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No means testing for KiwiBuild homes

Newshub logoNewshub 3/11/2017 Dan Satherley, John-Michael Swannix, Lisa Owen
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Any Kiwi who hasn't owned a home before will be allowed to apply for a KiwiBuild home, regardless of their income or wealth.

Housing Minister Phil Twyford says the Government doesn't want to set up a "heavy bureaucracy".

"We know the desire for home ownership really cuts across all kind of social groups and income levels. Our goal is to make these houses available in a fair and transparent way," he told Newshub on Saturday.

The only requirements will be that the applicant hasn't owned property before, and is a New Zealand citizen or permanent resident. Even then, there's no guarantee of getting a home - at least right away.

"We're going to have to, in the early stages at least, ballot some homes. We know there will be far greater demand that can be immediately supplied," said Mr Twyford.

"People who meet the criteria will put their name in the ballot to have a fair crack at getting an affordable KiwiBuild home."

a large body of water with a city in the background © Provided by MediaWorks NZ Limited

The Government may also increase the length of time the owner has to stay living in their KiwiBuild home before they can sell it, without having to give the Government any capital gains. Labour's policy before the election was if the property was sold in the first five years, any capital gains would need to be handed over.

Mr Twyford told Newshub it could end up being "something between five and 10 years".

"If someone needs to sell a property within that period, there would be a requirement that a fraction of the capital gain will have to be reimbursed to KiwiBuild. That's just a basic matter of fairness."

When will KiwiBuild begin?

Perhaps tired of being asked when the first KiwiBuild house will open its doors, Mr Twyford has said it's the last KiwiBuild house he's looking forward to the most.

"The first KiwiBuild house will be important, but actually the most important one will be the last KiwiBuild house," he told The Nation on Saturday morning, "because at that point we'll know that every Kiwi family has had a shot at affordable housing and then we'll know that our job is done."

For the first time however he's provided a figure on just how many affordable homes the Government plans to build in its first three years - 16,000.

The aim is to ramp that up to 10,000 a year, for at least 10 years.

"I hope that by squeezing much better deals out of the supply chain when we're tendering 10,000 homes a year and the Government has more control over the land costs by coordinating these big developments, we will be able to drive down costs."

Despite construction costs rising at least 30 percent since Labour announced the KiwiBuild policy five years ago, Mr Twyford insists his party's budget still adds up, as the figures have been constantly updated.

It currently estimates it'll cost $2 billion to begin with, with money from sales being put back into the fund.

"We have a market failure at the affordable end of the market," Mr Twyford told host Lisa Owen.

"There's no shortage of 300sqm waterfront homes - but there's a dire shortage of the kind of high-quality affordable homes that young families could afford to buy and live in. So we're going to intervene in the market to fix that market failure... that's the job of Government."

He dismissed criticism the Government is effectively subsidising homes for private buyers.

"Some critics... argue that by choosing to build affordable housing and forgoing the potential profits by building what the market could bear, that's an effective subsidy. We don't buy that. We are in this game to build affordable housing for young Kiwi families, and we make no apologies for that."

To fit the majority of those homes inside of Auckland, where they're most needed, Mr Twyford says the metropolitan urban limit will need to be pushed out further - but says that can't be done until a better way to pay for infrastructure is found.

"We're going to build affordable houses, we're going to tax speculators, we're going to do all those things, right, but if we want a lasting solution to this problem we have to make reforms that will allow the market to deliver better outcomes on its own.

"The two big things we have to fix there are the broken system for financing infrastructure... and the highly restrictive planning rules like the urban growth boundary. But you can't get rid of the urban growth boundary without fixing the infrastructure financing issue. This is going to be a major priority."

He's proposed targeted rates on property owners near big infrastructure projects, since they're likely to see the most benefit from them.

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