Q+A: Housing and Urban Development Minister Phil Twyford interviewed by Jessica Mutch
Housing and Urban Development Minister Phil Twyford is confident the government can build more than 27 houses on average
per day.
‘I know expectations are high, but we make no apologies for being ambitious about fixing this problem. We have a social
and economic disaster in this housing crisis. It needs an ambitious response.’
When questioned by Q+A’s Jessica Mutch on doubts expressed by the Reserve Bank about Labour’s plans, Minister Twyford
said, ‘The Reserve Bank commentary was made on the basis of some Treasury advice that I don’t believe was based on all
of the information to hand.’
JESSICA So that Treasury advice was wrong, you think?
PHIL They made certain assumptions without looking at all aspects of our policy. For example, we know that workforce
constraints are a big issue.
Minister Phil Twyford also told Q+A he would like to build double the number of state houses promised in opposition.
‘So we said while we were in opposition, that we wanted to deliver a net increase of at least a thousand a year, and we
said we wanted to be more ambitious than that. I’ve asked officials to look at how we can double that and build 2000
extra state houses a year, and I’m looking forward to their advice coming back to me on the options on that.’
Minister Twyford also reiterated a commitment to ‘stop the mass sell-off of state housing’ but said, ‘you’d be crazy not
to sell the odd one here and there to maintain and upgrade the portfolio.’
Q + A
Episode 37
Phil Twyford
Interviewed by JESSICA MUTCH
JESSICAJoining me now is Phil Twyford, Housing and Urban Development Minister. Thank you for being here.
PHILMorning, Jess.
JESSICAYou are set to build 100,000 houses over the next 10 years. On average, that works out to be 27 per day. How is that
doable?
PHILJess, I think everyone knows that we inherited a mess. But I’m really confident that we’re up for the job. In our first
hundred days, we are taking the first steps towards setting up our KiwiBuild programme, our Housing Commission to lead
the development of big urban development projects. We’re banning foreign buyers. We’re about to pass legislation that
will make it illegal for landlords to rent out cold, damp homes. We’ve really hit the ground running, and I know
expectations are high, but we make no apologies for being ambitious about fixing this problem. We have a social and
economic disaster in this housing crisis. It needs an ambitious response.
JESSICASo you can build 27 houses per day on average?
PHILI think we’ll build more than that, Jess. I think we’re—
JESSICASo, more than 100,000 over the next 10 years?
PHILWe’re going to build 100,000 affordable homes for young Kiwi families to buy; we’re going to ramp up the building of
state houses instead of selling them off, as the former National government was doing; and we’re going to do that in the
context of large urban development projects with all kinds of different housing types, including open market housing.
JESSICASo, this is what I want to ask you about, because the price of a house you say is affordable — $600,000 for a house; $500,000 for an apartment or a townhouse — how are you going to get developers involved in this when if you look online, for example, we look at an example in Three
Kings where a three-bedroom townhouse is $1.3 million? Why would they be interested in working with the government?
PHILThe problem that we’ve got is a massive market failure at the bottom end of the market, and developers are choosing not
to build affordable homes that young families can afford. They’re building at the top end because they’re in the
business to make a dollar. We’re going to put the government in the market and choose to build affordable homes at
scale, large volumes of them, and on-sell them at cost to first-home buyers. We know we can do it, because some people
who are choosing — some companies, some non-profit organisations choosing to build these houses already. The difference
is that under Labour’s KiwiBuild policy, we’re going to do it at scale.
JESSICAWhat about with the developers, though? Are you going to be subsidising them to try and entice them to build these
houses for you at a much cheaper rate?
PHILNo, we’re not going to be subsidising them. In fact, we’re about to go out to market and talk to the developers about
exactly how the KiwiBuild offer is going to work with them. And what we’re proposing to do is to say to developers,
‘Look, if you’re building a development with 400 townhouses or terraces, you can make a share of those KiwiBuild
affordable houses, and we’ll buy them off the plan.’
JESSICAThat’s only a portion of those new developments. How are you going to build these $500,000 and $600,000 homes?
PHILWe’re confident that developers will build those homes if we’re offering them the kind of scale and volume that they
need. And the critical thing here is that uncertain access to finance means that a lot of these developments are falling
over or are on hold at the moment. We will take some of the risk out of it, speed up those developments and actually
guarantee a supply of affordable homes.
JESSICABut how are you going to do that? Because let’s say you go to a developer; at the moment, 10% on average. If you say,
‘Look, we want 50% to be affordable homes,’ that brings down the value of the development.
PHILYes, but we take some of the risk out of it and speed the project up. That’s good for the developer’s bottom line. We’re
also going to be doing this at scale, so when we’re tendering KiwiBuild homes, 10,000 a year, that means some developers
and some construction companies can sharpen their pencil and do deals, for instance, on the build costs and building
supplies that we’ve simply never seen before in this country.
JESSICAYou have your doubters on this, including the Reserve Bank. It says that it’s going to be more likely 5000 houses rather
than the 10,000 because private activity will decrease. What do you say to that?
PHILThere are the doubters, and there are the knockers.
JESSICABut this is the Reserve Bank.
PHILThe Reserve Bank commentary was made on the basis of some Treasury advice that I don’t believe was based on all of the
information to hand.
JESSICASo that Treasury advice was wrong, you think?
PHILThey made certain assumptions without looking at all aspects of our policy. For example, we know that workforce
constraints are a big issue.
JESSICASorry, I just want to make sure — so you’re saying that the Treasury advice was incorrect?
PHILYes, I am.
JESSICAThat seems like a very bold move for a new minister.
PHILWe’ve looked at the advice. It was based on incomplete information. I’ve had the Treasury officials in my office. We’ve
talked through the elements of the policy, and I’m confident we can move ahead and be on the same page. Their advice was
based on the fact that there are constraints. Of course there are. The former government didn’t invest in the workforce.
We’re going to. We’re going to throw open the doors of the polytechs; we’re going to massively increase apprenticeships
in the construction trades; we’re going to grow the local workforce.
JESSICAYou’re cutting immigration, though.
PHILWe’re going to bring in skilled tradespeople from overseas just as the past government did in Canterbury after the
earthquakes. We’re going to work with companies that can use off-site manufacturing, building houses in factories that
don’t need such a big workforce. We are going to address these constraints. But, look, I make no apologies for being
ambitious. This is a crisis; it requires an ambitious response.
JESSICAAlright. Who’s going to get these homes? Will they be means tested? How will it work?
PHILThey won’t be means tested. We think that we’re going to build affordable houses. We’ll ballot them in the first place,
because—
JESSICADoes that seem fair, though?
PHILWell, we want these homes to be available to first-home buyers. We’re going to build thousands of these homes, Jess, but
we have to ballot them in the first place. That is the fairest way to do it, and we don’t want to set up a heavy,
bureaucratic, means-testing regime to do it.
JESSICABut don’t you want to target those people that actually need it? Isn’t that the point?
PHILThere are lots of people who need it across different income brackets.
JESSICABut don’t you want to make sure that the people in need, of the greatest need, get the first wave, if you like?
PHILWe are going to be doing things that ease the housing crisis for people right across the board. So we’re going to make
life better for renters; we’re going to build more state housing; we’re going to massively increase the supply. But,
Jess, I’ll say this — it’s not the first KiwiBuild house that’s the most important; it’s the last KiwiBuild house.
Because when we build that last one, that will mean that we’ve fixed the crisis, and a whole generation of young Kiwis
will have a crack at the Kiwi dream of affordable housing.
JESSICAHave you thought about targeting your police, your teachers, etc, especially in Auckland, where it’s so hard to get
houses?
PHILYeah, we have this ridiculous situation now where, because the house prices in Auckland are so expensive, the very
people that we need to run the city and keep the economy ticking over can't afford to live in the city. But the only
really sustainable way to fix that problem is to the tackle the demand and the supply factors that have given Auckland
some of the most expensive housing in the world, and that is taxing speculators and massively increasing the supply of
housing.
JESSICASo why not give those first houses to police, to teachers to make it easier?
PHILI think it would be virtually impossible to do that in a way that was fair and efficient. We need to just— You know what?
The answer to this problem is to build more houses.
JESSICAAnd to give it to the people who need it the most.
PHILYeah, but we’re not in the business of setting up some heavy bureaucratic system to allocate them on the basis of need.
Honestly, Jess, I don't know how you would do that in a way that was logical and fair and efficient.
JESSICAState houses – how many will you build, new houses will you build on top of the KiwiBuild homes?
PHILSo we said while we were in opposition, that we wanted to deliver a net increase of at least a thousand a year, and we
said we wanted to be more ambitious than that. I’ve asked officials to look at how we can double that and build 2000
extra state houses a year, and I’m looking forward to their advice coming back to me on the options on that.
JESSICABecause they’re desperately needed, aren’t they? We saw figures that were on the news on our show last night saying that
it’s 27% increase of those on the waiting list compared to last year.
PHILOne of the really disturbing things that’s come out in the last couple of weeks is not only the fact that we have a
shortfall of 71,000 homes in New Zealand. That’s information the former government did not release in the lead-up to the
election. But what’s also disturbing is that when I look on the data on homelessness and emergency housing, it seems to
be that there has been a huge suppressed, unmet need for housing — overcrowding. And now as we’ve had this big public
debate about it, more services have been provided; a bit more housing’s been provided. There’s more and more demand
coming out of the woodwork, and that’s extremely concerning.
JESSICAYou said there’s going to be a blanket ban on selling state houses. Is that smart, though, given that you may have
million-dollar homes that could provide housing for three or four families in other areas? And Housing New Zealand
themselves say that there are four-bedroom homes, that that’s what they need, and there are too many three-bedroom homes
at the moment.
PHILOur commitment is to stop the mass sell-off of state housing—
JESSICA‘Mass’ — what do you mean by that?
PHILWell, at the moment—
JESSICASo you will be selling some.
PHILThe National government was, in the last term, negotiating to sell 2500 state houses in Christchurch, and our commitment
is to stop that.
JESSICASo how many will you sell?
PHILWell, I think you might sell the odd one here and there to maintain the portfolio.
JESSICAHow many, though?
PHIL I can’t put a number on that, Jess.
JESSICABut it’s not a blanket ban, which is what you were saying.
PHILNo, no, it’s never been a blanket ban. We said we’ll stop the sell-off of state housing, the mass divestment of state
housing.
JESSICABut you will sell a few. So it’s mainly selling off, not stopping the sell-off.
PHILNo, you’d be crazy not to sell the odd one here and there to maintain and upgrade the portfolio. National’s policy was the
wholesale divestment of thousands of houses to private investors and the private sector. That’s not our policy. We are
going to build thousands of extra state houses. Jess, if—
JESSICAI just want to clarify something, though.
PHILSure.
JESSICAWhen you say you’re going to sell the odd state house, how many?
PHILI can’t put a number on that, but you’ll be silly—
JESSICACan you give us a ballpark figure?
PHILNo, I can’t.
JESSICABut less than the 2000 that National was—
PHILWe won’t be selling them off in batches of hundreds and thousands, which is what the former government was doing. Look,
if the former government had built a couple of thousand extra state houses every year it was in office, we would be
18,000 state houses ahead instead of the 5000 behind that we are now. We simply would not have a problem with
homelessness if they’d done that.
JESSICALet’s have a chat about where these houses are going to be built. Going out is part of your plan, to areas, for example,
like Pukekohe, which grows a lot; there’s very rich soil there. Last week on the programme, Whena Owen did a story where
she spoke to growers who are really concerned that you’re going to allow building on some of their rich soil. I want to
play you a clip and then get your reaction, so let’s have a listen to that now.
PHILSure.
MAN 1All of that there was all crop and good crops three years ago. It’s all residential.
MAN 2It’s very saddening. So what we should be doing is building all over our inferior soils and keeping our better ones.
MAN 3Nick Smith, he passed it all off as a Special Housing Area, and now it’s been built on; it’s all been fast-tracked. I
just think it’s, yeah, it’s criminal, and it’s a shame.
MAN 1Food security should be at the foremost of everybody's minds.
WHENAIn New Zealand.
MAN 1In New Zealand.
MAN 3I’d like to speak to the Minister of Housing, Phil Twyford, and come and show him what’s going on here, and I’d like to
see him face-to-face and ask him, you know — is he going to keep taking these valuable soils? Or is he going to see it
our way and put the brakes on it?
JESSICASo what’s your answer to that question, to that grower?
PHILI share that grower’s concern, and I don't want to see special areas —whether it's the growing soils of Pukekohe,
whether it’s the Waitakere Ranges, sensitive coastal land — I don’t want to see that swallowed up by housing. I
campaigned in opposition against the former government’s crazy plans to build housing on urban parks.
JESSICASo how are you going to stop it?
PHILWell, already, Auckland Council's Unitary Plan actually protects, I think, almost all of the top growing soils out in
Pukekohe. It’s not our intention to change that. In fact, Jess, I want to see a planning system that allows our city to
make room for growth but protects areas of special value for future generations.
JESSICABut that’s their concern, you see, because if you put a little area like this around and build houses right up to that,
you’ve got irrigation issues; you’ve got spraying issues. How are you going to protect areas like that?
PHILThat’s right. That’s absolutely right, and that’s the job of Auckland Council’s Unitary Plan. The encroachment that we
see in Whena Owen’s story largely happened as result of old zoning decisions and Nick Smith’s Special Housing Areas that
pushed through housing developments without good planning being done.
JESSICAJust finally, will you go out and have a chat to those growers sometime the next few months?
PHILI’d be very happy to, because I share their concerns.
JESSICAAll right, thank you very much for your time this morning — really appreciate it.
PHILThank you.
Transcript provided by Able. www.able.co.nz
Please find the full transcript attached and the link to the interview here.
Q+A, 9-10am Sundays on TVNZ 1 and one hour later on TVNZ 1 + 1. Repeated Sunday evening at 11:35pm. Streamed live at www.tvnz.co.nz
Thanks to the support from NZ On Air.
Q+A is on Facebook, http://www.facebook.com/NZQandA#!/NZQandA and on Twitter, http://twitter.com/#!/NZQandA