The Housing Crisis is a Middle Class Crisis

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Vanessa Cole
June 14, 2015
This [redevelopment] has not solved the housing crisis or eased the crisis for low-income tenants in the community.
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Moving the housing stock into a private social housing market is not a solution.


In 1872 Friedrich Engels wrote that the housing crisis - a crisis that impacts most severely on the poor - is discussed in the press only at times where it impacts upon the middle-class. When the government discusses the housing crisis, they are discussing a crisis of affordability for those that already have some access to the market.

You only have to walk down Queen Street to know that homelessness has increased, and this is the visible housing poverty - then there are those sleeping in cars, in overcrowded spaces, on couches. All the while, state houses sit empty in suburbs such as Glen Innes, where tenants have been evicted and developers are waiting to capitalise on increasing land values.

In Auckland, the Government and Auckland Council have joined together to free up land supply for the building of so-called affordable housing. This has involved the removal of state housing from areas such as Tāmaki and the selling of state land to private property developers in order to solve the crisis in housing supply. This has resulted in the eviction of state housing tenants on the basis that more houses can be built on existing land.

This, however, has not solved the housing crisis or eased the crisis for low-income tenants in the community, nor resulted in the building of affordable housing for middle New Zealand. In Glen Innes CV land values have increased from $400,000 to over $700,000 since plans to redevelop the area began in 2011.

The argument that increasing supply drives down housing prices does not hold up. The idea that the market has an invisible hand that balances out shortcomings has never held up through history. This market-based logic has led to an increase in housing prices and unaffordability. It will drive up house prices and rent costs in other areas too. But this neoliberal logic is powerful and enables the government to sell once publicly-owned land in Auckland to private developers.

In a low-wage economy with surplus unemployment, and where solutions are market-based, the cost of living is going to continue being unaffordable. The process of investing capital into the built environment is seen as a way of stabilising the market to avoid crises, however this so-called solution is the very cause of crises.

As the housing crisis is discussed more in mainstream media, the government has started responding. The way the housing crisis is framed is in terms of facilitating an increase in homeownership for the middle-class. We are told by the government, to the disbelief of most, that affordability in Auckland is a house costing $500,000. Likewise, Labour and the Greens frame affordability as when a house can be bought for $3-400,000. How many young parents on minimum wage, or those unemployed or underemployed can afford that?

The new rules around taxing secondary houses directed at property speculators is an attempt at silencing the frustrations people have over property speculation. This too is a problem and solution framed around the frustrations of the middle-class who can no longer buy their first house.

Again we are distracted into ignoring the poor. 1 in 120 New Zealanders are homeless. Hundreds of state housing tenants are being evicted with 90 day notices, included in them the elderly, disabled, sick or those with disabled or sick children. Thousands of state houses are being transferred out of public ownership into private companies like the Tāmaki Redevelopment Company.

Selling off state housing in communities in Auckland, Napier, Wellington, Tauranga and Invercargill, or moving the housing stock into a private social housing market is not a solution. This, instead, has lead to an increase in land values and the displacement of low-income tenants from their communities into precarious and transient housing.

The National government does not want to solve the housing crisis for those it impacts the most. The solutions presented to us around land supply and taxing mask the contradictions of current housing policy with denial, so that the rich can continue to profit from poverty.

The crisis is inherent in the capitalist system this country operates within. The so-called experts that run this country do not have the solutions. We need solutions that exist outside the dominant discourse and from the voices of those impacted most by the housing crisis.

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