintain families and other relationships while in prison are more likely to be successfully rehabilitated, so moving inmates to Auckland away from their support networks is counterproductive."

Labour MP Kelvin Davis said the restructure would only line the pockets of Wiri Prison operator Serco. "Serco. . . will now be laughing all the way to the bank. They will now be able to hire the officers that will be laid off."

NZ First's Mahesh Bindra described the restructure as "pure folly".

"Corrections Minister Peseta Sam Lotu-Iiga has already said that Serco doesn't follow the same staff to prisoner ratios used by the Department of Corrections, which are a proven tool in staff and prisoner safety.

"It is nonsense for the minister to suggest the proposal reflects a commitment to providing safe and secure working conditions for staff and a safe and productive environment for prisoners, when evidence suggests otherwise."

But Lotu-Iiga has already rejected the claims, saying the review was necessary to achieving the Government's targets.

"I understand that this proposal may be unsettling for affected staff but Corrections will have extensive support and assistance in place should the proposal go ahead. I also believe that the proposal reflects our commitment to providing safe and secure working conditions for staff and a safe and productive environment for prisoners.

"Prisoners have a much better chance of successful rehabilitation in modern facilities where they have access to education, training and employment opportunities."

 - Stuff

[Kiwithrottlejockey]

[Kiwithrottlejockey]

....Jeeezzzzzz, why is the left always most concerned about the offenders......why don't we think more about the victims and taxpayers...the people who fund all this extravagance for criminals ......

Intelligent people are concerned about the Nats throwing provincial towns such as Te Awamutu and Turangi to the dogs.

Nats supporters who agree with throwing the people from those towns to the dogs by axing hundreds of grounds are just SELFISH WANKERS who are lacking in intelligence as well as being the sort of people who STEAL oxygen which could be breathed by intelligent people.

[reality]

Well ...lets just hope that those towns don't end up having a crime wave as bad as South Auckland or even Marsterton where it sounds  very bad...can only imagine what it must be like to live in a town with crime being that bad...they need more police😳...perhaps a jail would help so that your relatives can visit you in jail😀

[Kiwithrottlejockey]

[reality]

Regulators eye curbs for residential property investors

5:00 AM Thursday Apr 16, 2015

Tighter rules on lending to speculators could moderate overheated market, says Reserve Bank deputy.
Grant Spencer says it's time to take a fresh look at tax options. Photo /
Mark Mitchell
Grant Spencer says it's time to take a fresh look at tax options. Photo / Mark Mitchell
Regulatory moves to curb bank lending to residential property investors are a live possibility, says Reserve Bank deputy governor Grant Spencer.

It would not solve the underlying problem of excess demand especially in the Auckland market, he said. "But it would potentially moderate it."

The Reserve Bank is consulting with the banks about how to best define lending to property investors. The immediate intention is to increase the amount of capital banks need to hold against that portion of their loan book.

But it would also identify that group more clearly as a basis for potential further, macroprudential policies, Spencer told the Herald.

The only macroprudential policy the bank has undertaken so far - loan-to-value ratio restrictions introduced in late 2013 - took some pressure off the market for a while, the bank believes, but its effect has been waning.


Meanwhile, investor activity has been increasing as a share of the Auckland market, Spencer said.

And while aggregate growth in mortgage lending has been moderate, that masks rapid growth in new lending, offset by faster-than-normal repayments of existing loans as borrowers take advantage of low mortgage rates to reduce the outstanding principal.

In a speech to the Chamber of Commerce in Rotorua yesterday Spencer said the Auckland market was particularly stretched, with house price inflation now at 17 per cent per annum and median price-to-income multiples over seven.

"The increasing degree of stretch in prices means that an eventual market correction is increasingly likely to be disruptive to financial stability and the economy."

Read more:
• Property: Reserve Bank aims to cool overheated market
• Reserve Bank trying to 'stem the housing flow' - Little
• Auckland house prices surge 13 per cent

The Reserve Bank is keen to see other policymakers do all they can to boost housing supply.

But Resource Management Act reforms could take years to be felt in new supply. "The Government and the Auckland Council might therefore consider focusing their efforts on streamlining the approvals process and increasing the designated areas for high-density residential development," he said.

On the demand side Spencer renewed the bank's longstanding plea for tax policy changes to reduce the advantages property investors enjoy, particularly highly leveraged ones. "Given the extent of the issue and what is happening in Auckland it is probably time to have a fresh look at some of the tax options."

Investors are often the marginal buyers setting prices in significant parts of the housing market.

"Indicators point to an increasing presence of investors in the Auckland market and this trend is no doubt being reinforced by the expectation of high rates of return based on untaxed capital gains," Spencer said.

"While there are difficult issues and trade-offs to consider in this area, the Reserve Bank would like to see fresh consideration of possible policy measures to address the tax-preferred status of housing, especially investor related housing."

As for what the Reserve Bank can do to curb demand, raising interest rates is not an option when inflation is as low and the exchange rate as high as they are. "There is no case at present to be increasing rates on the basis of the CPI outlook," Spencer said.

"In terms of the tools we have, [macroprudential policy] is really the only area we have where we can potentially do something."

But such tools were no panacea, he said. "Their impact is inevitably smaller than the main drivers of the current housing market imbalance."

New Zealand is one of the few advanced economies not to have experienced a major house price correction in the past 45 years of the kind that threatened financial and economic stability.

"That's the worry, that people get carried away and think it is a one-way bet. It [a crash] never happens - until the first time it happens.

"The corrections we have had in the past have been relatively moderate like in 2009 when there was a 10 per cent pullback [in house prices]." But as global interest rates return to more normal levels, many mortgage borrowers could come under pressure as they are required to refinance at higher rates, Spencer warned.

"Alternatively, a downturn in the global economy and financial markets could lead to a drop in national income and rising unemployment, at the same time as foreign creditors are requiring an increase in the interest rate premium charged to New Zealand borrowers. In such circumstances, we could see the cost of credit rising at the same time that incomes and employment were under pressure."

If a drop in demand for housing came as new supply was multiplying, prices would begin to fall. "With 60 per cent of its lending in residential mortgages, the New Zealand banking system could be put under severe pressure in such scenarios."

Concerns keep rates low
Interest rates will remain low for the foreseeable future as central banks focus on financial stability rather than inflation control, says a fund manager.

Nikko Asset Management NZ's head of bonds and currency, Fergus McDonald, said rates were being kept at record lows in many parts of the world to provide support to banking systems.

"Inflation isn't driving interest rates but financial stability concerns are," he said, following Nikko's Investment Summit in Auckland this week. "While we are part way there we're not fully there and that's one of the major reasons why we think interest rates in New Zealand and globally are going to stay low for quite some time."

A local manifestation of the concerns was the Reserve Bank's loan-to-value ratios on mortgages, introduced in 2013 with the aim of cooling a hot property market, particularly in Auckland.

With inflation weak, the Reserve Bank is widely expected to keep the official cash rate on hold at the historically low level of 3.5 per cent well into next year.

While that's good news for borrowers, it is forcing deposit holders who rely on interest income to seek out other investments.

"Low interest rates have seen a flood of money into the property asset classes ... and into high dividend shares," McDonald said.

That market dynamic has been driving the values of NZX-listed stocks including Meridian Energy, Mighty River Power and Auckland Airport.

Meanwhile, economist Andrew Hunt, who also spoke at the Nikko summit, said central banks in countries whose currencies received large foreign capital in-flows, including Australia and New Zealand, were facing a conundrum around exchange rates.

"You might want to protect your real economy by talking your currency down ... but if you do it would be quite easy to lose control. "If your currency collapses ... you've just impoverished households."

- NZ Herald

[Kiwithrottlejockey]

from The Dominion Post....

Editorial: Government's state housing sell-off gets stranger

EDITORIAL | 5:00AM - Tuesday, 30 June 2015


Australian non-profit company Horizons Housing is considering buying up to 400 state houses from
the Government. — Photo: John Hawkins.

THE GREAT HUNT for a buyer for the Government's state housing sale continues.

First the Salvation Army turned down the prospect, saying it could not handle the numbers involved. (The Government wants 1,000-2,000 houses sold initially.) This was a harsh blow, as the group had been frequently cited as the sort expected to fill the gap.

Then came iwi interest — but leaders suggested they should get the houses for free, which is not what Finance Minister Bill English has in mind.

Now an Australian not-for-profit outfit, Horizons Housing, is getting a tour of the stock — it is looking at buying as many as 400 houses.

English says that's a possibility, and houses may be sold to Australian or British community housing providers, as long as they can do the job required.

The vendor is eager to sell, in other words, and the net is being cast wide. Forget Social Development Minister Paula Bennett's incantations that selling state houses will mean that “services are delivered by local people for local people”. Now it is about those agencies with the skills for the task, wherever they may come from.

The overseas interest raises many questions, chief among them: why does an Australian non-profit company want to buy houses here? It's a trans-Tasman takeover bid, but without the profit motive — so what's in it for the charity?



Horizons boss Jason Cubit says he wants to expand the company, make surpluses and reinvest them into the community. He certainly speaks the language of the market, then, but it also reveals the confusion in the policy. How, exactly, will they make surpluses? By cutting back on costs like maintenance, by charging more, by getting stricter on the vulnerable?

Efficiencies, the retort will be. The company would have 400 houses and the forces of innovation behind it. But is it so plausible to believe that an Australian company can transform these ageing and bleak houses on the sort of budget that has seen Housing NZ fail? Why? What's the magic sauce?

The Government is trying, all at once, to get a good deal for itself, for the agencies who take over the houses, and for the tenants who need them.

It takes immense optimism to believe this can be done. Governments are never any good at selling their assets — the whole process of announcing sales distorts their execution, because it's politically worse for the sale to fall apart than for the government to be shortchanged. Buyers know this well.

With state houses, in any case, only a bargain price will do, because the “business model” is so weak. It doesn't matter how you cut it: accommodating vulnerable, high-needs tenants just isn't a lucrative game.

This isn't to say there shouldn't be any reforms. The Government rightly says that many state houses are the wrong size and in the wrong place. It should simply sell those and buy new ones that do meet the need.

But that's different to bringing in private agencies to run social housing — a model that rang hollow from the first mention. It has been one muddle after another so far. The Australian flirtation looks like one more.

Related stories:

 • Bill English confirms State houses could be sold to overseas buyers

 • No rules against Australian charities buying state homes — Key

 • State house sales ‘asset sale by stealth’ — Labour

http://www.stuff.co.nz/dominion-post/comment/editorials/69809849/editorial-governments-state-housing-selloff-gets-stranger

[Kiwithrottlejockey]

from The New Zealand Herald....

English bets the house on ideology

Refusal to back down on social housing policy provides
ammunition for Opposition to harass Finance Minister.

By JOHN ARMSTRONG | 9:32AM - Tuesday, June 30, 2015


Finance Minister Bill English's reluctance to quit the whole idea is also driven by strong ideological
motives on his part. — Photo: Mark Mitchell.

BILL ENGLISH's willingness to allow an Australian housing provider to buy up to 500 New Zealand state houses veers perilously close to allowing blind ideology to get the better of political common sense.

It is irrefutable evidence that the Finance Minister's radical experiment in creating a market in the provision of “social” housing to the poor and less well-off is simply not working, despite he and his advisers from the Treasury punting it would — at least in theory.

Their model — designed with the specific purpose of ending the monopoly on the provision of state housing enjoyed by state-owned Housing New Zealand — has relied on a high take-up by not-for-profit social agencies acting as community housing providers in place of that government corporation.

However, organisations like the Salvation Army have been cool on expanding their role in providing such accommodation.

That has left English with two choices. He could accept that the policy is seemingly unworkable and drop it. That would be embarrassing for someone who has been trying to get the new model up and running for the best part of four years.

He has, instead, decided to press on regardless and allow foreign interests to buy houses to help create a “market”. That he is refusing to give up suggests that he believes he has too much political capital invested in the project to allow it to fail.

English's reluctance to quit the whole idea is also driven by strong ideological motives on his part. The reform of state housing is part of what he last week acknowledged was “incremental radicalism” as against another approach to centre-right reform which he called “crash or crash through” and which involved initiating rapid change.

So far, the incremental approach has partly blunted Opposition charges that state housing reform is all about privatising social assistance.

Allowing a foreign element to buy part of the taxpayer-funded state housing stock on the cheap, however, not only permits opponents to milk the privatisation argument to far more effect. It also enables them to push political buttons on an equally emotive issue — foreign ownership.

Combine the two and the Opposition has a lethal combination with which to ping National big-time.

• John Armstrong is The New Zealand Herald's chief political commentator.

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11473058

[Kiwithrottlejockey]

from The New Zealand Herald....

Govt deliberately works blind in state house plan

By BRIAN RUDMAN | 9:45AM - Wednesday, July 01, 2015


Minister of Finance Bill English. — Photo: Mark Mitchell.

BACK in October last year, an irascible Bill English, while briefing reporters of the “property-developing Herald” on his plans to sell off an unspecified number of state houses, predicted “you guys” would be spending the next six months “kicking our arse over how many houses we own”, and “what greedy developers are going to get hold of them”.

Little did any of us guys suspect that the Minister of Finance was open to bids, not just from within New Zealand, but from Queensland and “possibly even the United Kingdom” where, he told The Nation last weekend, “there's lots more experience in social housing”.

What remains unclear in this long, drawn-out “make-an-offer” phase is what the Government considers is the going price for a state house. Indeed, Mr English now says “we'd probably prefer sales, but if there's an opportunity that involves leasing, we wouldn't want to rule that out”.

Is it any wonder critics are arguing that ideology, not price, is driving the process.

In January, Prime Minister John Key did flesh out the proposal, suggesting 1,000 to 2,000 state houses would be sold to iwi and other community housing providers over the next year, and they would have to be sold below book value.

In March, the proposed sell-off suffered a major setback when the Government's “preferred” purchaser, the Salvation Army, refused to participate, arguing it did not have the “expertise, infrastructure and resources to successfully manage any social housing transfer of size”. The Sallies were not convinced they could offer a service “that would markedly improve the lives and living conditions of state tenants”.

Scott Figenshow, director of Community Housing Aotearoa, was more to the point, saying that many in the sector believed “the only way they can make the sums work is if they are transferred at close to nil value”.

In announcing its plans to reduce its role as a provider of social housing, the Government was vague about the details. It was as though they were social pioneers, with no world models to follow.

Across the Tasman, the same ideological shift was under way, adopted by governments of the left and the right. One thing they all accepted was the only way such public housing transfers to non-profit providers would occur was if transfers were on a no-cost basis.

An October 2013 report from the Australian Housing and Urban Research Institute analysed such transfers in Queensland, Victoria, New South Wales, Tasmania and South Australia, following the upsurge of public housing transfers that began in 2007.

In 2009, the federal and state governments agreed to a target of 35 percent of social housing being in the hands of community providers by 2014. It was inspired by European and North American examples. Between 1995 and 2012, 21,278 dwellings were transferred, with another 10,000 expected by last year. Until 2010, 72 percent of transfers had been management transfers, the state retaining the title. The other 28 percent were title transfers. Since then, as a result of a federal government building stimulus package, 50 percent of transfers had included house titles.

The report notes that “to date the transfer pricing applying to those public housing transfers to community housing providers … has been nil, in consideration of current maintenance liabilities and government requirements both for the continuing use of the dwellings as subsidised social housing and to leverage additional investment in the sector.”

In other words, it was accepted that the non-profit provider would obtain an asset against which it can borrow to maintain the existing stock, and to build new houses. The 2012 balance sheet of the NSW Land and Housing Corporation, for example, treated the transfer of $945 million of housing stock as a grant to community organisations.

The report concluded the political drive for transfers had, by 2013, dried up, and noted there had been little or no research into the success or failure of the transfer process. Until there was, “the policy case still has to be made”.

Instead of blindly stumbling on with Mr English's experiment into ridding himself of state houses, perhaps we should spend some time surveying the guinea pigs across the Tasman first.

• Brian Rudman is a New Zealand Herald feature writer and columnist.

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11473604

[reality]

....good to see the Sallies reconsider and get on board with the govt....it makes sense for them to take it on ..hope they do a good job:P



Government announces over 500 new social housing properties for Auckland
 
Social Housing Minister Paula Bennett said the Government had changed its contracts for social housing to give providers more income certainty.

Over 500 new social housing properties will be created in Auckland over the next three years, after the Government announced $10 million of funding for community housing providers.

The Salvation Army is among the five providers who have signed or are expected to sign deals to boost the city's social housing supply.

The Salvation Army will provide 87 of the 508 properties and the Chinese New Settler Trust will provide 36 properties, with Accessible Properties taking on the biggest load with 358 properties.

Another two providers are expected to sign contracts to cover the remaining properties in the coming weeks.

Just over 140 of the properties will be new builds, with the remainder made up of existing stock turned into social housing.

The $10 million of upfront funding will be tied to development goals such as new properties built and new leases signed.


Social Housing Minister Paula Bennett said the deal was a sign of "real progress", exceeding the initial request for 300 properties from the Ministry of Social Development.

"The response is beyond our expectations and signals an innovative sector that is ready to work with the Government to play a bigger role in social housing."

Bennett said changes introduced in May meant MSD could offer contracts with up to 25 years of income-related rent subsidies included, giving community housing providers a guaranteed income stream backed by the Government.

"Community providers consistently told us they needed longer term, more flexible contracting to fund new social housing developments, and we have responded to them."

The deals were "fundamentally" about ensuring vulnerable New Zealanders could access housing when they needed it.

Labour housing spokesman Phil Twyford said the announcement was "woefully inadequate" compared to the high levels of homelessness and overcrowding.

"This is the politics of small gestures from a government that has done nothing to tackle the causes of the housing crisis and little to ease the hardship of its victims."

Salvation Army territorial commander Robert Donaldson said the organisation's 50 new builds would be in Royal Oak for those aged over 55 on low incomes.

Donaldson said the changes to rent subsidies made the contracts a "financially viable project" for the Salvation Army.

A request for another 1000 social housing properties was open for providers, with applications expected to close at the end of November next year.

 - Stuff