Who Are The Bidders For 2,500 CHRISTCHURCH State Houses?

Hold Your Noses…

- John MInto

This is an update to earlier articles on privatising State housing in previous issues of Watchdog. By way of background, here is an excerpt from a 2015 article I wrote on the issue:

“The first stage of privatisation involves the sale of 6,000 to 8,000 houses over the next few years with up to 2,000 being sold in the first year. It’s clear that, if unchecked, National will sell every last State home. The latest proposal for mass privatisation of State housing comes close on the heels of National Party attacks on Housing New Zealand (HNZ) and its tenants from its first two terms”.

“Early in its first term National forced HNZ to slash State house waiting lists, close most local offices and strip tenure (the right to stay in your home) from existing tenants. It drove staff morale to rock bottom and HNZ has been stripped of its role in assessing tenants for housing needs. Work and Income NZ (WINZ) has taken over this function and will allocate eligible tenants and families to HNZ or private ‘social housing providers’”.

State Of State Houses

“One of the reasons the Government gives is that HNZ has been a poor landlord and tenants need better. It’s true the condition of many State houses is appalling. Successive National and Labour governments have failed to invest in upkeep and maintenance, preferring to require hundreds of millions in dividends from HNZ. They have treated it as a cash cow rather than an essential social provision for low income tenants and families”.

“Dividends paid by HNZ to the Government in recent years:

$71 million in 2010

$68 million in 2011

$77 million in 2012

$90 million in 2013

“National has plans to keep milking these tenants saying last year (2014) it was demanding $252 million in dividends from HNZ over the following three years”.

So far, the Government has sold 1,124 State houses in Tauranga to IHC (bankrolled by corporate interests), failed to sell groups of State houses in Invercargill and Horowhenua and has now lined up three “consortia” to bid to buy 2,500 Christchurch State houses.

Who Are They?

I’m not one to bother looking at corporate Websites with their carefully photoshopped pictures and expansive, self-congratulatory language. But recently I looked up the investors who want to buy 2,500 State houses in Christchurch. Amy Adams, our most propertied MP and ironically the “Minister for Social Housing”, announced that three consortia had been selected to bid for the homes built by our parents and grandparents.

They are:

- Community Futures Christchurch (made up of Trust House Ltd, Whitehelm Capital Pty Ltd, and Broadspectrum (NZ) Ltd);

- Otautahi Community Housing Consortium (comprising Otautahi Community Housing Trust and Morrison & Co PPP GP2 Ltd); 

- A consortium comprising Compass Housing Services Co (NZ) Ltd, AMP Capital Investors Ltd, and Brookfield Financial Australia Securities Ltd.

Each bidder is fronted by a “registered social housing provider” but behind them pulling the strings are the corporate money men. Reading their Websites is enough to bring up your breakfast. If the “We believe…” and “Our values…” statements aren’t sickening enough then looking behind their public relations descriptions should be. Here’s a short example from Whitehelm:

  • “Whitehelm is a long-term specialist investment manager that partners with clients to invest in assets that protect the real value of the investment whilst providing predictable cash returns.
  • We achieve this through investing in assets that have clear and measurable cash flows and by paying a price that is below our fundamental assessment of long-term value.
  • We seek to identify investment opportunities across the capital structure and transact opportunistically to take advantage of asset mispricing”.

Translation: “We love Government guaranteed cash (income-related rental scheme subsidies) from Christchurch State house tenants and we’ll make sure we rip-off New Zealand taxpayers in the process of getting them. We’ll lie and tell the Government they are ‘mispriced’ and we’ll make a lowball offer like the other bidders”.

Whitehelm has crawled out of Australia along with another bidder – Broadspectrum – a company even lower on capitalism’s evolutionary scale. Radio New Zealand revealed recently that Broadspectrum’s parent company in Australia was running the infamous Manus Island detention centre and, alongside the Australian government, agreed to pay $A73 million in an out-of-court settlement for horrendous mistreatment of detainees. Presumably Amy Adams sees this Manus Island experience as an advantage for Broadspectrum in its bid for Christchurch State houses. Mistreating vulnerable people and putting the boot into beneficiaries is a National government speciality.

And what about the other consortium fronted by the Christchurch City Council’s Otautahi Community Housing Trust? Who are the moneymen behind this? It’s New Zealand’s Morrison and Co who manage infrastructure investor Infratil. It is no different to the Australian companies in its rapacious behaviour. It made its money from the privatisation of New Zealand State assets over the past 30 years and it aims to continue its role as one of the biggest parasites on the New Zealand taxpayer.

Some City Councillors see Infratil as the best option because they say it’s New Zealand-owned. However, because it is in fact more than 25% foreign owned it is, under New Zealand law, officially designated as foreign-owned (“foreign-owned but New Zealand-controlled” is how Treasury describes Infratil).

Why Do Corporates Want Our State Houses?

It’s important to understand the huge sums to be made from this deal. As well as the Government- guaranteed income from rental subsidies, there is huge money in the redevelopment of areas of State housing as is occurring in Tamaki (Auckland) now. A block of, say, six State houses can be demolished and replaced by 18 units with only six needing to remain as State houses. The rest will be sold for private profit.

In reality, this sale is a massive corporate landgrab in the heart of Christchurch. For example, the entire suburb of Bryndwr, which is surrounded by much flasher suburbs, will be stripped completely of State houses in favour of housing for the wealthy. Land values in Bryndwr will skyrocket as replacement State houses are built in lower-income suburbs where land values are much lower.

No wonder the money men are having wet dreams at the prospect. The tragedy is that we have a Government and local City Council aiding this private theft of the commons. It is the biggest step yet in the Government’s plans for the largest privatisation in New Zealand history – our $18 billion State house network.

If you think this stinks; then help us fight it. You can donate to Housing Action Canterbury which is working hard to make this the biggest election issue in Christchurch in 2017. We have a $10,000 fighting fund set up and have used it in part to pay for a wraparound on the Star newspaper into 92,000 Christchurch homes.

We have a whole lot more to do. If you can help please send a donation to:

Account Name: Housing Action Canterbury

Account Number:  38-9017-0034814-01

You can be assured you will get a good bang for your buck.


Non-Members:

It takes a lot of work to compile and write the material presented on these pages - if you value the information, please send a donation to the address below to help us continue the work.

Foreign Control Watchdog, P O Box 2258, Christchurch, New Zealand/Aotearoa.

Email cafca@chch.planet.org.nz

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