Greens unveil 'rent-to-buy' scheme
Thu, 24 Jan 2013 9:45a.m.
By Dan Satherley
The Green Party has unveiled its new housing package, called Home for Life, which includes a progressive home ownership scheme.
It would mean the Crown buying houses, which families gradually pay off before owning their homes outright.
The Greens say it could cost families $100 a week less than a mortgage, and could be paid off within 25 years.
"The easiest way to understand our proposal is to think about it as a rent-to-buy scheme," says housing spokesperson Holly Walker.
"The Government would build affordable, high-quality, energy efficient homes, low and middle-income families would move into them and they would pay a basic rental each week that would cover the cost of the Crown's investment in the house – say about $200 a week.
"In addition to that, anything they paid above that amount would be used to purchase equity in the house – so let's say they paid an extra $100 a week on top of that, that's a total housing cost each of $300, and the $100 would go towards purchasing a share in that house, so the goal would be over the long-term they would be owning the home outright."
Ms Walker says buyers wouldn't need a deposit, which is often a barrier to home ownership.
"That's one of the beauties of the scheme – that can be a huge barrier for many families who find it easy enough to budget each week and to meet their ingoings and outgoings, but because of the cost of rent and the cost of living, are finding it increasingly difficult to put any money away to save for a deposit."
She admits the scheme would require new borrowing, but it would be borrowing in order to create an asset.
"The good thing about it is that rather than borrowing to spend, which is largely what we see with Government debt at the moment, there's an asset created that offsets that debt.
"The effect on the net debt of the Government's books overall would actually be neutral."
Last year Labour unveiled its KiwiBuild scheme, which aims to build 100,000 new homes in 10 years to sell for around $300,000 each. Ms Walker says while it's good Labour has its "thinking cap" on, the need for a deposit would prevent many of those in need.
"It's a great way to address the supply side and build lots of new houses, but for many families it still requires them to save a deposit and it still requires them to be able to get a mortgage from a traditional bank to pay for the home."
The Green Party would be open to negotiation with Labour, suggesting a percentage of homes built under the scheme could be set aside for progressive ownership.
"We've got a rich tradition in New Zealand of the Government taking a lead in the housing space, and I think what we're seeing at the moment is the consequences of what happens when they don't," says Ms Walker.
The Greens also have plans to improve the lot of renters too, with a proposed 'warrant of fitness' scheme for rental properties and limits to rent hikes.
"There's lots of goods and services that we purchase every day where we absolutely expect minimum safety and health standards to be met," says Ms Walker, "and how housing, given that it has such a critical impact on people's daily lives, really it's long overdue that we have some minimum standards for being able to rent a house."
They also want to limit rent increases to once a year and have hikes restricted to a formula set out in the tenancy agreement.
"Limiting rent increases to once a year and requiring that the formula for calculating them be included in tenancy agreements will protect tenants from arbitrary and unexpected rent hikes," says party co-leader Metiria Turei.
The Greens also want tenants to have the right to renew fixed-term leases to "give families greater security in their rental homes and allow them to put down roots in their communities", says Ms Turei.
"Security of tenure will allow tenants to request landlords fix problems such as maintenance issues without fear that it will lead to their tenancy not being renewed."
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1/02/2013 4:42:42 p.m.
MARCUS - when Labour was in power the world economy was at its best the world had seen for decades. Labour with surpluses after surpluses kept on spending and not putting it away for a rainy day - National took over when the economy was stagnating and eventually became a worldwide recession hurting economies at a rate not seen since the depression. I could go on about Banks being found wanting ponzy schemes being found out at the expense of the hard working/earning investors etc etc. If Labour was still in power this country would be dead and be a part of Australia with no so called treaty (not a bad idea)
31/01/2013 12:44:42 a.m.
You all talk of a Labour/Green coalition with negative outcomes yet recently even the manufacturing sector is now calling for a lower dollar and if needed higher inflation to create job growth and to prevent many more from leaving NZ's shores.
The fact with this announcement is that the greens have offered a policy,what has the National/Act/United coalition delivered to date,absolutely nothing.
With NZ's highest migration rates to Aus ever occuring during this govt' term it would seem highly likely that those who have left know what kind of future we'll have under a right wing leadership and sadly many kiwis still living in NZ see it everyday.Highest unemployment rates in 13 years,debts at near record levels,assets being sold again at record levels it only reminds us that this current govt have no real strategy to combat their failures only more hairbrain schemes aimed at rewarding the party faithful.
30/01/2013 5:36:02 p.m.
WOW a Labour, Greens & Mana party government, now that will most definitely send us over taxed workers oversea's. They will absolutely destroy this country instead of looking after the ones who actually pay their wages. I for one would look at selling everything and going cause this coalition would be very scary to say the least - they are not on the same planet as any sane person. God help us if they ever got voted in.
25/01/2013 8:41:30 a.m.
The greens with Labour want to give NZ double digit inflation, devalue our dollar 25% which by itself will raise prices by 1/3, and to help finance their policies they will offer much higher interest rates on govt bonds to borrow more, pushing the NZrs interest rates up. These figures dont stack up with current interest rates, let alone the higher interest rates that the Greens/Labour want - supposedly to stop people investing in property, ie making owning a home less affordable!Even the CGT is flawed as currently people are taxed on capital gains, as the trader thresehold in NZ is low, if your a trader then capital gains is taxed as income. But Labours CGT would shift this thresehold and make many capital gains currently taxed to be tax free, as those people bought labour some dinners and the policy. Also, how will the Banks respond? Banks pay 28% currently on profit, and with CGT of 15% they will move what profit they can from 28% to 15% legally, ie Labour stands for the banks paying less taxes, after just complaining they dont pay enough!
25/01/2013 8:09:05 a.m.
Thats funny Jim, National's own housing policy has been a failure, hence heatley's replacement with another incompetent.
24/01/2013 11:37:33 p.m.
Southern man wrote:
The real solution is regional development. NZ has enough houses overall, but it needs more jobs in the regions... which people are leaving for Auckland. Create employment in the regions where houses are cheaper, and you'll support communities, reduce congestion in Auckland and defuse the house pricing spiral. Simple.
24/01/2013 11:17:46 p.m.
Jim Seaview wrote:
Hi @KAHU I am just pointing out that there is the National Party which seems to be looking at the problem of unaffordable housing NOW and in opposition there is only a coalition of Labour Greens and Mana for the electorate to choose from in 2014 for a potential new Government. Labour of course are going to introduce a Capital Gains Tax on property and if you think that this additional new tax (that only the Leftists want) is going to reduce the value of property for potential new home owners you would be fooling yourself. When you look at the list that Labour leader David Shearer has already signaled in addition to introducing capital gains tax - ie Paid Parental leave from 14 to 26 weeks, Free breakfasts and lunches at decile 1 to 4 schools, paying school fees for a free education, removing gst off food, increasing the age of pension entitlement, managing our exchange rate(printing money)and to
properly resource the Police - One has to ask them "where is all the additional money going to come" from to finance the Rent to Buy scheme of the Greens or the 10,000 houses that Labour have promised for around $300,000 each including land???
Kahu - Maybe you know something that the rest of us have missed.
24/01/2013 8:50:58 p.m.
What a joke the Greens are - true nut bars - open your eyes you morons who support this - it it is totally unworkable and delusional. They have not costed this correctly at all. This show everyone why a left leaning coalition would truly ruin NZ.
24/01/2013 8:48:47 p.m.
Combine this idea with the greens previous plan of Quantitative Easing and it is a no-brainer!
New high-efficiency housing without the interest heading to off-shore banks (who lend money from their own quantitatively eased central banks anyway).
As humanity sources a large share of global energy from non-renewables, by building high efficiency homes you play a role in solving the overall energy crisis. In the case of NZ, reducing domestic energy demand - freeing up excess energy to power the electric vehicle fleet which will one day put a sizeable energy demand on the grid.
24/01/2013 7:07:58 p.m.
How will they get the houses past the RMA with those costs? They cant without major altering of the Labour/Green RMA which has tied all new development up in knots.Please Greens, show us some new housing development in auckalnd with 1000's of sections for like $100k or less!
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