During question time in Parliament last week, Minister for Housing Phil Twyford confirmed under question by National's Housing spokesperson Judith Collins that the government has bailed out Winton, the developer behind Northlake, by buying the unsold KiwiBuild houses that failed to sell as part of their underwriting scheme. Winton has already removed the properties from their website—the houses are now the government’s problem.
Despite this district almost breaking at the seams with acute accommodation shortages, the failure of Northlake’s KiwiBuild has come as no surprise to some. Opinions from a variety of commentators have said they were overpriced and not fit-for-purpose for families. At 76sqm, the footprint was the same as an inner city apartment in Auckland, but KiwiBuild apartments in central Auckland are selling for around $200k less than Wanaka.
Jacqui Dean, MP for Waitaki says, “I believe the houses failed to sell because they were far too expensive for Wanaka families and were clearly not fit for purpose. The homes do not have garages, a necessity for family storage and are very small, with little outside space for children, a vegetable garden or a clothes line.
“I also note in the cabinet papers released to me that prior to the KiwiBuild project proceeding, interest from Wanaka homebuyers was remarkably low. In Hamilton the KiwiBuild project had 4850 people register interest, in Queenstown 2854, but in Wanaka just 139 – and yet the government still decided to proceed in signing an agreement with developers to build 211 homes there and to underwrite the deal.”
Dean recently visited one of the two-bedroom properties at 43 Glen Dene Crescent and says she was shocked and dismayed that the government could ever imagine this house was suitable for a family.
“The Wanaka KiwiBuild homes are an example of taxpayers paying the price for a lazy government. Housing Minister Phil Twyford clearly did not do the research and check whether these homes would meet the needs of the market, or indeed whether there was interest from people in buying the properties. His laziness has meant taxpayers are now footing the bill for homes that no one wants. What’s worse, there are another 200 homes being built and even more taxpayer money will be put at risk.”
So what happens now? “There’s no telling what government will do with these KiwiBuild properties next. If these homes are sold cheaper than what they were originally marketed for, then the taxpayer will be losing out again, as it will be taxpayer money that is subsiding these homes for KiwiBuild buyers. The only person winning in that kind of scenario will be the developer, not young families in the Upper Clutha.”
Dean says she is well aware of the low salaries in Wanaka and the difficulty for low-income families to enter one of the most expensive districts in the country.
“It is clear the KiwiBuild model is not working in Wanaka. There are ten houses built, and only six have sold, despite the homes being on the market for a number of months now. If the government had built homes that met the needs of Wanaka families and at the right price, then those homes would have sold. It’s clear the Minister has really missed the mark in the type of homes built and the cost of these homes.
“The homes were marketed as ‘living the Wanaka lifestyle in an architecturally designed and affordable KiwiBuild home.’ This sadly shows how out-of-touch the government was, because for the many families desperate for their own home, lifestyle and architecture have very little to do with putting a roof over their heads.”
The failure of KiwiBuild in Northlake raises concern over the 400 houses planned for the Hawea Special Housing Area. The SHA received support from Queenstown Lakes Community Housing Trust (QLCHT) due to the high number of people waiting for home on their books. Julie Scott, CEO of QLCHT believes Northlake’s KiwiBuild and Universal Development’s SHA should not be put in the same category. Like Dean, Scott believes the price point for Northlake was too high and also said “It would appear [Northlake’s] price does not support the underlying value.”
Scott continues, “The proposed entry-level pricing for Hawea SHA homes was significantly less than the Northlake KiwiBuild homes. [Also] when QLCHT receives and develops the 40 sections from the Hawea SHA, these will not be sold at market value. They will be sold either under our new assisted ownership programme, Secure Home, or retained in perpetuity as affordable rentals. The nearly 600 households on our waiting list cannot afford to purchase a $650,000 property on their own.”
Dean also believes the proposed Hawea SHA has significant differences from KiwiBuild: “I am also very impressed with a pioneering new pilot scheme, Secure Home. This scheme aims to address housing affordability in the district by allowing people to purchase a house through a 100-year lease arrangement, with the Trust retaining ownership of the land in perpetuity. This may be a more affordable option and one that could work well in Wanaka. However, the government’s KiwiBuild scheme is destined to continue to falter.”
Winton could not be reached for comment.