Making KiwiBuild Work

Dr Eric Crampton
Insights newsletter
8 February, 2019

Anybody even remotely connected with housing, housing research, the building industry – or with the ability to fog a mirror by breathing on it – had to know it was near-impossible for the government to meet its KiwiBuild promises on its 10-year schedule.

Our current planning rules, infrastructure financing mechanisms, building materials supply regulations, council incentives, zoning, training of construction workers, rules around letting more construction workers into the country, rules around foreign builders being able to build here, rules around foreign financing of building projects, Resource Management Act processes – all of it made any non-trivial KiwiBuild impossible. The government always could decide to put a KiwiBuild label on houses that were to be built anyway, but that would hardly solve the housing crisis.

More fundamental reform is needed if KiwiBuild is to work.

Think of it as a bike path through the woods with a hundred large tree branches spanning the path at chest-level. Trimming the first couple of branches out of the way – the ones that everyone can easily see – will not be enough. The riders will just hit the next branches instead.

Any serious attempt to clear the path would have to address the blockages that led to the housing shortage in the first place – requiring a fair bit of policy work before any government building programme could even get going.

And any non-serious attempt focused on the short-term targets would displace private construction while diverting the attention of the competent officials who really need to be putting their time to clearing the rest of the path.

Last February, I argued for forgiving the government for missing KiwiBuild deadlines if it were focusing its attention on the barriers preventing either state or private housing from being built.

The past couple of weeks suggest folks are not in a forgiving mood. And that can encourage government to grasp at policies that might make it easier to hit short-term targets rather than meet the longer-term goal of a housing market consistently able to deliver new housing to meet demand.

Prioritising compulsory acquisition powers for KiwiBuild over the rest of the Urban Growth Agenda is not encouraging. At least if we think voters wanted to make housing affordable again rather than hit targets for houses with a KiwiBuild label on them.

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