The Salvation Army’s home ownership subsidy agenda would be a disaster says the New Zealand Taxpayers’ Union.
Taxpayers’ Union Economist Joe Ascroft says “The Salvation Army is right when they say housing costs are a big issue for thousands of families around the country, but the solution to that is reforming the RMA – which acts like a regulatory tax – so the construction of new homes is easier and cheaper."
"If housing supply is constrained by regulations, subsidies will just cause price growth to accelerate, which would benefit existing home owners at the cost to hard-working taxpayers.”
“Home ownership subsidies were tried in the United States in the ten years prior to the global financial crisis. The subsidies encouraged families who were not well equipped to take on mortgages to do so anyway, in the pursuit of expanding home ownership.
"The policy was a
disaster because when families failed to meet mortgage
payments, banks and the Government were saddled with
significant debt burdens, with taxpayers eventually forced
to bail out the financial