The Eye of the Fish

September 5, 2019

KiwiBuild reset

The KiwiBuild “reset” has been as well anticipated as the Mueller Report – and now that the details are unveiled, its lack of any substantive detail is just as disappointing. That’s probably a clever move by Minister Megan Woods, as without any targets, she won’t be held to task if KiwiBuild creates just five houses, or five hundred, or five thousand. No target, no matter.

“KiwiBuild 2.0 will invest $400 million in progressive home ownership – like rent-to-own, or shared equity schemes – make it easier for first-home buyers by dropping deposits to 5 percent, and get rid of the asset limit for second-chance buyers.”

“However, Auckland University of Technology professor John Tookey said the details were vague at best and the reboot did not get to the crux of the problem.”

“It’s somewhat unambitious in the first instance, and in the second instance we’re still no wiser with regard to capacity growth. It’s your key constraint whatever that may be, [for example] developed land availability or skills necessary to actually deliver the goods… Capacity is what is lacking and that hasn’t been addressed in any way.”

I’m intrigued by all this and by the inability of the Government to get housing construction truly underway within the KiwiBuild banner. That’s odd, because they’re proving highly capable of building housing under the Housing NZ banner. They’ve also got a decent head of steam up with the HLC system – that’s the one that used to be Hobsonville Land Corporation and now, apparently, stands for “Housing, Land, Community.” Both HLC and HNZ are busy planning / building houses in Porirua – not sure about the Hutt or Wellington itself. As many of our readers will know, HNZ have a strict set of guidelines about how their houses are to be built, and their costs are tightly controlled.

HLC is not as well known down here in Wellington as it is in Auckland, but they too have a set of Design guidelines – presumably different, but presumably also in some ways very similar. HLC is actually a subset of HNZ – targeting “integrated communities” i.e. not just single houses, but more the entire village – houses, streets, infrastructure, and possibly some corner shops. HNZ caters for people without any money – State housing, if you want – but I’m pretty sure that the developments up in Hobsonville are not State housing, but privately owned. So is HLC doing private homes then?

Of course, the fun fact on all this is that a new agency Kainga Ora is being set up that will be a blanket over all three: HNZ, HLC, and KB itself. Are multiple layers of bureaucracy going to help things, or hinder them? You can make up your own mind on that one… But still, none of all that answers the basic question: Why do we have KiwiBuild at all, given that we have a HNZ and HLC that are already working? As can be seen from the post yesterday, Kiwibuild-backed apartments appear to be exactly the same size as non-KB apartments, but just with less sunshine and worse views (possibly down-specced a little in terms of kitchen cabinets and taps etc, but substantially exactly the same). With the Monark that we saw yesterday, it will be privately built, so there is no public input more than the offer to buy apartments and then on-sell them to KB buyers.

None of which actually creates any more houses – but what it can do, as shown in the picture above, is that it can make better use of your backyard. The house with a red roof has one house, one backyard sleepout and a whole lot of lawn to mow – next door, on a similar sized piece of land, I make it as about 8 two-bedroomed units. That’s potentially 4 times as many people on the land. That’s a good outcome: now we just need to work on the designs, because that’s a butt-ugly solution at present.

5 - 09 - 19

So much hard surfacing dedicated to cars! Even if we can’t abandon the need to drive right up to the front door the wider front driveway still seems unnecessary.

Even better yet, imagine the eight cars (if we must have them) grouped at the edge of the section, and a whole lot of shared outdoor instead of driveways everywhere.

6 - 09 - 19

Even more concerning to me is the news – same day news – that Stanley Group / Tallwood has gone bust. That’s the Stanley Group who was contracted to HNZ to make houses for them. That’s really not good news at all.
Stanley Group’s managing director Kevin Stanley is currently serving as a board member of BRANZ.

Even MORE concerning, is that Tallwood chairman Martin Udale is on the board of the Tāmaki Regeneration Company, owned jointly by the Government and Auckland Council and council-controlled organisation Panuku. Martin is a director of Panuku, as is Adrienne Young Cooper, who is also a director of HLC who are funding these projects. There is not only some awful twisted inter-company connections going on in there, but also these are the people who should be leading NZ out of the construction doldrums – the people who should know how to do this stuff properly. I know I’ve been a supporter of the use of Prefabrication for years – but this news shakes my belief to the core. How? Why? How come it has all gone so wrong?

6 - 09 - 19

It almost makes you yearn for the patriarchal days when capitalist oligarch Fletcher and Savage the socialist could sit down over a cuppa and sort it out.

6 - 09 - 19

Also in that Stanley Article

“It is understood Stanley Group got into financial trouble after it under-quoted for work with Housing New Zealand.”

I thought this was exactly the thing that the “Construction Sector Accord” which was signed in April was designed to fix….

It is really a worry if Housing NZ are going to let a contractor go to the wall for something that the government says shouldn’t be happening.

plus ça change, plus c’est la même chose

23 - 09 - 19

More on the Stanley Group crash here:

“Stanley-Tallwood liquidator cuts deal over KiwiBuild development”
23 Sep, 2019 11:08am

” The liquidator for Stanley Group and Tallwood Holdings has cut a deal with the developer of 23 KiwiBuild homes to get subbies paid out immediately.

The arrangement comes as liquidator Damien Grant’s appointment will be challenged this week by a group of creditors whose leader says they are organised and willing to fight.

A deal over developer Solutions Street’s 23 KiwiBuild homes in Auckland’s Papakura has been done to get subcontractors paid but may leave other trade creditors, such as building suppliers, questioning whether it leaves them disadvantaged as they wait for the liquidation process to progress.

Creditors’ claims in the group of companies in liquidation total more than $12 million, and there is about half a million dollars owing to staff, the first liquidator’s reports say.”