KiwiBuild is a real estate development scheme pursued by the Sixth Labour Government of New Zealand which began in 2018. It has the aim of building 100,000 homes by 2028 to increase housing affordability in New Zealand. It comes under the oversight of the Ministry of Housing and Urban Development and the Minister responsible is the Minister of Housing and Urban Development Phil Twyford.[1]
The KiwiBuild scheme was announced as Labour Party policy in 2012.[2]
After the 2017 general election, the Sixth Labour Government of New Zealand took office. Finance Minister Grant Robertson outlined a mini-budget on 14 December 2017 which allocated $2 billion of capital spending to KiwiBuild. Homes built under the programme are sold to first-home buyers and the cash is recycled into further housing developments.[3]
In mid-January 2019, Housing Minister Phil Twyford acknowledged that the Government would only be able to build 300 of the 1,000 KiwiBuild Homes it had promised by 1 July 2019.[4][5] That same month, it was reported that KiwiBuild's Head Stephen Barclay had resigned following a dispute with Twyford over moving KiwiBuild from the Ministry of Business, Innovation and Employment (MBIE) to the new Ministry of Housing and Urban Development (HUD).[6][7] Later reports claimed that Barclay had been the subject of complaints by staff over his leadership behavior and treatment of others. In late January, Barclay filed a constructive dismissal case against HUD, claiming that the Ministry had breached his privacy.[8][9]
To be eligible to buy a KiwiBuild home, buyers must be New Zealand citizens or permanent or usual residents, earn less than the relevant annual income caps ($120,000 for singles, $180,000 for couples) and intend to live in and own the home for at least three years.[10]
The scheme has attracted criticism around the income caps, deemed to be too high for low-income buyers to be able to compete with those receiving higher incomes.[11][12] Following the sale of the first Kiwibuild homes Phil Twyford stated that the scheme was not targeted towards working poor and unemployed families, attracting criticism from aspiring home-owners and activists who argue KiwiBuild will lead to increased speculation and gentrification.[13]
There are a lot of misunderstanding about how the scheme works by the general public and the media. One widespread belief[citation needed] is that the KiwiBuild houses are subsidized by the government when what really happens is the property developers sell to the government at what is likely the market rate and the government then sells the property to eligible buyers 'at cost'. Once the government is paid by the buyer, the money is then recycled back into the scheme. The developers sell the KiwiBuild houses to the government for no more than $650,000 for their houses in Auckland and Queenstown and $500,000 for houses in all other areas. The developers appear to be achieving these price cap restrictions by building very basic small houses on small lots of land at prices not much cheaper than their other houses that are not part of the KiwiBuild scheme[14][15].
At least one critic has suggested first home buyers would be better off avoiding the KiwiBuild scheme because they will still pay free market prices in return for a very small property that they must live in for three years to avoid stiff penalties from the government. Furthermore, the chances of getting the house is slim as there are many more applicants than there are houses available.
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