In today's email we previewed the report into the housing crisis due out this morning.
1. Housing crisis stock-take due
Housing Minister Phil Twyford is due to release a report into the homelessness crisis this morning that is expected to show 80 percent of people arriving at community emergency housing were turned away last year because of a massive shortage of housing.
Twyford commissioned the housing stock-take in late November last year from Shamubeel Eaqub, Philippa Howden-Chapman, and Alan Johnson, saying he wanted an independent stock-take, given the previous Government had refused to accept its own officials' reports on the scale of the crisis.
"This report will provide an authoritative picture of the state of housing in New Zealand today, drawing on the best data available. It will put firm figures on homelessness, the state of the rental market, the decline of homeownership, and other factors in the housing crisis," Twyford said at the time.
The report is expected to focus on the 'hidden homeless', which measures those 'floating' between permanent homes. They are categorised as living in temporary housing, sharing with another household, or living in uninhabitable places.
A useful primer for this report by the Auckland Mayoral Housing Taskforce, which was published in June last year. I facilitated the discussion sessions for the report. Shamubeel Eaqub was one of the members of the taskforce. The chart above is from the report and shows the gap between housing supply and household demand in Auckland since the mid-1990s.
The report is due out at 10 am. We will publish our report on that soon after 10 am on Newsroom Pro.
2. Congestion charging coming
Newsroom's Tim Murphy reports that the Auckland Council will formally consider a report tomorrow into the prospect of congestion charging.
Auckland peak hour traffic congestion has grown by a third in just three years, reinforcing the need for a form of congestion pricing to reduce the number of vehicles on the city's roads.
The report recommends the Council takes the next step to advance charging for use of the roads and says motorists need to allow around 50 percent longer for each journey to be assured of arriving at destinations on time.
Even with a road-building programme, congestion would worsen in Auckland unless pricing is introduced, otherwise traffic volumes could delay motorists by a further 30 percent longer than during peak hours now and up to 50 percent longer during the day.
Total daily vehicle trips in Auckland are projected to rise from 5.4 million to 7.8 million in the next 30 years, with the distance travelled by the private vehicles set to rise by half in that time.
A study of international examples of congestion pricing says automatic number plate recognition technology is likely to be Auckland's best immediate answer but a step-by-step rather than universal city scheme is recommended.
3. Chart of the day: A massive gap
This chart I(above) from Shamubeel Eaqub's Sense Partners consultancy was published in the Auckland Mayoral Taskforce report and shows just how poorly New Zealand has done at building houses in the last 30 years, relative to our own performance in the previous 50 years.
The chart measures the number of housing consents per head of population.
It shows a variation around seven consents per 1,000 people in the pre-war years with a pick-up just before the war as the first Labour Government's state house building programme ramped up from 1937 onwards.
It then dropped sharply during the war, before ramping up to an average of around nine per 1,000 between the end of the war and the late 1970s. This was under Governments of both colours and was due to various surges of state house building, including one when the Kirk Government was elected in 1972.
Both National and Labour Governments saw the provision and subsidisation of house building as a key role of the state. Cheap loans were offered to first home buyers of new homes and parents could capitalise their child benefits to build a deposit.
The Government also underwrote the development of privately built housing suburbs and used the Ministry of Works to help plan and pay for the infrastructure to these suburbs. The Government also specified the building of simple and relatively cheap houses in these suburbs through its Group Building scheme.
State house building collapsed in the late 1970s and then the reforms of the mid 1980s to late 1990s saw the removal of the cheap loans and the subsidies from central Government for house building.
The rate of house building then fell to under five per 1,000 from the early 1980s to 2016, with the rate collapsing during the Global Financial Crisis to lower than it was in 1942, when New Zealand felt at threat of invasion, and during the middle of the Great Depression.
It has since recovered to around six per 1,000, but in per-capita terms is far from the record building boom portrayed last year and is currently no higher than it was just as the second world war was ending.
Eaqub estimated that the combined shortfall of housing after the 30 years of under-building was around 500,000.
4. Briefly in our political economy...
Fast track? - Greater Christchurch Regeneration Minister Megan Woods announced on Friday she had instructed officials to work with Council and local experts on fast-tracking detailed work on the shape and cost of the Christchurch stadium that can be turned into a completed business case. She said an initial report on the prospect of co-locating the stadium with the Multi-Sport Facility showed more work was needed.
Another delay - Fletcher Building announced this morning it wanted an extension to its two-day trading halt on the NZX because it was still working on its announcement of further losses in its Buildings and Interiors unit. It said the trading halt may last until Wednesday, when it is due to release its full results for the first half of the financial year.
5. Briefly in the global political economy...
Deficit explosion - The US Congress agreed on Saturday to spending increases and tax cuts that will increase budget deficits by more than US$1 trillion. The US 10 year bond yield edged up 3 basis points to 2.85 percent as investor fears about inflation mounted, driving stocks lower again. (Reuters)
6. Coming up...
Housing Minister Phil Twyford is due to release the Housing Stock Take report outlined above at 10 am today.
In the first official measure of retail sales in 2018, Electronic Card Transaction figures for January are due to be published at 10:45am. ANZ is scheduled to release the first indication of price inflation data for January with its monthly inflation gauge at 1pm.
The Green Party is due to announce the final list of nominations for the contest for its Co-Leadership later today.
Prime Minister Jacinda Ardern is expected to hold a post-cabinet news conference in Wellington at 4 pm today.
Parliament resumes on Tuesday.
Food Price Index data for January is due on Wednesday. Guest nights data for January is due on Thursday.
7. One fun thing...
This Rob Rogers cartoon published on Twitter captured the disbelief around the scale of the US deficit increase agreed over the weekend.
8. This morning's political links
These are available in the morning subscriber email.