Housing Crisis: Targeting Chinese people isn’t what Olivia Pope would do

By Lamia Imam

The current National government stopped recording the number of overseas residents buying houses in New Zealand. There’s actually no way for us to know the extent of damage non-residents are causing by buying up houses that apparently are rightfully ours. The way the Herald chose to present the problem in yesterday’s story is not only xenophobic but statistically unsound. The story is about a large chunk of buyer’s name being “Chinese”. Basically we have resorted to racially profiling buyers to explain why Kiwis are unable to buy their own homes? This is particularly heinous, given other surveys show that British and American buyers also make a chunk of the foreign purchase of Kiwi homes. And on top of that, Labour’s solution is really not a solution but rather an idea with little policy merit.

Keith Ng over at Public Address has broken down the actual number, addressing the fact that the data used is completely unreliable and the resulting conclusions completely false (on that note, there are some folks who desperately need to take a maths/statistics refresher course). Thomas Lumley at StatsChat has also done the same. And Minister Nick Smith also pointed out in the original Herald article that the data is sourced from one agency and looks at a specific time period. But I want to address how we talk about this and other ways to address the apparent problem of high house prices.

A number of people on Twitter tried to tell me that if the foreign ownership numbers end up being true, then this way of doing data analysis is accurate. These people are grossly mistaken and do not seem to understand that data itself without context is hugely problematic from a race perspective. This kind of data analysis would be akin to the FBI providing figures related to domestic terrorism in the United States from July 2001 to September 2001 based on last name analysis. Do we see how misleading and problematic that is? Just because it is true that a more “Muslim sounding” names would probably come up, does not mean we should racially profile all Muslims with those names, which would include a large chunk of non-Muslims and non-terrorists.

housing

Labour has a policy proposal – it is to ban foreign residents from buying NZ homes. It is an interesting policy, one I do not necessarily agree with for a number of reasons.

  • The first being, we can’t actually ban all non-residents because of various trade agreements (like the CER) so exceptions will have to be made. Although Kiwis can’t buy houses in China so there might be some specific possibilities based on a two-way relationship rather than race.
  • The second, their impact analysis does not tell me how much of an effect it would actually have on house prices given similar policies exist in other countries that still face high house prices.
  • The third, it does not take into account our domestic situation of high-income Kiwis owning multiples houses for investment reasons because we do not have diverse investment opportunities that are also low risk.
  • The fourth, cost of living in New Zealand compared to wages. If wages do not allow Kiwis to buy a modest home in the area that they work, then perhaps there needs to be a discussion about how businesses can be incentivized to raise wages.
  • The fifth, comprehensive capital gains tax policy. We can restrict foreign ownership all we want but that alone probably will not fix the problem just like capital gains will not fix the problem if it is narrowly applied. Labour has effectively abandoned this policy for the moment as well.

The housing crisis is not a simple problem. One policy solution will not fix this problem. A policy that targets Chinese owners will absolutely not fix the problem and will create an additional political problem for Labour. For more on the political fallout, see John Palethorpe’s excellent post.

Labour’s Kiwibuild policy has some merit in my opinion. It could be further tweaked to make it restrictive in the following way –

  • Available for purchase by those living in New Zealand intending to buy a house as a first time buyer for the family; and
  • Only for those who have a certain income (for low to middle income families); and
  • They are sold at near cost price (so the government doesn’t make a profit but is essentially providing a service and in the process easing the pressure on the property market)

I don’t believe that Phil Twyford is racist, having dealt with him personally at work. I don’t think Labour believes that all Chinese folks are non-Kiwis but this was a terrible error in judgment on their part.  And, given the extent to which Kiwis can be racist, this is an uncomfortable policy for all minorities living in Aotearoa. Chinese folks will feel particularly uncomfortable and unwanted in their own country.

In conclusion, a policy that addresses the five concerns above and also allows low to middle income folks to access the housing market is a policy I can get behind. A policy that uses data analysis of people’s ethnic last name is an inherently racist policy and should be rejected. Just because the government will not collect adequate data does not mean we get to make up our own.

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One comment

  1. Ben Ross - Talking Auckland · July 12, 2015

    Reblogged this on Talking Southern Auckland and commented:
    Lamia makes salient points here especially the five policy planks further down the post.

    However, I feel there is a sixth plank missing although this is unique to Auckland. That is the Proposed Auckland Unitary Plan is under Hearings at the moment.

    With the Residential Zones making their way through workshops, mediation and then the Hearings in October I am reluctant to do anything gun-ho on trying to get the supply side moving any more than the Special Housing Area (as cumbersome as some of them are).

    Why?

    Well check this:

    And this is before we even get the Rezoning exercises next year before the entire Plan goes live in about 12 months.

    The point being is we dont know what changes to the Policies, Development Controls, or even the quantity of the medium and high density zones will do to potential development yield thus supply.

    Will we get liberalisation that allows a greater amount of housing choices to be built thus bring the “crisis” under control or will the reverse happen and things get really bad.

    We just do not know until the final version of the Unitary Plan is brought into operation next year. Once it is then we can work on things like Kiwi Build and even some of the demand side stuff.

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