I’ve written several blog posts talking about challenges facing local democracy and consultation processes. This is an important issue. Harvard economists Daron Acemoglu and James Robinson make a convincing argument that inclusive political institutions, such as broad electoral franchises and transparent policy processes, are the essential element for countries’ long-term economic and social success. Governments that listen to their citizens are better at delivering higher levels of wellbeing. Governments that don’t are seldom awesome.
Consequently, it’s worth paying close attention to the details of democratic and consultative processes. When they are done well, they can provide valuable insight into people’s needs and preferences. But when done badly, they may instead provide avenues for narrow-minded minorities to hijack the policy process.
One challenge in developing a better understanding of people’s values is there is relatively little opinion polling on a lot of major policy issues. This can leave politicians to make policy in a bit of an information void, relying upon anecdotes and comments from people who choose to call or write them. This anecdata might be representative of the general public sentiment… but then again, it might not be.
With that in mind, it was interesting to see the results of two new polls released in the last week.
The first was commissioned by The Spinoff as part of its coverage of the Unitary Plan decision and Auckland’s local government elections. They asked a representative sample of Aucklanders how they felt about the Unitary Plan:
The Unitary Plan, which The Spinoff and others have been banging on about recently, was signed off by Auckland Council with a surprising lack of rowdy opposition last week. It turns out our newly reformed pro-density politicians were channelling the views of Aucklanders at large, with more than a stonking 85% of those who expressed a view broadly supporting the plan – albeit most with some reservations – in an SSI poll for the Spinoff, commissioned with Jennings Murphy.
Asked, “Do you broadly agree with Auckland’s Unitary Plan and its plan to allow for 422,000 new homes in the city over the next 25 years?”, 19.1% of respondents chose the option “yes, great idea” and 55.8% “yes, but have some reservations”. Just 12.4% answered “no” and 12.8% said “don’t know”.
This is a big result. It follows four years of public and sometimes acrimonious debate about the ultimate shape of the plan. What we seem to have got out the end is a planning rulebook that will make a useful contribution to allowing Auckland to build more homes to meet the current shortfall and future growth… and a fair degree of public consensus that doing so is a good thing.
The second poll, which Bernard Hickey reported on Interest.co.nz, asked New Zealanders whether they’d like to see house prices rise, flatten, or fall. The result was resoundingly in favour of lower house prices:
In news that counters assumptions about home owners opposing falling house prices, an opinion poll conducted by UMR has found 60% of Aucklanders and 55% of home owners would prefer that house prices either fell a bit or fell dramatically over the next year.
The poll of 1,000 New Zealanders over the age of 18 was taken from July 29 to August 17 through UMR’s online omnibus survey and found a total of 63% who would either prefer house prices to ‘fall but not too much’ (37%) or to fall dramatically (26%).
UMR, which conducts polls for the Labour Party, found 55% of home owners would prefer house prices to fall a bit (40%) or dramatically (15%).
The poll found 14% of respondents preferred house prices either kept rising rapidly (4%) or at a slower pace (14%), while 17% of Aucklanders wanted house prices to keep rising rapidly (4%) or at a slower pace (13%). A total of 15% of home owners wanted house prices to rise rapidly (2%) or at a slower pace (13%). There were 633 home owners and 331 Aucklanders in the poll of 1,000 respondents.
The poll also asked if there was a housing crisis at the moment and found that 81% of all respondents and 85% of Aucklanders thought there was a crisis, while 79% of home owners thought there was housing crisis. Fourteen per cent of those polled thought there was no crisis and 5% were unsure.
This is a fascinating result. There’s a high degree of consensus that high house prices are currently a major problem (“crisis!”) and broad, although not universal, agreement that they should be lower.
In July, former Reserve Bank chair Arthur Grimes caused a stir by suggesting that we should build a lot more homes in Auckland to cut prices by around 40%. (Remember: real house prices fell by around 40% in the 1970s, after rising rapidly due to a confluence of supply and demand factors. So Grimes is not arguing for something that has never happened before.)
Prime Minister John Key’s response was a bit skeptical… but possibly not very much in touch with the public perception:
“I think it is crazy. Go and ask the average Aucklander who has got a mortgage with a bank if they want to see 40 per cent of their equity disappear.”
Now, it’s one thing to want house prices to be lower in the abstract, and another thing for the value of your own home to fall. So if prices actually started dropping, people might not be so enthused about the outcomes. (Especially if the flow-on effects on consumer confidence and construction activity led to a recession.) But I think we can conclude that:
- New Zealanders are worried about high housing costs, and their ill effects on young people and low-income households
- Policies that enable more housing to get built are popular
- People don’t think current high prices are a good thing and would like to see them change.
This is a good thing: there is public support for solving New Zealand’s housing affordability problems. In a democratic political system, this should translate into policies that better reflect our values. Reasons for optimism…