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A sad dad in Berhampore

by James Barber
When this government ruled out a capital gain tax in 2019, I was in tears the next day. We had moved three times to three different flats in Newtown in the two and a half years my daughter had been alive and it felt as though an underclass was developing, a generation which would be stuck in rental housing their entire lives.

We considered moving to Christchurch for affordable housing but I grew up here, our kid’s whenua is buried here and I couldn’t face it.

Thankfully we got lucky. Our wider family gave us a heap of cash and we managed to buy a one bedroom apartment in Berhampore. We moved into our 45 square metres two months before we had our second child. We are now a family of four living in a one bedroom apartment in Berhampore. In my generation we are now the lucky ones who will accrue tax free capital gain while the rest of my friends pay a landlord through the nose for a roof over their heads.

The current framing of the Spatial Plan is deeply upsetting. Most of the people upset by the plan are people with houses I would love to live in with my kids, but we don’t have the money. They complain about losing character and sunlight because of council bureaucrats. One person even accuses the council of fanning a renters versus landlords divide and a generational divide.

For those who think that way I have news for you, these divides exist. If you are in my generation or later, born from the 1980s onwards, it is pretty much impossible to buy a house.

The only method friends have managed to use to buy a home is by being given family cash. One of the reasons is house prices of course – just down the road some developers bought a property and did it up, subdivided and sold it for a killing after lockdown. Those who can afford to buy these days are those who already own property.

Another reason is the rental market of course. These days you are lucky if you can afford to live in Wellington as a renter. Particularly if you have a family.

A rental down the road has become available and it costs $700 per week, and that is cheap. If you are earning a decent wage, say $50,000 or $60,000 a year, most of your earnings will be spent in rent. No chance of buying there.

Some friends with kids have moved out to the furthest possible parts of the Hutt Valley to afford rent. Others have moved into a tiny house with their kid. One family of four we are friends with are considering moving into a house truck as a way to find a home.

With all of this in mind, I find the complaints from We Are Newtown and the Newtown Residents Association deeply offensive. I’ve lived in this city my whole life and do feel a deep connection with it. I get that character is important. I get that sunlight is important. But surely affordable homes for people who need them are more important?

The Newtown Residents’ Association has put forward an alternative. It is better than the status quo but it doesn’t provide enough houses. They even include existing council housing stock in their “solution.” They dispute the council’s growth projections which is a totally debatable point, but they don’t acknowledge the real housing injustice which exists today.

Suburbs like Newtown are becoming increasingly unaffordable for many families in my generation. This isn’t the fault of everyone who owns a house or rents one out of course. It is a structural problem which requires a structural solution. The Council’s proposed spatial plan is an attempt at this.

It is of course not a holistic solution to the problem, but this does not mean that you throw the whole thing out. Of course we should not trust property developers and the market to provide affordable housing. They haven’t done this so far, so we know that we can’t rely on them. The council should be pushing the government to provide more affordable housing and it should be building more itself. The government could also legislate building controls.

For the last few months we had a rent freeze. This reminds us all that the government can use its powers for the benefit of the many New Zealanders in need of affordable housing. They should introduce legislation to make developers build affordable apartments rather than luxury condos.

Huge areas of land in Wellington have been sitting undeveloped. The TipTop factory in Newtown and the former Boys and Girls Institute on Tasman Street in Mount Cook are two excellent examples. These vacant spaces ought to be developed for affordable housing.

The final point is climate change. We can’t keep building out. We need to create a city where people can not only walk and bus and bicycle easily to get where they need to go but also can live in strong communities in which people have connections. If we keep having urban sprawl, our motorways will keep being clogged by cars. We need to build up so people can live in accessible walkable areas.

Here we have a real option for Wellington to deal with the dual problems of housing and climate change at the same time. Let’s bloody take it!

In my opinion those campaigning against the plan should be campaigning against the new greenfields developments which continue sprawl – more little boxes on the hillside (although these days they’re more like giant mansions on the hillside). They should also be campaigning for state and council controls for affordable homes and a denser and more connected city. No property should sit empty for someone’s speculative profit. There needs to be more council and state building of affordable homes and there needs to be controls to force the private sector to provide affordable homes. The great thing is that the government and councils can actually deal with these problems.

However the debate goes, my family still owns a home. We will somehow make a tiny space work. We will keep up with our repayments. We’ve done it so far. This is largely thanks to the generosity of our parents and a healthy dose of white middle class privilege. To quote so many people, “we’re on the ladder.” I do worry however about my other friends, and everyone else, who have not bought a property yet and it looks like they may never be able to. A friend told me yesterday that her rent is going up this month with the freeze ending. I really hope those reading this who are concerned about six story apartments blocking their sunlight will give a thought for the people who might be living in them.

24 comments:

  1. Freak Shake, 29. September 2020, 11:48

    I agree about the Tip Top factory and Tasman Street, but they’re set to become a retirement village and the Chinese embassy. Talk about a wasted opportunity.

     
  2. groggy, 29. September 2020, 12:15

    My kids who were born in the 90’s have managed to buy houses in the past 18 months without any financial help, and so have many of their friends/peers. I didn’t own a house when I was their age – or when we first had them, and I was well aware and acknowledge that was down to my life & financial choices. It wasn’t anyone else’s fault or responsibility.

     
  3. TrevorH, 29. September 2020, 12:54

    The only way to tackle the problem is to greatly increase the supply of new houses but the Resource Management Act and the bureaucracies which enforce it stand squarely in the way of progress.

     
  4. Ben Schrader, 29. September 2020, 13:30

    Thanks for sharing your story James. It’s presently a very hard environment to buy a house in let alone rent something that is half decent and affordable.

    I know this issue is very complex with no easy answers, but I agree that one of them would be for the state to become more involved in housing provision. Kāinga Ora (formerly Housing NZ) now has powers to buy and redevelop urban land for social housing and will be doing more of this in Wellington soon. But maybe the state should also be more involved in buying carefully-selected brownfield sites and working with developers to build affordable housing for homebuyers too. If this means subsiding home purchasers – in the way the state did for much of the 20th century – this could be introduced as well. It may be the costs of such subsidies end up being less than the huge socio-economic costs of continuing to ‘under-house’ so many New Zealanders.

     
  5. The Orgone Accumulator, 29. September 2020, 15:02

    Groggy, are you saying that for the half of the NZ population that rents, it is their own fault? I find that a bit of a stretch.

     
  6. Pedge, 29. September 2020, 15:04

    Thanks for a well written story James.
    There is something I would like to add as a second year architecture student. This doesn’t mean my opinion is of any greater importance than anyone else, but I do have a view that many others seem to lack. Why do the vast majority of comments assume that no one wants to live in an apartment or that any new developments are inherently bad or of poor quality? My view of the architecture industry in NZ is of amazing quality, passion and expertise. Maybe the architectural profession is failing to inspire people, but the industry cares deeply about cultural context and heritage. We should demand better for our built environment, and have some optimism about the future. Change is the only constant in a city, we should embrace it, not be scared.

     
  7. Amy, 29. September 2020, 15:17

    Thank you James. Reading this story and receiving a flyer in the letterbox today which outlined the positive intent behind WCC’s spatial plan in response to the alarmist notices being plastered all over Mount Victoria by the residents association have made me feel slightly better that there are indeed people who care about our future generations and the future of our city.

     
  8. Claire, 29. September 2020, 15:53

    Everyone knows we need more housing. This was made a real problem with the massive immigrant intake during the Key years. But intergenerational squabbling is not the way. You don’t knock down parts of suburbs to put up another high rise suburb. As mentioned before, a lot of people don’t want to pay the insurance or be in a big shake in a high rise. This plan is ham-fisted, very broad and trying to copy Auckland. Obviously very different cities geographically.
    Every generation has done it tough when buying a house. In mine, interest rates were 10 to 20% in the eighties and nineties – in some cases half your income. Also banks were not keen to lend to women on their own.
    I have three lots of neighbours who have bought houses in Newtown in the last few years – they are in their early thirties. Two by themselves. So it can be done. And yes some people get help. Or stay at home and save. People are not all going to live in the city, because there isn’t room for everyone. That’s why there are train lines and bus routes. And Transmission Gully.
    Some lower rise very well designed apartments of three storeys would be great. Or Govt strong arming land on Adelaide Road, you could put ten or so big blocks there. But the Govt will have to build them to be affordable, as they did with state houses many years ago.

     
  9. BParker, 29. September 2020, 17:50

    Well done for getting on the property ladder, but I do hope your apartment is not one of the many badly-built ‘leaky’ complexes, or is subject to MBIE’s earthquake-prone extortion. Both these government-caused problems should give major pause to anyone considering buying an apartment in Wellington (or anywhere else).

     
  10. Paul, 29. September 2020, 22:36

    There are cheaper suburbs than Berhampore if you want to live somewhere bigger than a 1 bed apartment.

     
  11. michael, 30. September 2020, 9:35

    Why should everyone who wants to, expect it is their right to live in the city. When we started out, we lived out in the suburbs and many of us had 2 jobs to save for our deposit on a house. We had second-hand furniture, never went out or away on holiday. Then, over the years worked towards moving into the city (if that was our desire). So think about that instead of constantly criticising us.

     
  12. Catherine, 1. October 2020, 18:30

    Great article that highlights the problem. There’s a real lack of compassion from a lot of the comments here not to mention an outright rejection of the fact it is substantially harder to buy now than it was “back in my day”, a fact acknowledged by all political parties, the Treasury, independent economists etc.

    To the asorted NIMBY/boomer commenters above: you weren’t harder working or cleverer or more frugal than people today are – you just got really lucky. You bought at a time when houses cost 3x your salary not 11x. Please have some compassion for people poorer and younger than yourself.

     
  13. Julienz, 1. October 2020, 20:40

    @Catherine – point taken and absolutely accepted. My concern is that this plan will destroy Wellington as we know it but not solve the problem of housing affordabilty because there are a so many more policy levers that need to be pulled. I am starting to feel that successive governments have let things get so out of control that we now need a massive building programme by the state, a slow down on immigration, and dare I say it a tax on gains made from housing sales. Us baby boomers are going to have to accept that the paper gain we think we have made on our houses is not money in the bank. I can’t see wages going up so house prices will have to be forced down.

     
  14. Claire, 1. October 2020, 21:17

    Catherine here is a really good article on just those points you make. Ashley Church goes through the decades in Nz on home ownership, and how all generations had differing issues and toughness to their situation.
    It does you no credit to call people boomers or Nimbys which I am not. But they may be your parents. The boomers at least.

     
  15. Dave B (Wellington), 1. October 2020, 21:32

    As former landlords for nearly 30 years, my wife and I owned a 2-flat property in Mt Cook. We bought it in the early 1990’s during a property slump. The previous owner had just done it up and wanted his money out. Over the years we tried very hard to keep it in above-average condition and intentionally kept the rent to the lower-end of the spectrum in the hope of getting good, stable tenants who would stay as long as possible. Changing tenants and tidying-up after them can be hard work when you are doing it all yourself and already have a busy life. I would say the average length-of-tenancy was 2 years. A few stayed 4+ and quite a few moved on after only a year. Some left to move into places of their own so it was nice to feel we maybe helped them on their way by not fleecing them with the rent. Most tenants were average-to-good, and a few we were glad to see go, but we never forced anybody out. Dialogue and sensitivity generally fixed most issues.

    But eventually our energy for continuing with this ran out. Over and over having to remediate damage or degradation caused even by good tenants became wearying. Repeated call-outs to solve problems of tenants’ own making got tedious (maybe we were just too conscientious), and the growing list of legalities being heaped on landlords became onerous. During a period of vacancy with no tenants in either flat and significant repairs having been completed yet again, we sold up. Someone else’s turn.

     
  16. Paul, 1. October 2020, 22:12

    @Catherine – yes houses are more expensive, although interest rates are much lower. James seems to want it all though – you can have cheap, you can have a great location and you can have big. James has picked the first two. If he wants to swap location for big, there are less desirable suburbs location wise where he can do that.

    Zoning changes are just going to create more 1 and 2 bedroom apartments, and push the price of detached houses up if anything as they become more scarce. That works for people who want to live in apartments, but not James so I don’t really see his point.

     
  17. James, 2. October 2020, 10:49

    Kia ora everyone. A very interesting debate raging here it seems. For the record, we would absolutely love to afford to live in the two bedroom apartment across the road from the Newtown library but they are crazy pricey.

    Just building apartments by itself is of course not the answer as I wrote in my piece. There need to be additional controls by state and council.

    My father bought his first home for $40,000 in the 1980s when he was in his early twenties. It was in Lyall Bay and had two bedrooms with a little backyard and front yard. Admittedly there has been inflation, but we paid $295,000 for our one bedroom in Berhampore. That price increase is much more than inflation. There is an injustice here and moving out to the far suburbs where you need a car to get pretty much anywhere is not a sustainable or fair solution.

     
  18. James, 2. October 2020, 11:38

    I think the one other thing which needs to be remembered when reading this piece is that my family are actually some of the lucky ones. This is because the housing market is so profoundly messed up at the moment.

     
  19. British Racing Green, 2. October 2020, 11:45

    James, why don’t you rent out your apartment. Sounds like the rent would more than cover your mortgage? Use your equity and the apartment as security to look at a bigger place?

     
  20. Claire, 2. October 2020, 11:58

    James thanks for your article. You did very well buying at $300,000 anywhere in Wellington. Well done. Yes your Dad probably had high interest rates on his Lyall Bay house also, even though it sounds cheap.
    I think the only answer is Govt built housing. And it may have to spread out a bit. With some big blocks in Adelaide Road. And some good design lower rise in inner suburbs. The other thing is we all need to look out for each other. Some of these thing being proposed are very authoritarian ie removing protection for housing. And jamming big blocks next to small cottages.

     
  21. Catherine, 2. October 2020, 13:43

    Completely agree that spatial plan isn’t a silver bullet, it needs to go alongside a CGT, increased building of state housing and infrastructure that keeps pace with migration, among other initiatives. However it’s irrational to not do something that will go some way to creating more housing just because it won’t entirely resolve the housing crisis – the same thing could be said of all measures, in which case none would ever be done.

    Interest rates being higher back in the day is a bit of a red herring – yes interest rates were higher but house prices were much much lower and the problem now is that you’re competing against so many people for so few properties that most young people are effectively locked out of the market. Someone who works or studies in Wellington should be able to live in the city. Expecting everyone to move up the Kapiti Coast isn’t fair or sustainable from a climate change point of view.

    @paul James would still benefit from more housing even if it’s not the type he personally wants to live in because it means he’s not competing against as many people for the same houses.

     
  22. Local, 2. October 2020, 23:44

    Claire that’s a very good article by Ashley Church which you put up.
    I am recalling that for the house I bought in 1985 I had to have two mortgages at 20% ( or something like that) but a condition before I could get the second one was that I had to redo all the piles, regardless of their state……

    My over-100-year-old house is still standing… and now housing four young people whose rent is about $34 a day, plus one not so young, five in all. Their shared (and individual) spaces and house are much more generous, healthy, liveable, (with windows that open, washing line outside and shared outside space), than a two bedroom apartment in a six storey building…

     
  23. Northland, 3. October 2020, 16:02

    @Claire You say: “Some of these things being proposed are very authoritarian ie removing protection for housing…”. With respect, this is not authoritarian, it is exactly the opposite, it’s libertarian. It’s allowing people the freedom to do what they want when they were previously restricted. Personally I’m on the fence on this one as I can see good pros and cons for both sides. An interesting debate. Maybe there is a compromise to be found in the middle somewhere?

     
  24. Claire, 3. October 2020, 17:03

    I think when something is imposed it is authoritarian. Yes I think the WCC should have developed the Adelaide Road area decades ago and we wouldn’t be having this drama.