Colonisation, capitalism and the housing crisis

Hone Harawira, facing arrest for defending public housing at Glen Innes.

Hone Harawira, facing arrest for defending public housing at Glen Innes.

Ben Jacobs, Fightback (Wellington).

Housing is in crisis. Decades of market-based policies have decimated the social housing stock, and the market is failing to provide affordable housing. After all, housing is a necessity, not a luxury good – letting the intersection of supply and demand determine prices serves only to deny housing to those who can’t afford it.

Social attitudes to housing – and successive government policies – have roots in Aotearoa/New Zealand’s colonial history. The value placed on land by the British Crown and its representatives is evidenced by the lengths they were prepared to go to in order to obtain it: aggressive deception, in the case of the Kemp purchase, or outright theft by means of punitive confiscation throughout the North Island. Such value was determined in part by the sales pitch that was made to colonials, that only in New Zealand would they have the opportunity to own their own property. This was the birth of the quarter-acre dream.

The modern equivalent of this propaganda can be evidenced in the cornucopia of house and garden magazines, home development TV shows, and extensive media coverage given over to the concerns of the minority of New Zealanders that own their own home and can afford to invest in its beautification.

At the other end of the spectrum, discourse regarding homelessness has been blaming and paternalistic – in the case of Wellington’s recent Alternative Giving scheme – and aggressive in the case of Auckland council’s proposed Nuisance Begging bylaw and the deployment of security guards to move homeless people “along” during APEC and the Rugby World Cup.

This capitalist propaganda comes against a background of declining real wages – workers’ share of New Zealand’s Gross Domestic Product has been steadily declining since the 1970s, forcing prospective home-owners to become increasingly indebted for life in order to achieve their dream of home “ownership”.

Workers share of Gross Domestic Product. Source: Bill Rosenberg, CTU (2010)

Workers share of Gross Domestic Product. Source: Bill Rosenberg, CTU (2010)


household debt

Household debt ($M). Source: Reserve Bank of New Zealand

Credit from banks flows easily on the assumption that they can just claim back the house if the borrower can’t meet the payments, and that house values won’t drop. But based on the capitalist model of supply and demand, this effectively pushes house prices up, encouraging the development of more profitable, more luxurious housing in exclusive subdivisions.

These upward pressures on house prices flow on to rental accommodation, Statistics New Zealand recently released a report based on census data showing a doubling in real terms of the cost rental accommodation in two decades.

Rent has doubled over the last 20 years. Source: Statistics New Zealand

Rent has doubled over the last 20 years. Source: Statistics New Zealand

But it’s not just market forces alone. Neoliberal policies introduced by the fourth labour Government in the 1980s – and carried on by National in the 90s – reduced the proportion of tenants who were renting from public sector landlords from 38% in 1986 to 18% by 2006. Further, public sector landlords, such as Housing Corp and city councils increasingly acted like private sector property developers, introducing market rates and expecting to profit from their provision of social housing. Likewise, private landlords have become more profit-hungry. In the 1980s it was relatively common for employers to provide subsidised accommodation to employees, something that is almost unheard of today.

Rightly, much media comment is made of the situation in Auckland, where a fast growing working class population is confronted by a slower housing market that is increasingly expensive. But this pattern is evident in other centres too. This month, the Porirua community newspaper the Kapi Mana led with a story State housing crisis, noting that 191 families were on the wait list for 11 available state houses in Porirua.

Opposition to the Tamaki Transformation Project in Glen Innes reached public consciousness in recent months, notably with the arrest of Mana leader Hone Harawira. After a period of false community consultation, where any intent to reduce the number of state houses was strongly denied, the project was initiated in 2011 with a reduction in the number of state houses from 156 to 78, eviction of tenants and the sale of seaside land to property developers for private housing.

Mainstream political parties have responded to the crisis. Predictably, Labour and National ignore the economic and political reality. Labour recently announced plans to subsidise the development of a large number of “affordable” homes, initially costing $300,000. This presents an excellent opportunity for speculators, as these will be houses for private sale. But it was their proposed policy of restricting investment in property to “New Zealanders” that got most attention, on the left anyway. Blaming “the foreigners” for the failings of their own market-friendly policies betrays Labour as a capitalist party that would rather introduce racist policies than dare to appear remotely socialist. Interestingly Australian investors would not be denied access under Labour’s proposed policy – apparently they are not the bad kind of foreigner.

National are predictably letting the provision of social housing deteriorate even further, and just as predictably, don’t seem to care. This year’s budget handed more responsibility for the provision of social housing to community organisations – not necessarily a bad thing in itself – but it is apparent that these organisations will be so poorly funded that the number of homes is expected to decrease as a result. National’s election promises in respect of social housing focussed more on “moving along” the unworthy poor from state homes and replacing them with more worthy tenants.

Mana’s housing policy priorities explicitly address some of the causes of the housing crisis, acknowledging the effects of colonialism on Maori home ownership, and seeking to address homelessness. Mana policy development seems to derive from the struggle for transformative reforms, and as such, demand the attention and qualified support of socialists. Unfortunately, these policies also attracted the attention of the founders and Facebook friends of the so-called Pakeha Party, whose deliberate historical ignorance wilfully construed such policies as reverse racism. Of course the Pakeha Party has quickly become a bizarre parody of itself, but in its heyday it did attract a large number of followers. Socialists must struggle not only for public housing, but against widespread confusion as to the causes of disenfranchisement (hint: it’s not foreigners or Maori).


  1. It’s the 1%.

  2. it’s partly 2% which is the target that the reserve bank has for inflation. It creates inflation by expanding money supply. In america, england and japan they print money directly for this purpose but in NZ we use the banks with fractional banking to generate the extra money. This extra money is created by increasing debt with house mortgages being thought of as the safest.

    The result of this is that housing debt is the “safest” debt a bank can create so it is in this sector that inflation is created the most.

    Unfortunately if NZ stopped this target our interest rates would be higher and our dollar a lot higher because america, england and japan are just debasing their currency by straight printing and creating more government debt but allowing those with access to cheap money to buy assets.

    The best way for this to end will be a collapse of the monetary system but short of that the only way to create cheap housing would be for the government to step in and build on mass with cheap imported labour ironically to prevent an inflation.


    • Ben Ritchie says:

      Cheers RossC, some good points about the economic drivers, thanks. I agree with you, that the best way to address the need for housing is an end to monetarism ( I’d prefer an end to capitalism altogether of course!) I question why you think any government building scheme would be predicated on exploiting migrant workers though?

  3. Another new housing policy of the present government is that the “assessment of people’s housing needs will shift from Housing New Zealand to the Ministry of Social Development in April 2014”. This is a reactionary policy, as it will increase the social policing and surveillance of beneficiaries and state housing tenants.

%d bloggers like this: