Caravan becomes full time living option for more people nowadays

A video show-and-tell and interview with Corwin Mandel popped up on Youtube a day ago. Worth watching in itself, also of interest are the, over 200 comments it garnered in little over the first 24 hours. The following text is taken from my response to one of those comments.

Aaron H above has made some good points. About 60% of people have security of housing tenure, through our current system of mortgages and freehold ownership.

But alas that leaves 40% of us as land-beggars aka peasants aka tenants, and although self-built “tiny houses” could indeed be part of the solution to high housing costs in New Zealand and elsewhere there are still problems like finding the land for your tiny house or caravan etc, (cheapest land in the Christchurch or commutable Canterbury province area will cost you $150,000 minimum, and banks won’t lend on bare land or insurance write-off houses if you intend to live there) (unless of course you’re independently wealthy anyway. Yes I’ve been to the banks and had this conversation before).

Another complication can be if a local authority or council demands $20,000 for “consents” or “building permits” etc. Some charities do great work, as best they can with the resources available. Like “Habitat for Humanity” (God Bless them) but like other similar groups, their assistance is aimed almost solely at “families” (ie people with children) so single people go to the bottom of the list, yet again. Our “housing market” is seriously broken.

In the last 35 years the minimum wage has gone up about 4-fold but Christchurch/Canterbury’s cheapest house prices have gone up about 25-fold. To put housing affordability back even close to where it was, we’d need at least the cheaper houses, to fall in price by over 80% (or the minimum wage to go up  nearly 6-fold ! ).

Our entire system of house and land ownership, and financing needs to change. Systems which artificially ration land availability and zonings, planning permissions and building permits, simply in order to drive up the prices need to change. In Auckland NZ, the situation is so bad, that often old houses are fully refurbished, just prior to demolition (because the seller wants the highest price, but the buyer only wants the land, for their new expensive house build).

We need to have entirely new systems which prevent property price speculators making  huge profits (often tax-free), we need a system where people (even those on the lowest wages) can affordably get the security of tenure that currently only comes by “owning” a place.

I’ve already suggested a new term be coined “Community Crofting” which could be that new system, a kind of lifetime lease, but with the security of tenure of freehold, without the ability to make a private profit. (Perhaps say, When someone leaves the community, or dies, their “croft” (land or house-on-land) simply goes back to the Community Crofting Association and is made available by ballot or some selection criteria to the next person on the list).

Here is a link to the item on Youtube


Brexit, Britain votes to extract itself from the EU

I write this from the point of view of a New Zealander, who has some English relatives and friends. I’ve never been anywhere further North than Australia, but hope to visit the British Isles and mainland Eurpoe, sometime. It is about 24 hours since the news broke that the “Brexit” vote has been counted and the result is “Leave” the European Union.

First let me say of the current British PM (David Cameron), I think the guy’s an idiot, and I’ll tell you why.

In England, previously, the very recent past, just a few months ago, there was a competition to name a new Royal maritime research vessel. The competition was in the form of a public poll (something similar although less formal than the recent “Brexit” voting poll). I’m unsure of the exact system, but it probably came down to a few college friends having fun on social media, Facebook, Twitter etc But somewhere someone said “hey let’s see if we can get the stupidest name we can think of, to win the poll !” You guessed it. Turns out that “Boaty McBoatface” won. This has left the maritime research authority in an unenviable situation that it is, almost if not actually and completely, legally required, to name Britain’s new flagship of maritime research, “Boaty McBoatface”.

So with this knowledge clear in the front of his mind, having only just recently occurred, why oh why oh why would David Cameron (or to use his apparent title The Honorouable David Cameron Dik HeD, why would he even have instituted a poll if he wasn’t absolutely sure to win it ?

Stuff I’ve previously read said the poll was to quieten some rumbling voices of dissent from within his own political party. Hmm, well how’s that workin’ out for ya Davey boy ?

It seems the REMAIN (in Europe) vote won out conclusively in London, Oxford and Scotland. But pretty much everywhere else in England, Wales and Northern Ireland, voted “LEAVE, Let’s bloody go mate, on yer bike as fast as !”.

I have heard it said that one major contributing reason towards many people voting for “LEAVE” was because of difficulties the UK is currently facing regarding a shortage of housing and especially a shortage of affordable housing. Especially when people see immigrants coming into an area, the immigration is then, rightly or wrongly, blamed for those housing problems.

(Here is a short quote that I have cribbed off someone’s Facebook). “… I voted out. Why? Simply because politicians had tried to force a remain vote by imposing an intolerable dilemma on the British people. In, and keep the decline we have forced on you, or leave, and we will ensure even more pain and hardship. Think about it. That was really the message of the remain camp. Worse still, the message was originating from persons who live in penthouse accommodation and shop at Harrods. …” (Quote ends).

Certainly in both Australia and New Zealand, this is an issue at the moment. Both countries have high (relative to our population) immigration. However the vast majority of immigrants settle in the one area (each) that is already full to bursting point, and with people sleeping in cars and tents on open land because there’s simply not enough houses.

Yes that’s right, about 60% of immigrants to Australia, never go any further than the greater Sydney area, and in NZ, it’s the Auckland area.

Obviously immigrants like to settle in the major metropolitan areas because they are the most “cosmopolitan” places. Because of previous migration, that’s where the most “ethnic” food stores will be. The Lebanese and Chinese food shops, the Indian take=away and the Asian grocery store. And hey it’s understandable that if a Vietnamese person needed to visit a doctor or dentist, they’d be more comfortable going to a Vietnamese speaking one.

You’ve got to ask, why the idiots in the Australian and New Zealand governments, instead of actively bringing in all of the fully supported migrants to areas which are already over-populated, don’t they pick some of the half-empty country towns dotted around the land ?

It’s true that support services for new migrants, like social support services and some English classes for new arrivals etc are already located in Sydney and Auckland, but those sorts of things could be opened up elsewhere with very little effort.

From a zero start, a critical mass of new immigrants would very quickly be built up, so very soon they could have access to ethnic based shopping options and healthcare providers in their own languages.

One wonders if the same is needed in Britain ? Do new migrants need to be more equally shared around the place ? And for that matter are there issues regarding housing supply and affordability that need to be addressed ?

Governments cannot be blamed for the weather (well not directly) but they are responsible for things like immigration. New entrants can be granted visas which require them to live somewhere for a particular period of time (say 10 years) by then they will (hopefully) have become settled in their new community, and hopefully they won’t want to all rush to London/Sydney/Auckland the very day their 10 year visa condition expires.

To all those wallies in government, I say to them “hey budds, why are you so single-minded about doing nothing about housing affordability and supply and just leaving it all up to the “free market” (which clearly isn’t working) ?”

We have many many restrictions of the otherwise “free market” in many areas. Whether talking about UK, Australia or New Zealand, the government specifically DOES NOT ALLOW the “FREE MARKET” to apply with respect to things like the supply of COCAINE, or MACHINE GUNS, or PLUTONIUM dust.

Now maybe you should argue we should just leave all those things up to the FREE MARKET as well, and not be bothered about what terrible downstream social consequences might well arise (with all the cocaine, machine guns, and radioactive dust floating around the city streets).

Or maybe it’s time for the governments, at least in those countries that are having major problems in their biggest cities, to find some fixes.

I personally believe that taking the PROFIT-EERS out of the equation will help considerable.

Just to take a simple example, water (definitely essential to life). In places like Australia and NZ we have a two-tier system. We have “for profit” water as sold in plastic bottles and carry-containers at supermarkets and we have “not-for-profit” water as made available through our city council, or local water authority.

The difference in price is somewhere in the region of a thousand to one, or 1000:1. Often even more. Indeed in many areas, the bottled water actually wouldn’t be allowed to be piped to the city’s inhabitants as it is HIGHER in contaminants.

To take an example I know from Christchurch city in NZ. The cheapest house and land package in the cheapest suburb would be about NZ $ 250,000 in Aranui, for an old 3 bedroom house on land (and possibly no lockup garage).

(In NZ, the minimum wage of $15.25 per hour is $31,720 annual gross. So using the traditionally accepted bank formula of house price being 4 times annual gross, that would make an affordable house total price of $126,880. Therefore housing, (at the bottom range of the market) is a multiple of almost 8-times income. ie Christchurch’s cheapest houses are costing about double what they should in relation to wages. Minimum wage isn’t going up by anything anytime soon, and never goes up by much anyway, so somehow we need house prices to fall to half what they currently are.)

I am *NOT* suggesting that similar houses (to what’s currently available in ‘Aranui’) could be made on a “not for profit” basis of one one-thousandth of the current NZ $ 250,000 price, ie, DON’T expect to buy a house and land package for just NZ $250 !

But it makes me wonder, if we took the profiteers out of the equation, how much would a house and land sell for ?

(In 1974, NZ took the profiteers out of the motor vehicle personal injury compensation system. Annual car registration in NZ is now NZ $ 130 annually. Australia has a similar-to-the-USA profit based system and car registrations (including MVIT “green slip”) are somewhere around Aust $800 a year. ) So taking the profiteers out of the equation, might well reduce house prices to a quarter or a fifth of their current level.

How much would people happily pay for a house to have security of tenure over their home, if they knew that when they sold it again, whether in 3 months or 65 years, it would have to be on-sold for the same price they brought it for ? ie, no personal profit would be made.

Currently in Auckland NZ we have the stupid situation that houses get fully refurbished, at a cost of many tens or even hundreds of thousands of dollars, just prior to demolition (as the house buyers just wanted the land onto which to build a new house).

Not counting the cost to the planet in the huge waste of resources (the labour resource of a fully refurbished house is entirely wasted during its demolition, and only a limited amount of the materials used are salvaged and re-used).

In Auckland and Christchurch, and possibly London too, can we please get the PROFITEERS and “investors” OUT of the housing “market” Let’s leave the housing “market” for people that want a house just to live in, for them and their families.

Far too many people are currently paying 70% or more, of their nett income in “rent” whether it’s to a private landlord or  in mortgage repayments on huge loans to buy even basic housing. That gives them very little else to spend on food, electricity and home heating, car costs and public bus/train transport or education classes and courses etc.

Imagine how much better life on Earth would be for all of us, if rent or mortgage repayments only typically amounted to say 10% of your weekly income.

Think how much good could be done as people donated just a small portion of all their “spare” money to various charities (whether it’s guide dogs for the blind or conservation groups trying to re-plant native trees or whatever). What about saving something extra towards a rainy day, or ones’ retirement ? If it was just 10% of weekly earnings needed to  cover rent or mortgage payments, folks on even modest wages could afford to “gamble” something on the share market. The extra finance available for new start-ups would push investments in new technologies. Many would fail, but some would succeed.

When I first heard about the “BREXIT” vote coming up, I was initially a supporter of LEAVE. I looked forward to Britain re-establishing closer links with former colonies like Australia and New Zealand.

NZ exports used to go 70% to the UK and 3 % to Asia, but since the early 1970’s that ratio has switched. Asia’s population has exploded and the people there want feeding, plus some manufactured goods we sell into those markets and many people from Asian countries come to NZ for holidays.

However I have come to the opinion that the right move was for Britain to stay within the European Union.

It seems though, that with the outcome of the BREXIT vote, an orderly withdrawal will commence.

The process is expected to take 2 or more years and the exact details simply aren’t known.

Some options are a sort of “Norway” situation which would place Britain outside the EU and unable to vote on EU policies, but still bound to adhere to many of them. Whatever the details eventually become, there will be many politicians and senior civil servants laughing it up big-time at the taxpayers’ expense, as they attend an even greater number of talk-fests over the next few years…

“Boaty McBoatface” it makes you think, don’t hold a poll unless you’re sure you’ll be happy with the outcome.

I fear that 48% of Britons are going to bed unhappy tonight and that a great many more (98% ?) will be unhappy when the repercussions of leaving the European Union, come back to bite them in the arxe.

I’m left wondering if “immigration” has taken the blame for the UK government’s failure to provide, allow and facilitate, healthy, safe, comfortable and affordable housing for people. All in the name of “free market” economic theory.

Housing crisis… ‘tiny houses’ miss the point entirely

Many cities in Australia and New Zealand are currently experiencing a housing crisis. There is both a lack of supply and what is available is very expensive (when wages and taxes are considered).

From my experience, in the last 25 years, the price of “starter” houses, the very cheapest you could find to buy, in the Christchurch metro area has increased about 15-fold. Gross wages have about trebled (but are now taxed more highly anyway).

This has made things very much harder for people to get “onto the property ladder” (ooh I just HATE that term), especially for one income households, including single people, as well as lower income earners

The main problem, throughout both Australian and New Zealand’s major cities (and even some major country towns) has been the shortage of land.

New Zealand for example has about same land area as the United Kingdom but with only one 15th of the population of the United Kingdom, yet we are suffering a “land shortage”. Yes, Australia and NZ do have a lot more land tied up in National Parks and other wild places, which is why tourists from all around the world flock to see our countries’ natural beauty. There are also vast tracts of land set aside under various “native title” and Aboriginal land reserves.

But among at least some other commentators, I am left with the conclusion that it is the deliberate strangulation and limitation of the supply of new land for housing developments, which is a major cause of the crisis we find ourselves in today. In 1986 land for a housing section (block or plot) on Perth’s outer edge, could be purchased for less than $10,000. Buy 2007 that price had increased to $170,000. Now ‘supply and demand’ effects and often controls the price of, well almost everything. From new toothbrushes to cocaine. Yes the population has increased a bit. But certainly NOT 17-fold.

Restrictions seem to happen at every level, but local councils have perhaps the biggest part to play. Trying to maintain a pleasant GREEN BELT of hobby-farms and lifestyle-blocks on the edge of cities (“with room for a pony” as Hyacinth Bouquet, the Bucket woman, would say) is a laudable idea. Except that we live in a society where as well as immigration, we have a growing population.

Society needs to sit down and have a serious talk. If People are allowed to have more than 2 children in their lifetime, then those children need places to live and work when they grow up.Perhaps if we are to allow unfettered reproduction, we need to allow unfettered development of new “greenfields” lands and new housing ?

There have been some articles lately on television and I was moved to make these comments in relation to a newspaper item.

People seem to think that making tiny houses is the answer. Often to comply with local zoning laws, these tiny houses are fitted with wheels, although they are not intended as road-going caravans. They are NOT licenced to travel on the roads and cannot be towed along or moved unless they have a special transport permit, and often extra wheels fitted.

Now don’t get me wrong, us Western Worlders need to start living more lightly on the planet, and having smaller homes is a part of that equation.

But spending the same amount of a house deposit and months of labour, constructing what amounts to a wooden caravan, is not the answer.

Where are you going to park the blimming thing ?

What few caravan and holiday parks exist are already full of people living in caravans because there aren’t enough houses for people to live in. And more and more, because of the government’s strangulation of new land supply, the caravan and holiday parks that exist are being sold off for other developments and the tenants there thrown out onto the street.

Another factor affecting the price of new housing is entirely unnecessary red tape from local councils.

Now I support building codes. One reason for the minimal casualties that occurred in residential houses during Christchurch’s devastating earthquakes of 2011, is because our houses, especially those of 2 or more stories, must be earthquake resistant.

Soon after arriving back here, I visited a building company and described a housing style I had seen in Australia, but not New Zealand. The guy showed me some catalogues and yes they had similar things available here. A one or two-storey house could indeed be constructed in less than 6 weeks instead of the usual 8 months, and the cost per square metre of floor area was less than 2/3 the normal price (in Australia it’s less than half). “Oh, but you’d never get a building consent to build one in Christchurch” he said “someone at the council doesn’t like the look of them.”

Well “I” don’t like the look of rose bushes in people’s front gardens, should I be allowed to ban them city-wide ?

Keep in mind these houses would comply with all required building, health and safety, fire safety and earthquake resistance codes. Someone at the local council just “doesn’t like the look” of certain housing styles, so EVERYONE has to pay 33% or 50% more for their new houses and has less choice of style !

For many decades now, throughout most major Australian and New Zealand cities, there has been very little new housing built “at the cheaper end of the spectrum”. Some new land subdivisions even have covenants on the title which actively forbid cheaper homes from being constructed.

In due course, and with only expensive houses and land coming on to the market, even years later, what few older and cheaper houses that do exist, get snapped up (often by “developers”, in the case of Auckland, land supply is so tight that even fully refurbished homes which have just had $100,000 in renovations, are often being bought just to be bulldozed, so the land can be used for a new, and even more expensive house build. So there are even LESS older cheaper homes, what used to be the “starter” home for a “first home” buyer.

Here’s a link to the article and following on are my two main comments relating to it. (This was originally published elsewhere and has been edited and extended for publication here).

(1) Sorry it is still dearer than a large caravan and double the price of a 54m2 “4 car garage” that could also be converted and used for housing. The $50,000 price is indeed DEARER than a house deposit for some cheaper Chch houses and you still need a section to park the tiny house or caravan on ! If you have $ 50 k, buy the cheapest house you can and you have room to park 10 caravans or tiny wheeled houses…. and charge all the residents therein $150 a week each in ground-rent. Unfortunately this guy has got a lot wrong. I wonder if it is because he is coming from a background of wealth and privilege and I think he has largely “missed the point”. Note…in principle I am a huge supporter of folks living in tiny houses, caravans and other alternative structures. This guy still needs a section with an un-condemned house on it, to be allowed to park it there and to stay in the wooden-caravan he’s made legally.

(2) Here’s a place that before the earthquakes of 2011 would have sold for about $375,000. It suffered some damage in the earthquakes but is still a completely livable home. The owners have accepted a cash payout from their insurers but chosen NOT to repair the damage. As such the house is being sold “as is, where is, uninsured and uninsurable” for little more than land value only. Repairs can easily run to $100,000 if new earthquake resistant foundations need to be installed underneath an existing house. (URL below, sorry but it no longer works) A beautiful 3 bedroom house in Papanui. It has a “land value” of $151,000 and the entirely livable house will probably sell at auction tomorrow for about $170,000k. That would require about $50,000 deposit. The section land size is under 600m2 so only enough room to park 7 caravans or tiny houses. Still that’s $1050 a week rental income and the mortgage repayments would be $182 a week. So that’s $800 a week in profit or pay off your house freehold in two and a half years ! Thanks Catherine you’ve saved the day yet again. Why are you the lone voice crying in the wilderness and no-one listening to you ! (ok so I cheated slightly, I didn’t consider income tax obligations, but that’s what family trusts are there to avoid eh !)

Note the auction was held on 12 June 2014, I do not know what price it reached at auction. Often in NZ, even at mortgagee auctions, houses get “passed in” and the mortgage holder simply refuses to accept the highest bid, as they are seeking a higher price still.

Here is a link to the advertisement but the way NZ’s Trademe auction website works, is that the advertisement will no longer display.