Bob Jones on Housing

In this opinion piece on Auckland house prices, Bob Jones spouts so many logical errors that I hardly know where to begin.

He starts here with a reducto ad absurdum argument about banning private landlords:

First, if Auckland's housing woes can in part be laid at the door of residential investors as alleged, simply ban them.

Having set up his absurd straw man, he then uses it to argue against regulation of landlords. Presumably, he doesn't like the idea of a warrant of fitness for rentals, or any other measure that is intended to improve the health and future prospects of New Zealand children.

He follows this with a fine example of ducking the point that he himself brought up:

Another foolish cry is that landlords buying houses drive up prices. As they buy to rent and will stop abruptly if the tenancy demand dries up, that argument is not very logical. Lately, world-class foolishness has been on display with the "unfair" claims that a landlord can deduct his mortgage interest while an owner-occupier cannot.

The point is that a landlord, as a business owner, can deduct mortgage interest payments. This gives them more money to bid on a residential property, which allows them to force genuine home-seekers out of the market. In other words, it allows the wealthy to lock the less-wealthy out of home-ownership. This is not only unfair, it concentrates more wealth in the hands of fewer people.

Then, there's his willful blindness to fact:

We're also hearing nonsense about foreigners driving up prices by buying up Auckland's housing stock. Really! So where are the tens of thousands of unoccupied residences?

Some sources say that 11% of Auckland houses are owned by non-residents. Obviously, they are rented out. Thus, the rent money is going overseas, minus the small amount going on property management fees. So foreign ownership of residential property not only drives up house prices, it exports the value of those properties, depriving New Zealand of the money spent on rent.

 Jones then pontificates about the perfection of the market system for solving problems.

If the market was perfect, this mess wouldn't have come about to begin with! House prices are so high now that many people in their 30's and younger will never be able to own their own home. Rents are getting so high (to cover the mortgage payments of serial investors) that people are living on the street, or having to cram four or five or more people into a two-bedroom apartment.

The market cares about making rich people richer. That is all. It doesn't care about people having a home, about kids having a warm and dry place to sleep, or about anyone else having a life less than slavery.

Residential property investment does not create wealth, it only concentrates more of it in the hands of the already wealthy. Bob Jones should know that.