24 June 2009
Media Statement

Selling off state housing stock not the answer

National’s plan to sell state houses to tenants creates risks to the long-term provision of social housing and could see new tenants pushed to city fringes,
Labour’s housing spokesperson Moana Mackey.

“Housing Minister Phil Heatley’s plan to allow state house tenants to buy their own homes won’t have an overwhelming impact, as Mr Heatley himself has admitted, because very few tenants can actually afford to buy one.

“The average state house now has a value of around $350,000, so even if the Government extends the cap on Welcome Home Loans to enable them to be used to purchase a state house, an average $22,500 deposit would be needed on top of the decent weekly income needed to service such a mortgage.

“However the policy change does create the potential to erode the number of state houses the Government owns and this could have a longer term negative impact on governments’ ability to provide social housing for families in need.

“Mr Heatley said today that each house sold would be replaced by another house for a deserving family. But he has qualified that by saying some of the replacement houses are likely to be leased and not bought,” says Moana Mackey.

“Leasing a house is not the same as acquiring a permanent asset and given the current waiting list and its likely increase as a result of the recession, the last thing we need to be doing is reducing the number of houses owned by the state.

“Labour’s other concern about the policy is that the replacement houses could end up being bought or leased in cheaper areas on the fringes of towns and cities, which would take people further away from transport and employment.

“Phil Heatley said today he supported mixed communities, yet his Government has rejected Labour’s plan to build 500 new state houses in the new Hobsonville development because John Key doesn’t want state houses in his electorate.

“Labour’s affordable home development in Hobsonville has also been put on the backburner. Added to that, was the absence of any funding for other affordable housing initiatives in the recent Budget and the Government’s failure to stimulate jobs in the face of mounting unemployment,” says Moana Mackey.

“Mr Heatley says he wants more home ownership, but without jobs and affordable home ownership initiatives, he won’t make much headway.”

ENDS