Tuesday, April 18, 2017

Moving into Home Ownership has Social, Health, and Economic Benefits

This article made me laugh:

“MOVING INTO HOME OWNERSHIP HAS SOCIAL, HEALTH AND ECONOMIC BENEFITS

“Getting lower-income families into home ownership won't just ease the housing crisis – it will have social, health and economic benefits across the board, new research says. Modelling done by economic research firm BERL  for the foundation also shows moving renters into homes could save the government millions in hospital, jail and welfare bills, while boosting jobs and the tax take.  Moving 1000 social housing renters into home ownership could produce a net fiscal saving of $11.1 million over 15 years, BERL's data shows.“
http://www.radionz.co.nz/news/national/328722/better-access-to-home-ownership-%27could-save-nz-millions%27  12 April

Don't get me wrong, I'm all for improvements to society, health, and the economy, as well as the environment for that matter.

But, that’s saving 1000 people $2 per day?  ($11.1mil/1000people/15 years/365 days).  I think finding loose change down the back of the couch could make just as much.  I’m not sure how much home maintenance could be done with couch detritus, so for some people owning a home would be a backwards step financially.  Maybe it would suit those who don’t believe they could own a house, but would make an effort if they already had one?  How do you find such people for this?  My feeling is other people would react a bit like the family in Million Dollar Baby when 'given' a house - they'd moan about the expenses, and not appreciate the benefits.

There is plenty of data that shows that renting is often cheaper than owning, and any new home owner will tell you the same once their first maintenance bill arises.  Houses can be scarily expensive to maintain.  Most properties have some 'deferred maintenance' as few ever fixes something the moment it breaks, for time, money, or 'it's not important' reasons.  If we are talking about psychological improvement homeowners enjoy, then yes, I think home owners usually have a stronger sense of permanence and security in their community.  They also have the stress of bills and greater responsibility. But that attitude of permanence and security isn't exclusively the realm of home owners, plenty of tenants have long tenure and love the location of their home.  The flipside? Other people love they can step in or out of a community easily as they don't have the hassle of 'what to do with their property when they go'.  Three weeks notice and it becomes a memory.

And if that ‘good for everyone’ figure is used and NZ’s population is assessed for net benefit, wow, we save cents per person with this analysis.  It surely won’t cost more than 5 cents per member of population to get 1000 people (or is that ‘families)  into a new home, will it?  Surely??  (Let me see, $350,000 say per home, x 1000 /4.5 million Kiwis =  $77 per Kiwi, yeah, that's about the same as 5 cents).  

I think there may be more cost effective ways of achieving this benefit.  I just loathe 'poor' reporting beating up a story without checking facts, or doing simple math.  No wonder we as a nation are in such dire straits financially.

Is anyone bothering to do the math?  Always question what you read, including this statement of my own opinion!