Bit of English

By Eric Crampton 03/03/2014

NZ Finance Minister Bill English is awesome. I love every last bit of this.

“With respect to so-called urban sprawl, I think that’s a nonsense. If you’re against urban sprawl and that means lower to middle income Kiwis can’t buy a house and you can’t build an apartment in the middle of Auckland for less than NZ$600,000, then that’s too high a price to pay. And if it means driving up house prices in a way that wrecks the economy then that’s too high a price to pay,” he said.
“Funnily enough the people who are most worried about urban sprawl live in the middle of the city. They don’t get to see it. How much time to they really spend out the end of the Western motorway or Botany? None actually. They think you should be able to walk to the countryside. Well…welcome to Gore. If you’re really mad, that’s where you should go. But they don’t. They stay in Auckland Central,” he said to laughter from the audience.
“What’s actually happened is that the local authorities were keen for a denser city, but the inhabitants weren’t, so they’ve jettisoned a fair bit of the densification aspect,” he said.
“So if Auckland wants to grow now, it has to grow out because you don’t want it to grow up. Now that’s a fair choice, but please don’t stop it from growing out as well, otherwise we’ll get another few years of 15% house price growth and you get a real mess when it crashes,” he said, adding the special housing areas agreed under the Housing Accord with the Auckland Council “do spread the city because the planning rules don’t let you do anything else.”
“We’re indifferent as a government as to whether you grow up or out. But you said don’t grow up, so we expect to help you grow out.”
English said people making planning decisions in Auckland, Wellington and Christchurch needed to understand they were making decisions about New Zealand’s largest asset class, where the decisions they make affect the whole economy, not just your neighbourhood.
“Of course there’s tension there, but we are pretty determined to turn ourselves into an affordable housing market,” he said.
“There’s no obvious reason why little old New Zealand should be one of the most expensive housing markets in the developed world. It really puts pressure on our households. It’s one of the reasons why we have interest free student loans, working for families, subsidised early childhood care and savings are low,” he said.
High mortgage costs were a reason why the Government provided payments supplementing incomes costing billions, “and a lot of that is driven by planning decisions in this city.”

When land use regulations are all messed up, everything else gets screwed up too.

Oz economist Leith van Onselen’s right:

But while he pines for sound people on the Australian right, I wish that the New Zealand left could match the Australians. Here’s Australian Council of Trade Unions economist Matt Cowgill on housing in Australia:

There’s a trade-off at play here, one that can’t be wished away or ignored. With a growing population, you can’t restrict rising density in established suburbs, prevent sprawl on the urban fringes, and prevent housing from being unaffordable. Pick two out of the three. The urge to preserve historic neighbourhoods, the desire the conserve all the green bits around our cities, and the wish to maintain affordable housing are all noble impulses with which I sympathise. But, again, we can’t have them all.

Which is pretty much the same thing that Bill English said. Sound economics, left or right, is on the same page on this stuff. Stupid land use regs hurt poor people while benefiting middle and upper class homeowners.

Here in NZ, we’re stuck with the Council of Trade Unions’ Helen Kelly.

Bill English, in the speech linked above, talked about selling off some of the Housing New Zealand stock of housing so that they could better match social housing to locational needs. It makes no sense to have a Housing NZ house in an expensive part of town when selling it off could fund social housing for three families instead. Here’s English:

“In housing and other areas we will continue recycling taxpayer assets to free up money for reinvestment in areas where there is genuine demand,” he said.

Later in the questions and answer session with the audience, he expanded on the plans.

“We actually don’t need to own all those houses to help those people who need help,”he said, referring to the Government’s partnership with the likes of the Salvation Army, the New Zealand Housing Foundation and IHC’s Idea Services.

English said the Goverment wanted to assess a family’s need for housing in an area close to jobs and schools, which was difficult to do with its existing stock of 60,000 to 70,000 houses. “You’ve got to stick them in a house that’s empty,” he said.

“That will mean growing the non-Housing Corp social sector and redeveloping the Housing Corp assets.”

English said there were big tracts of Auckland such as Mt Roskill and Tamaki where “there’s endless potential for supplying medium housing to the Auckland housing market if we redevelop those areas.”

“But our top priority is to meet the needs of the people in the houses first, and then redevelop what we don’t need in order to supply the market better, and there could be a lot of that happen.”

Here’s how Helen Kelly responded.

Pure partisan idiocy. Why oh Why is the NZ left so freaking dumb?

0 Responses to “Bit of English”

  • It may not add to housing crisis, but govt selling off social housing in what are deemed to be “expensive” areas and reinvesting in housing in presumably less popular and hence less valuable areas will certainly be adding to social crisis.

  • Is it better for one lucky family to get social housing in a posh area, while 2 are left in the cold, or for all three to get social housing in less popular areas?

  • Is it better to aggregate all the socially deprived in one area where they are generally poorly served by other social goods eg public transport, library, education, health provision, etc or to recognise that spreading this demographic through the community has the advantage of providing advantageous social settings that enhance the opportunities presented (especially to youth) and so reduce the requirement for social housing over time?

    Related concept:

    Of course, if reduction of cost is govt policy and we accept it as a good thing, perhaps Parliament should be relocated to Gore. All the stated advantages apply.

  • Yes, Ashton, pepperpotting seems better. But go and read English’s actual comments. He’s looking to re-evaluate their portfolio to match needs, taking into account employment and schooling opportunities.

  • That I agree with. Seems insane to have huge houses with old couples in them claiming some sort of inalienable right to stay as long as they want, and other such nonsensical outcomes. That’s good resource allocation, assuming that the up or downscaling can be done in a reasonably humane manner

  • Ummm…..are these styles of post scientific in any way?

    “Awesome”, “clowns”, “idiocy”, Stupid”, “freaking dumb”. Words rarely seen or heard in a scientific treatise.

    Oh…its election year. Silly me.

    • Ross, you’re wrong. Some things are objectively wrong, clownish, idiotic, stupid, and freaking dumb. Were prominent politicians or political activists to claim that fluoride caused infertility and so shouldn’t be added to water, I would fully expect colleagues here at SciBlogs on fluoride-relevant channels to say that such a statement is wrong, clownish, idiotic, stupid, and/or freaking dumb.

      It is clownish, wrong, idiotic, stupid, and freaking dumb to say that changing the ownership of one set of houses adds to the housing crisis UNLESS you add in that the new owners would tear them down and nobody would ever replace them. But that’s hardly the policy the English here proposed.

  • “re-evaluate their portfolio to match needs.”

    Does infill housing in metropolitian areas matches our labour market needs?. Are all the green spaces becoming dairy farms?. It matches the needs of people who want to live in cities ( service workers/politicians etc. ), and property developers, but is that really where NZ’s main labour needs will be?.

    Infill housing works for developers, but existing infrastructure isn’t cheap to expand, so we join the third world with power brownouts, variable pressure mains water, dug-up roading, and overburdened telecommunications, stormwater and sewerage, with costs spread over existing ratepayers who gain minimal benefits.

    Maybe we should encourage people to move to areas where they can be gainfully employed, and create housing in regions for intended for development.

    Developing regions so the employment prospects, education, and lifestyle are attractive to workers and their families seems far more useful that worrying about vertical/horizontal housing growth in major city suburbs.

    Given that recent governments seem to have abrogated their responsibility to guide and provide research leading to technological wealth creation, infilled suburbs could become slums rather quickly as the cost of urban transport is unlikely to decrease, making services/products even less competitive.

    • Sure. Encouraging social housing in areas close to potential employment and schooling is the kind of thing that Bill English was talking about, and for which Helen Kelly said he’d be willing to sell his grandmother.

  • “I would fully expect colleagues here at SciBlogs on fluoride-relevant channels to say that such a statement is wrong, clownish, idiotic, stupid, and/or freaking dumb”

    And you’d be wrong – while I might think that those who are anti-fluoride are misusing & misrepresenting science in what they say & promote publicly, I personally would not use the adjectives you list above. It serves no purpose, comes across as polemical, and is highly unlikely to have a positive impact on those I’m trying to persuade to my point of view.

    • There are policy positions with which I agree.
      There are policy positions with which I disagree, but that are entirely debatable.
      There are policy positions that are simply idiotic. I think we do harm by failing to highlight the difference between category 2 and category 3, above.

      For example:

      “Selling off social housing in order to contract in private providers sounds fine, but what guarantee do we have that National will follow through with the second half of the proposal instead of just pocketing the proceeds? And how can we be sure that private landlords will be better landlords than Housing NZ?” That’s eminently debatable and not partisan idiocy. Category 2.

  • “Sure. Encouraging social housing in areas close to potential employment and schooling is the kind of thing that Bill English was talking about, and for which Helen Kelly said he’d be willing to sell his grandmother.”

    I can’t think of an example of govt (this or any other recent one) building new social housing in central Auckland, Wellington or other major NZ city.

    I can think of a number of social housing areas in those areas being sold off and replaced with housing on the outskirts of the city, in areas with the infrastructural deprivation I described earlier.

    So, if this is what Mr English is thinking about, he’s hiding the thoughts pretty well, or had an abrupt change of view.

    • He’s talking about a shift to renting from private landlords as part of the mix. The government doesn’t have to own the housing to provide social housing.

  • “The government doesn’t have to own the housing to provide social housing.” No, it doesn’t. But how would you suggest it guarantees that the people needing the social housing aren’t going to end up somewhere out on the periphery, away from potential employment & schooling & social services & good amenities?

  • Alison, I read English here as saying that they have a current problem where existing Housing NZ houses aren’t well located for employment and schooling and that selling them off would let them better match locational demand – the problem you’re wondering if they can guarantee that they can solve.

  • Thee is an implied assumption that the existing houses are NOT near employment and schools. Now, not to put too fine a point on it, but employment and schools are located in a reasonably randomised spread across our major centres. This is the point I was making earlier – it is contradictory to claim “better localisation” if by that you mean “site them where its cheapest” – like outer Mt Roskill, or East Tamaki (code word for Otara). I still see nothing in Mr English’s statements that mitigates against his poorly disguised social separation intent.

  • Eric,

    Coming to this late, but a few loose thoughts –

    You wrote “I would fully expect colleagues here at SciBlogs on fluoride-relevant channels to say” – aside from speaking for others, you’re better to defend things as they stand. (Calling on the argument that others do similar, whether they actually do or not, is a fallacious argument, unfortunately!)

    In the final sentence of your article ‘so freaking dumb’ refers to the people making the remarks, “the NZ left” and by implication Helen Kelly, not the statements made. Better to stick to the things said, lest it look like mud-slinging IMHO.

    In your article, the references to the statements as ‘silly’, etc., read may as mud-slinging to others because they’re delivered unsubstantiated and thus read as empty dismissal. Just my humble opinion, but it’d read better if you laid out why you feel those ideas are wrong-headed. After all, that’s the ‘comm’ bit in sci comm 😉

    I can’t help suspecting your suggested addition to Kelly’s thinking (“UNLESS you add in that the new owners would…”) is wrong. Perhaps you might have asked her and found out rather than presumed? (I suspect she simply is referring to the idea that the size of the state housing portfolio is being reduced; I wouldn’t know, but I wouldn’t presume to know either.)

    Finally, just by way of feedback and speaking for myself – I feel much, if not most, of what you write is commentary/opinion with little in the way of science. Not saying very post should be “science” (nor Econ Sci has no modelling, etc. or that the topics themselves aren’t worth considering), but I find myself often left thinking “where is the science” when I read the ‘Economic Science’ pieces here.

    • A couple points.

      1. My specific editorial direction here at Dismal has been to avoid any posts that require too much technical apparatus to understand. I aggregate posts from a half-dozen different feeds, one of which is my own feed, and select the ones that are broadly accessible. I suspect some of the “where is the science” is in the posts that show up in the source blogs but don’t make it here. For example, the series of posts on technical aspects of loan-to-value regulation I ran last year was probably a mistake on my part here – too dense, and likely only of interest to specialists. Similarly, some posts that I don’t bring over here just require too much background economics to make them comprehensible: they’re posts that the economists at the source feeds write for other economists where we’re all speaking a common language. I then have three options: provide all of introductory and intermediate micro and macro on Dismal, so that everybody’s on the same page about why specific background assumptions have been made; put them up as-is and watch my authors get dragged into comment wars where folks question every assumption in the background models (so we’re effectively back to having to teach all of intro and intermediate micro/macro, except in comment wars on every post; or, just not put up those posts. For more technical goodness, hit especially the stuff Donal’s been doing on regulatory econ over at his blog, and TVHE for macroeconomics.

      2. The poverty of thinking on the NZ left has been an ongoing concern at Offsetting, and you’re right that I should I linked this prior post. . Australia is lucky to have some pretty seriously good policy thinking on the left. I can disagree with a lot of it, but it’s closer to the efficiency-frontier: given the values of Andrew Leigh, or Matt Cowgill, they’re typically advocating policies that are the most effective and least costly ways of getting there. I wish we had people of that calibre here. Here, we get knee-jerk partisan opposition even to policies that should improve outcomes from the perspective of the person giving the partisan opposition. Re-jigging social housing to sell off existing homes, use the proceeds for housing in more appropriate locations, and to provide funding allowing social housing tenants to access private rental accommodation: that set will not reduce access to social housing among those in need of it and is rather very likely to improve access. Since it does not involve the destruction of houses, it cannot worsen the housing crisis: the housing crisis is caused entirely by the gap between the number of existing houses and the number of households wanting to live in houses. This means that the policy cannot substantially affect the housing crisis in the aggregate, but better matching of people to houses of appropriate sizes and locations will improve outcomes. The shortage is largely caused by too-rigid land use planning, as both Bill English and Matt Cowgill explained very well. The left in Australia GETS that the fundamental problem in housing is caused by land use planning. Sadly, too many on the Oz right are just plain dumb: Joe Hockey was talking up the merits of increasing wealth as measured by house price appreciation. Bill English and Matt Cowgill, utterly opposite sides of the left-right divide, are saying exactly the same thing about housing. I’d figured that the contrast between Bill English’s thoughtful discussion about social housing, and Helen Kelly’s “He’d sell his own grandmother”, made it pretty self-substantiating. I had reckoned that explaining exactly why it was idiotic was 1) superfluous; 2) a beat-up

  • re 1, you’re missing my point. (I hope you’re not avoiding it!) I’m not saying the science content has been reduced, I’m failing to see any science at all. Many of the pieces read as straight opinion pieces; ‘I think this’, but—as far as I can tell—no background, no justification, no pointing to supporting evidence, etc. At least that’s how they read to me (and I suspect to others). Don’t get me wrong, political commentary has it’s place: I’m just querying where is the science.

    To my reading you’re also overworking the excuse. Every science communicator — that includes me — has to grapple with the background issue. I’ve written on the 3-D structure of genomes, for example. In fact, every time I write presenting what new science paper reports is like that.

    The solution isn’t “drop all the science”. (Sure, the background is a challenge, but is avoiding the challenge the solution?) Contrast viewing filtering as ‘save the reader’ v. ‘not communicated well enough’, etc.

    re 2 – best as I can see you’re avoiding my criticism (i.e. which stands).

    re your remarks about the comparison of English and Kelly, to my reading this comparison has many issues (i.e. logic flaws), starting with trying to argue English’s remarks are “thoughtful discussion” and Kelly’s not — her’s is a tweet for goodness sakes, she doesn’t have space to write a discussion at all for one thing. I could go on, but the gist is the comparison looks like holding up something horribly close to a false equivalence for the sake of rallying at something. It looks to me like that you could even have left Kelly out entirely and simply explained the issue at hand instead. But JMHO and all.

  • “I’d figured that the contrast between Bill English’s thoughtful discussion about social housing, and Helen Kelly’s “He’d sell his own grandmother”, made it pretty self-substantiating.”

    It’s an unfair contrast, as Grant has pointed out ie you are guilty of false equivalence. Bill English’s piece was a lengthy discussion, whereas Helen Kelly’s comment was a tweet!

    • That her tweet summary of English’s thoughtful discussion was “He’s selling all the houses, he’d sell his own granny” points to her general failure to understand anything about housing policy.

  • Critique, not a ‘complaint’ 😉

    “in this post, or in the whole feed”

    Both really. (Sorry if my early comments didn’t made that clear, I thought they did.)

    I don’t think you’re getting my communication point (seeing you’re responded treating it as a ‘complaint’). Perhaps you might see one aspect of it through parallel example to how you’ve written the last sentence of your post above and your latest comment. (This is over-simplified, sorry; I’m after the communication aspects, not the specifics of this particular example.)

    Compare with how I could respond to learning that Ken Ring apparently (I’m told by others) ‘forecast’ for the last few days (among other things!),

    “… Especially when Pluto is blocking out the Sun”

    You could respond, “Pure idiocy. Why oh why is he so freaking dumb.”

    You well say he is an idiot for that one, but there’s no science communication in doing that, just a gob of mud thrown his way.

    In a sense it’s shop talk: those that already know what is the problem would fill in the blanks suitably. Leaving aside the ad hominem aspect, in directing it at the person, we’d be expecting everyone to ‘just know’ the background needed to know why it’s an idiotic thing to suggest, or be thinking it’s self-evident.

    The sci comm thing to do, to my mind, would be to use it as an opportunity to explain why the idea of Pluto blocking the Sun is silly and while we’re at it use it as an excuse to say a little more about Pluto, the effect of other planets on the Earth or whatever else. In explaining you also shift the focus from just tossing mud at the person. (But note how they can now be shown to be silly, if that’s truly the case.)

    I hope you can see the parallel I’m drawing – I could take it further but I hope you can see what I’m trying to say.