The average house can’t be both affordable and unaffordable

We have a housing crisis, it's more problematic than you might think, and unless we have the maturity to make some sacrifices today we are sacrificing our future generations.

A Housing Crisis

The average house price in Aotearoa is more than $1,000,000, we have a shortfall of more than 100,000 dwellings, all urban housing markets are considered severely unaffordable by international standards, 500,000 Kiwis are in overcrowded housing situations, 350,000 households are on accommodation supplements, Māori home ownership sits at just over 30%, less than 50% of people in our largest city (Auckland) own their own homes, and 1 in 100 people — that’s 50,000 people — are living in ‘severe housing deprivation’ (sleeping on the streets or in cars, in emergency housing, temporarily staying at a relatives or friends, etc).

Our housing situation is driving inequality and it’s dangerous. The Fall of Rome, the French Revolution, the Arab Spring and Brexit, were all driven in part by inequality. Inequality is a key contributor to crime, violence, abuse in its many forms, and mental illness. It destroys social cohesion by eroding the bonds that make us feel like we’re all in the same boat. 

As it stands, the current housing system is growing the divide, creating conditions where those who own homes are witnessing their wealth grow — without having to exert any effort, and in many cases faster than their incomes ever will — while those who do not, watch the prospect of obtaining one become more and more prohibitive. Some people will choose to take on large and unprecedented sums of debt; many more will acknowledge that homeownership is out of their reach. At the same time, a growing number of hard-working people in this country are in unsuitable living situations, staying in cars, sheds, garages and overcrowded houses.

Every week an article is written examining the various drivers of expensive housing in New Zealand: lack of supply, easy access to finance, low interest rates, investors, speculators, red tape, restrictive building codes and council rules, material costs and so on. And every other week an article is written with solutions to these issues: a tax, a change in regulation or policy, a homeownership scheme or a building programme. 

Why is it that despite our best efforts — that is, knowing the problems, having the technical expertise needed to address them, and making efforts to do so — the trajectory for quality affordable housing is only getting worse? Could it be that we are not addressing the heart of the problem? 

I believe it is timely to reexamine and update our values and beliefs that lie at the heart of both the issues and the solutions to our housing crisis. 

We are all in the same boat

We do not get to choose the circumstances into which we are born. We don't choose our race, our gender or our economic position, and yet these circumstances have far reaching implications on our lives. We need to design our housing system so that every member of society, no matter who they are or where they are born, has equitable access to good quality affordable housing, along with fundamentals such as quality education, healthcare, and food, in order to lay the foundations for a strong future society. Our current system perpetuates unaffordable housing as the status quo, and isn’t good for the millions of individuals who are not in homes which they own or have unprecedented amounts of debt in their names.

We have to be fair

An expensive house or no house isn't much of a choice. Why should future homebuyers, who are entitled to the basic human right of adequate shelter, be forced to pay ever higher prices for property that hasn’t necessarily had any real value (such as habitable space) added to it? Is it fair that those who have been on the receiving end of property sales have accumulated large sums of money at the expense of buyers? If large sums of money have found their way into the hands of current and previous property owners without any real value being added, wouldn’t it be only fair to look at how that money could be redirected and redistributed towards things that add real value to our society? Given our current state of crisis, we could begin by looking at how such money could be directed towards solutions to the housing crisis.

No pain, no gain

It is not possible for the average house to be both unaffordable and affordable at the same time. In order to move towards affordability, we're going to have to give up our expensive housing. This will mean a sacrifice for some individuals who, relatively speaking, have more than others. 

It is not easy to give up something that we enjoy, even when we know the outcome of giving it up is better for us. Whether it's giving up or reducing smoking, alcohol, or sugary drinks for a healthier lifestyle, or forgoing a social outing or sports activity to spend more time with the kids, all of these require some sort of sacrifice on one level in order to achieve a greater objective. The same is true when it comes to expensive housing. We will need to find and develop the strength within ourselves to overcome our self-interest for the benefit of all. 

The media

The tone of the conversation about housing and especially housing as ‘an investment’ needs to change, and our media industry needs to lead this charge. We need to critically examine whether it’s appropriate to talk about rising house prices as if it’s a good thing, when in reality, rising house prices also plays out as rising inequality, crime, mental illness and violence. Newspaper stories with headlines “Major urban centres continue to show strong gains” and “Cheaper suburbs leap ahead” could accurately be rewritten to headline “Major urban centres witness inequality and child poverty grow” and “Rents increase for already struggling families in cheaper suburbs”. Just substitute any reference to ‘rising house prices’ with ‘rising inequality’ and you have a fuller picture of what is going on.

Some hard choices 

We have some choices to make. We can allow our house prices to rise. We can watch as our homeless population grows, more people sleep in cars, and the prospect of home ownership slip away from more Maori and Pasifika families. We can build taller fences and put up barbed wire to keep thieves out as we further isolate ourselves from ‘the other’ — people in different socio-economic circles than us. We can witness our society become more and more divided. 

Or we can design our housing system to ensure that everyone, no matter who they are, has access to quality affordable homes, homes that they can own should they wish. We can make the price of property commensurate with the real value of property. We can stop concentrating wealth via property into the hands of a minority at the expense of the majority, and we can think about how wealth that has been obtained without creating any real value can be redistributed in a sensible fashion. 

Redesigning the housing system to be more fair and equitable means we are going to have to make some changes in our thoughts, attitudes, policies and practices. We are going to have to give up a system that is helping an increasingly small segment of society get ahead economically for one that is more holistic and considers the wellbeing of all over the wellbeing of only some. It may be hard in the short term but a more equitable society, a society where we all feel more connected and safer, one in which all human potential is given the chance to develop, is surely a society that we’d rather live in. 

Be sure however, that if we fail to make the necessary sacrifices soon, it is our future generations that we are sacrificing.

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“Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, HOUSING and medical care…”

— Article 25 of the Universal Declaration of Human Rights