Housing game-changer: Spreading the blame

Housing remains the government's biggest weakness and so National is redoubling its efforts. No, not to build houses, but to contain the political damage

I can't give you a precise day or hour, but some time in the past fortnight, National has admitted defeat over Auckland's housing crisis. You can see it in the calculated attacks on Auckland Council and the lack of action in the Budget; the government's moved into 'managing failure' territory.

Don't get me wrong, the desire for more houses remains (although so many new houses. They don't want Auckland home-owners to stop feeling rich). They are committed to opening up land and have done so successfully.

What's become clear is that Auckland's problem is no longer a land supply problem, it's a house supply problem. The Special Housing Areas have opened up over 50,000 sections according to the government, but only 1000 houses have been built. Even Auckland Council estimates six and a half years worth of land is ready to build on. What's missing is a will (or requirement) to build, tradie capacity and, arguably, a government commitment to a mass building programme.

Instead, what we've got from National seems to be an admission any fix on Auckland house prices is years away and what matters to them now is spreading the blame.

What's clear is that National, as is their well worn tactic, will do its best to ensure the blame gets shared around. Bugger the relationship between Auckland and Wellington, they will blame the Auckland Council at every opportunity so that any voter anger directed at the government becomes 'a plague on all their houses'.

National has deployed this tactic effectively against Labour several times, always trying to tie past Labour governments into any current woe. Now it's Auckland Council's turn (and in the past few days there seems to have been no recognition by the council that the game of changed and National has declared war on them. Like Chamberlain the Council still seems to naively believe in "peace in our times" while the tanks are rolling towards Czechoslovakia.)

Bill English on The Nation took the rhetoric to a new level. The council is to blame for the lack of land supply, lack of houses and lack of infrastructure. In fact its past 20 years of planning rules (often under National-aligned mayors) is even to blame for the current homelessness crisis that's seen more people living in cars and garages.

Auckland Council is in a bind on infrastructure. Not that you'd know it from most of the debate, but it's willing to sprawl somewhat. It's problem is the lack of roads, rail, sewers, footpaths and the like on the outskirts of the city and an inability to pay for it.

Auckland Council is maxed out on debt; if it borrows more it suffer a credit downgrade and the local government authority that borrows on behalf of councils simply won't let it do that, as I understand it. It can't raise rates, because they're already high and they'd suffer a revolt. Thy want to introduce congestion charges, but the government won't change the law to let them.

So where does the money come from? Says English:

"It is the council's responsibility. That's the deal. They get to decide on how their city is planned, and they get to pay for the development."

But Labour is willing to borrow to help. Grant Robertson:

"I think we've got to work together with Auckland to pay for the infrastructure. There's no point throwing around a blame game and elbowing each other in the ribs to say who is responsible. Clearly, the government has a shared responsibility here."

For once, Labour is in the sweet spot. It can watch National and the council tear strips off each other and look like the grown-up. And they can point to their four year old KiwiBuild plan and say 'told you so'.

On that point, it's interesting to note that English said this in that interview:

"we have more money than we can spend on places, on houses for people in serious housing need in Auckland. The problem isn't money; there's enough of that. The problem is getting enough houses".

It's a fascinating argument. That the government could pay the rent subsidies, the relocation or whatever, if they only had a house. What that willfully ignores is that you can spend that money on building a house. (Or the law to require those land bankers to build).

Ultimately, National may have to accept the inevitability of a government building scheme, swallow that dead rat and promise that themselves.

In fact, looking at the apprenticeships promised in this year's budget, it's just occurred to me that a National version of KiwiBuild could be the perfect surprise for Budget 2017. Pull the rug out from under Labour's feet just before the 2017 election.

But for now, National's focus is on buying time and that means spreading the blame.