A Modest Deposit

Society

01.04.2014

A Modest Deposit

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Good morning. You are an Aucklander in your late twenties or even your early thirties, and you are in your first or second job after graduating. You are paying off a student loan, and your income grants you a very comfortable life by international standards. Yet you are renting and will continue to rent for some time – your housing companions are a dwindling circle of acquaintances in the same boat and sometimes in the same profession. They were good acquaintances for their time, but you did not plan to live with them indefinitely. If you are emotionally fortunate you may be renting with a significant other . The house you live in may have a rustic charm, but it may also be cold and damp.

The notion of owning your home is out of the question. The inner suburbs where you live, work and play are almost embarrassingly out of your means, while a life on the absolute periphery – Papakura, East Tamaki Heights, Karaka – would still require several years of monastic forbearance with the reward of social isolation and a vast monthly petrol bill at the age of 35 or 36. Mere saving does not cut it, as the Auckland property market rockets out of control. In the space of five years, it has risen by 52%. In 2008, the median house price was $435,700. Today it is close to $700,000. The centre cannot hold.

The answer lies within you.

*


house1


Good morning (II). You are an Aucklander between your early forties and retirement age, and after a few years of somewhat-less monastic restraint you purchased a home not in the periphery but in the middle. Te Atatu Peninsula, Howick, the great expanse of the Shore. Feeling flush but nervous, you decided to put your savings in the one, true secure Kiwi investment – additional Auckland properties. You are hardly a baron and barely a count – your portfolio is but a few homes, and you have done little to maintain them, but you have also done almost intimidatingly well.


It even intimidates you, because a voice tells you in the back of your head that this if this rise in value of homes isn’t too good to be true, it is at least too good to be sustainable. There is talk of a bubble that will one day pop of its own accord  - at least one expert anticipates that what comes up will come down ferociously. Between 30 and 50 percent in the next few years. You are still paying off two full-recourse mortgages, and you will not simply be able to walk away. Worse still is the thought of a future government aggressively intervening and popping that bubble. Having something concrete to blame will be cold comfort in a freezing market.

Deep down, you would settle for modest and incremental gains, even a gradual cooling. A soft landing. In the long run, it is better to pitch face-first into manure than concrete.

*


dungHouse1


A word on manure, or dung, and housing. It’s a material with thousands of years of use, most often mixed with other raw materials as bricks, plaster and insulation. Rural communities in India, the Middle East, and Africa continue to use it. In wattle and daub, it makes for a resilient binding. Set into a pungent clay, it has good thermal insulation properties. It keeps cool in summer, and warm in winter. Thanks to science, we now understand that even the humble dung beetle uses its rolling pooball to control its body temperature. It is, in short, a great regulator. Such a material must have wider application and assignable value than a simple ‘building-by-building’ approach.


Today, dung’s place in the modern home is as transient as a passing thought or the five seconds of Lumosity before you skip to the video . We make a few minutes to cast it out, and rely on pipes to send it somewhere less salubrious. We are mistaking sanitation for salvation.


*


an-example-of-what-a-hoarders-house-would-might-look-like-photo-courtsey-of-google-images1


There are always unusually cheap homes, even in expensive times. The reasons are often the stuff of newspaper headlines and urban legend – a murder-suicide here, the production of methamphetamine there, the hoarding of dozens of cats and dogs compounded by a failure to properly feed or care for them. These homes hold a perceived aura, and it is difficult to “move” such stigmatic buildings on the real estate market.


Would the answer to staying the unstoppable and destructive rise of Auckland and New Zealand property be for ordinary citizens to commit more of these acts? The answer should hopefully be no – there should be ways of deflating the situation that we would not consider morally outrageous. No one should ever resort to homicide or direct government intervention in the housing market.

Nor can we simply rely on houses merely being small, or dilapidated or ugly to keep their cost below a million dollars – recent history shows this not to be the case. Our last remaining option then, falls short of human cruelty but within the realms of human disgust – an assault on the senses, rather than the body and mind.

As dung evens out the transition between summer’s harvest and winter’s barren chill, so we must defecate all over our townhouses, villas and bungalows. We must egest on our decks and patios. Nature abhors a void, but the circumstances dictate that we void, void, void in an effort to create a steady status quo, to perhaps devalue our homes that little bit, for the housing market to cool and congeal.

*


2012-12-04-hoarders1


Ground rules, first. This is not vandalism, or a carte blanche excuse to act like animals. I would not expect people who defecate in, on and around their house to therefore also break their own windows or fail to leave a bathmat out when they are showering. Smearing one’s own feces over the walls, its ceiling and certain shameful corners of a house is not about doing permanent and illegal structural damage to a nest egg; it is about disincentivising the home as a nest egg, making prospective investors look somewhere less horrible for pleasure and profit.


But how much, and how often? The precautionary principle tells us that in anticipation of the worst kind of housing crash, we need to begin exudating regularly, and soon, if only to start turning the inexorable boom around. Given human reticence to give up a modern convenience, it is worth taking a page out of the late Robert Muldoon’s model to cope with oil shocks, under which every private vehicle owner nominated one day on which they were to refrain from using their car.

In our case, a rental household may nominate or be allocated its “toiletless day”. All other laws will remain in force – to leave one’s waste in public will remain a finable offence, to relieve oneself at the local park will involve a brisk ride home with the police. Households are not expected to parade themselves with indignity on their toiletless day – whether they opt to take their moment in an ailing pot plant, a hopelessly encrusted chamberpot under the guest bed, or the fireplace, this is not a celebration. It is simply rowing against the tide, a stench and sight that will offset the property’s illusory daily gain.

It remains a matter that needs to be treated with some sensitivity – it is likely therefore that the Reserve Bank would from time to time hold press conferences to dictate how much or how little we daub houses in our ordure from month to month. Periods of clement stability may indicate that households need leave only a telltale guilty streak in the rugs; meanwhile, the OCR hikes that once marked an effort to depress the real housing price will be replaced by a somber instruction by Graeme Wheeler for occupants to completely ruin the spa that evening.

The prudish cry will be that this is beyond the pale and that this is beyond what society condones. I doubt this very much. Let us take a look at a barometer of public opinion such as the New Zealand Herald, a large national newspaper and a reliable provider of advertising space to the Auckland real estate industry. We might expect them to take the razor to proposed plans to pull the bung out of the property market. In that light, a literature review of the past year in news is remarkable:

The New Zealand Herald’s Property Coverage, March 2012-March 2013

Discrete Editorial Pieces Critical of the Implementation of a Capital Gains Tax
17

Discrete Editorial Pieces Critical of Basically Shitting Everywhere
0

 

Lastly, a word on the Chinese home buyer. Our knowledge of him is scant, founded upon apocrypha such as “literally bought 120% of the Auckland residential properties on the market for February with fake money”, “not from around here” and “just not on”. Opposition models of housing market control have even suggested foreigners be banned from buying houses, a policy that appears to foster elements of xenophobia and also assumes a scenario wherin A: a ‘toiletless day’ scheme has not been introduced and B: if it had, individuals coming from overseas would be simply amping to buy a unreconstructed 1920s duplex full of turds.

DSC_00051We found your room.

It is not racist to make a generalisation if it is broadly accurate. Citizens of China, or Australia, or Shania Twain – none of these peoples have the same latent fondness for living in their own filth that New Zealanders can cultivate. It must not be dog-whistle politics that stops a foreign buy-up of our homes, because this means something darker and uglier has won. Instead, it must be an irreconcilable and deeply revolted culture shock.

The family home must of course be excluded. With landlords able to commend their own restraint and settle for a reasonably stable and valuable portfolio that they never, ever want to inspect or view, renters will stop having to chase an ever-receding horizon. Home prices will finally give young buyers time to catch up.

Much millennial angst has been expended on how the ‘boomers’ pulled the property ladder up behind themselves. To blithely restore that ladder would spell catastrophe – but to partly lower it down, sulfurous and slick with effluent, offers both a chance and a healthy compromise for the determined. A modest deposit will in time permeate the roomiest roost, but it shall turn certain financial folly into a modest profit. The housing bubble began with people being individually greedy; it will be survived when individuals choose to be collectively shameless and selfless. Disconnect the plumbing; the future is in your hands starting now. Please don’t forget to wash them.

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