By David Hargreaves
There is such a thing as being too popular and/or successful.
The astonishing response to the Government’s opening up of registrations of interest for a KiwiBuild house is already running the risk of falling into this category.
What’s the problem, you say?
Well, in the simplest of terms – managing expectations. That will be the problem. Because believe it, the Government’s going to have a job on its hands.
At the time of writing 17,000 people and counting had registered, which is making the KiwiBuild ‘list’ the hottest ticket in town. ‘I’m on the list – are you?’
Obviously, just because people have registered, it doesn’t mean they will go the whole hog and properly apply. But you would have to suspect that a pretty fair portion of people will.
It’s fantastic that there is so much interest. It would not be a good look if Housing and Urban Development Minister Phil Twyford had got up, said his piece and then NOT been killed in the rush.
But if you think about it, there should be no surprise at the stunning popularity, particularly given that the salary cap has been set as high as $180,000 a year for couples and $120,000 for singles.
Inevitably this has already led to criticism that this is middle class welfare. But I’m not sure how much option the Government really had.
If the Government had really clamped down on the upper income limits for KiwiBuild houses this could have led to insufficient numbers of people coming forward.
It was presumably seen as important for interest to be generated in order to inject some momentum into the KiwiBuild programme.
Arguably perhaps, Twyford is happy for public pressure to go on – such as through a big wait-list – because this ensures the Government does have to be fully committed to the initiative.
I’ve already previously said I think the Government needs to go ‘all-in’ with the KiwiBuild strategy and fully commit to it. It can’t be half-hearted or the plan won’t work.
Time to deliver
By creating such a level of public expectation at this stage then the pressure really goes on the Government to deliver. It can’t backtrack. And maybe, with such a level of expectation the pressure is on to free up more capital to put into the KiwiBuild programme.
The $2 billion committed so far looks very light, even though the Government has said it will be ‘recycled’ as houses are completed and brought to market. But more financial muscle upfront would help.
Remember, the plan at this stage is for 1,000 KiwiBuild houses by June next year, another 5,000 in the year to June 2020, 10,000 in the year to 2021 and 12,000 a year after that till completion of the 100,000.
What that all means is that even if just half (8,000-9000) of those currently registered to receive KiwiBuild information eventually end up on the wait list for one, some of those people who’ve registered this week would definitely not get a house till 2021 at least. Do they know that?
The ballot process the Government’s talking about – of which it has yet to release full details – therefore becomes quite crucial. It also becomes a very likely centre piece for discontent and claims of unfairness from those waiting.
This is where the managing of expectations kicks in.
A reality check
It will be important that the Government stresses that not everybody who applies is going to get a house. It needs to stress that people may have to wait years. There will be disappointment. Also, and dare I even mention this, I suspect the Government will have to make absolutely clear these things are not some kind of a free lunch. That is – if you get a KiwiBuild house you WILL need a mortgage and the usual bells and whistles. Look, people might think me ridiculous for even saying that – but expectations can be funny things. These are not free houses and there are some people out there who might not be absolutely clear on that.
I had occasion many years ago to get involved in communications work for a community-based trust that was sitting on some very valuable assets. It was decided to sell the assets and pay out the money to members of the community. The talk was of households getting cheques for a four-figure sum. Nice.
But the thing was, having raised the expectation that this would occur there was then increasing frustration among the community when the money didn’t appear to be forthcoming as quickly as people thought it should. Households that had seemingly managed before to get by on the money they had – before talk of them getting a four-figure cheque – suddenly absolutely NEEDED that money NOW. Where is it? Give it to me! And it all got a bit tense and yes, expectations that had been raised from nowhere now had to be managed.
The Government’s walking into a similar but much bigger situation with KiwiBuild. It’s promising houses. It’s inviting people to apply. And people will expect they can get one. And they won’t want to wait.
And of course, the next thing will be – what of the people who are turned down, who don’t meet the eligibility criteria?
The dream can be yours
For a lot of people, buying a house was becoming an unobtainable dream.
This Government is now waving something in front of them that they may or may not be able to get – but certainly the Government’s giving the impression they can get.
Expectations are being raised. If you raise expectations, you have to manage them, and you have to manage the inevitable fallout when people get disappointed.
Really good on this Government for having a go at this.
But I do fear there’s a huge streak of naivety at the core of KiwiBuild and the way it’s being put together.
The next part of the process – defining eligibility, and making it clear just how long people might have to wait – is going to be crucial..
Turned off and disillusioned
If people get turned off or disillusioned by the KiwiBuild process, well, that’s going to blow up in this Government’s face quite quickly, and at the ballot box.
Did the Government really need to start the whole registration process now, before it’s got houses built? The Government’s advertising its runs on the board before it’s got runs on the board.
Well, as I’ve implied, there was probably a desire to create interest in order to actually put the Government under pressure to get the job done.
There’s some logic in that.
But there’s also logic in not putting too much pressure on yourself. And there’s logic in not over-promising before you’ve definitely worked out whether you can deliver.
And KiwiBuild has not been delivered yet.