Celebrating humanity's flourishing through the spread of capitalism and the rule of law
16 Nov 2016 Leave a comment
in economics of natural disasters, politics - New Zealand, transport economics, urban economics Tags: earthquakes
Take the bus. But not a trolley bus. We were going to walk home (7.8 km) but once we got to the edge of Mount Victoria, bus drivers were picking people up.
Buses could not get into the centre of town because of gridlock, so drivers showed the initiative to go to the perimeter of the CBD and going back out and in on their normal routes. They picked up many people. Do not start me on how useless trolley buses are after a natural disaster
08 Nov 2016 Leave a comment
in economic history, politics - Australia, politics - New Zealand, politics - USA, urban economics Tags: Australia, housing affordability
30 Oct 2016 Leave a comment
28 Sep 2016 Leave a comment
in applied welfare economics, economic history, politics - New Zealand, urban economics Tags: Generation Rent, housing affordability
26 Sep 2016 Leave a comment
in economic history, urban economics Tags: housing affordability, housing prices, land supply, RMA, zoning
The Resource Management Act was passed in 1993.
Note that there is considerable regional variation in housing prices in New Zealand.
Source: Property Prices in New Zealand | New Zealand Real Estate Prices.
25 Sep 2016 Leave a comment
in economic history, politics - New Zealand, urban economics Tags: Generation Rent, housing affordability
Source: Housing affordability: The Social Report 2016 – Te pūrongo oranga tangata from Perry (2015), Ministry of Social Development, using data from Statistics New Zealand’s Household Economic Survey.
11 Sep 2016 1 Comment
in applied price theory, economics of regulation, politics - New Zealand, urban economics
The Greens and Labour both want to build 100,000 affordable houses over 10 years. Neither explain where the land will come from. Nor do the Greens explain how to make houses more affordability without making land cheaper.
Labour is the best of the two parties because they propose to abolish the Auckland urban limit and the constraint on land supply which that represents. 
The Greens propose to get to where they want to go with taxes and bans on foreign buyers. Those proposals of the Greens do not increase the amount of land available and therefore the number of houses that will be built.
06 Sep 2016 Leave a comment
in economics of regulation, politics - New Zealand, urban economics
31 Aug 2016 Leave a comment
in politics - New Zealand, urban economics Tags: housing affordability, land supply, RMA, zoning
Source: IMF Global Housing Watch
31 Aug 2016 Leave a comment
in labour economics, politics - New Zealand, poverty and inequality, urban economics Tags: homelessness, social insurance, social safety net, welfare state
Source: 24 August 2016, Most homeless people working or studying, News, University of Otago, New Zealand, table 4.
30 Aug 2016 Leave a comment
in labour economics, politics - New Zealand, poverty and inequality, urban economics Tags: child poverty, family poverty, homelessness, New Zealand Greens, New Zealand Labour Party, social insurance, welfare state
I cherry picked my previous data on homelessness if the New Zealand sub-Reddit is to be believed and from which I am banned and cannot reply. Plotting the data in full is to cherry pick it. The chart below is simply the first two rows of the source data. The subsequent rows deal with those in emergency accommodation and in temporary accommodation.
Source: 24 August 2016, Most homeless people working or studying, News, University of Otago, New Zealand, table 4.
When I shared this data on Carmel Sepuloni MP’s Facebook page, she rightly and constructively said
Thanks for your comment Jim. Unfortunately the number living rough has increased since 2001. We want to focus on improving the future, which is why we are holding our homeless inquiries so we can best understand and address this issue:
Rather than pointscoring, the issue is what to do to fix the problem. How desperate is much of the rest of the Left to beat up this issue as the fault of John Key. This is an an important issue that should not be used for point scoring by sufferers of John Key derangement syndrome.
Homeless people are those who I charted above. They are sleeping rough or in a car. They have slipped through the social safety net which is obviously not working for them. If you are in emergency accommodation, the social safety net is working. The issue is making that safety net work better in terms of moving quickly into more permanent accommodation..
27 Aug 2016 Leave a comment
in applied price theory, politics - New Zealand, urban economics Tags: affordable housing, housing affordability, land supply, New Zealand Greens, New Zealand Labour Party, price controls
The Labour Party (and Greens) both plan to build 100,000 affordable homes and sell them within a specific price range. In Auckland, where houses cost in excess of $800,000 on average, they hope to enter the market at the $550,000 point with still quite reasonable housing.
What I ask you is how will Labour and the Greens make sure the affordable houses both are proposing are not snapped up by well-to-do buyers rather than families currently locked out of the market? What will the rationing mechanism be?
Source: KiwiBuild – New Zealand Labour Party.
How will Labour and the Greens ration these desirable houses given that they are priced well below the competition? If two buyers both offer $550,000 for the house, which bid will be accepted?
If the next best available house in Auckland is worth more than that because it is not sold by the proposed Housing Affordability Authority, the first bid for these houses will be $550,000 which is the maximum the government under a Labour Party is willing to accept? What happens then?
It is basic economics that if you price at less than the market clearing rate which in Auckland is somewhere near $800,000, people will queue to buy what you have unless you raise the price. The exercise of building 100,000 affordable houses makes no sense unless the purpose is to undercut what the market currently supplies.
As the houses are to be sold by a government agency, there can be no black market nor dilution of quality to even up supply with demand. How will a deadlock in price bids be resolved if the maximum bid for an affordable house starts at $550,000?
Labour acknowledges the possibility of flipping by restricting resale for 5 years. But what stops investors just waiting 5 years as there is any significant price gap between these affordable houses and the private market alternatives.
What stops more affluent buyers living in these houses because they so much cheaper than the competing options in Auckland? If you miss out in bidding on one affordable home, do you go back to the end of the queue for the next that is built or get some priority?
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