How to start a myth: the housing market edition
Had you noticed that Bill English has successfully initiated the myth that the fault of failing to supply affordable housing is not the government’s for anti-development planning rules and gold-plated building regulations—not councils’ for their development levies and interminably delayed consent processing—not planners for ring-fencing cities and imposing their own values on home-owners—not the Reserve Bank’s for pumping out all the counterfeit capital that spills over into the housing market because of their rules favouring mortgage lending over business lending—the failure, says the myth, is a failure of the market.
A “market failure” that only government intervention can fix.
So goes the myth.
I heard it again this morning on State Radio: New Zealand needs 10,000 houses per year said the commentator, and the market only builds 4,000. This is market failure, he said—failing to praise the market for managing to produce anything at all in the face of all the hurdles in front of them.
So is this really a market failure?
YEs, it’s s failure. But no, it’s not a market failure.
If it is, it’s a “market failure” only in the sense indicated by this cartoon:
UPDATE: A friend has given the cartoon the local context (thanks Paul):