The Housing Crisis

People often say to me “you like politics.” By this they are referring to the fact that I have been politically active one way or another since I was 14, have run for public office, headed many campaigns and generally have opinions that I vocalise. For me politics is essential. Democracy is a fragile thing, and something we should defend. The political decisions made by our elected leaders determine the laws we live under, and decide the what infrastructure and services will be available to us as citizens. Basically democracy holds to account those who decide why people should be sent to prison or whether your local hospital should remain open. In short, politics matters and all citizens should pay attention.

But I don’t like politics. The more I have worked in political campaigns and been involved in politics the more I have grown to dislike the way politics works, or doesn’t. I dislike the elitism the exists in most nations capitals. But most of all, I dislike that short term election cycle focus limits the ability for long term decision making. Democracy is great. It forces decision makers to be accountable to the public every few years, and gives people a chance to throw out governments that aren’t performing. But election cycles encourage perverse behaviour. Specifically politicians are always thinking about the following election, and wish to take positions or pursue policies that aid them get re-elected. Often this can be a good thing, but sometimes is can be disastrous.

For the last few years in New Zealand there has been a housing crisis. The issue in a nut shell is that 30 years of deregulated free market policies have failed to deliver affordable housing to the majority of the population. Most young people are now unable to afford houses in NZ’s major cities as the value of housing sky rockets. The cost of renting has also ballooned, with a lack of controls and pure supply and demand determining the rental prices. The result, people paying an enormous percentage of their income on rents, with no chance of saving to buy their own home. Add to the problem, the government running down and selling off state housing. This crisis has caused increased homelessness, poverty and depravation.

In September I move to London. I switch on the news and what are they talking about, the UK’s housing crisis. Change the place names, different politicians but fundamentally the same problem. Fewer people able to own property, and social housing in short supply.

This crisis didn’t occur in the last term or two of government. The housing crisis in both countries (and in much of North America) comes from a lack of long term planning by successive governments and parliaments. Unregulated markets primary focus is profit. The most profitable thing for property developers to do is build high end housing, and sell it for as much as possible. Fewer people now own property, and increased numbers pay very high rents. The role of government is to step in and ensure a) there are rent controls, b) there is adequate supply of affordable housing and support for first home buyer and c) that there is adequate supply of social housing for those in need. If you don’t do this, you have homelessness, poverty and an increasingly unstable and unsafe society.

The problem is the housing crisis was created over a generation. No party can fix the housing crisis in one budget or even within one electoral cycle. There is no one simple fix to the problem. Related to increased housing costs is stagnant wages and a generally sluggish economy globally for the last 30 years. Fixing this problem requires some fundamental shifts in social and economic policy, that will take 15 to 20 years to fully implement. Further it will require decisions that will annoy vocal developers, property owners and the like. Electorally, it requires government implementing policies influential businesses and developers oppose, with benefits taking years to recognise.

I don’t claim to have all the solutions to this issue. But its clear that waiting for the political system that caused, or at least failed to prevent this crisis, to turn around and fix it is naive. Trying to find a political consensus across the main party’s in parliament would be ideal, but ideology and ambition makes this very challenging.

A radical, and by no means flawless possibility is greater direct democracy. The housing crisis reflects a fundamental breakdown of the social contract. A new contract is needed whereby everyone is guaranteed affordable housing. Everyone deserves somewhere to live. People should not pay more than 1/4 to 1/3 of their income in rent. Putting a deposit on a first home should not be totally out of reach for most low to middle income earners. One solution could be to hold a referendum where people vote for a new social contract? One that is then binding on all party’s to implement. Yes I can see issues with holding a referendum on social policy. There would need to be serious public debate and education regarding the issues. Reliable and credible information should not then be drowned out by fake news or scaremongering by those with a particular ideological bent. If later the social contract voted on doesn’t work, does another referendum need to be held to change it?

The above is not the perfect solution to a complex problem. But it is a possible alternative to the present situation where people are increasingly failed by politics. Whatever the solution to the housing crisis, the fix won’t be more of the same. Whatever the change thats needed is, something needs to change.

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