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Is this the coolest idea to help with housing crisis?

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  • Is this the coolest idea to help with housing crisis?

    The winner of our recent facebook competition on the housing crisis, had this unique and smart idea. "Don't let businesses operate out of residential properties!". In Hamilton for example there is a huge number accountants, lawyers, doctors and other small businesses that own or rent a residential property to use for their business. In a relatively short period if all of these properties were available for families, this could have a huge impact on the housing crisis. Perhaps bringing down house prices and stopping rents jumping so quickly. It might sound hash on the small businesses, but in a lot of the country there is a lot of empty commercial space that could be better utilised. Also the majority of these businesses could operate just as well from a commercial property.


    What do you think?


    Ross
    Book a free chat here
    Ross Barnett - Property Accountant

  • #2
    on parnell rise

    there is a very old historic house

    it was recently sold, for squllions, and NO WAY was it allowed to be knocked down

    i think the nz olympic association now operate out of it

    not sure it would suit a family...

    lots of similar along ponsonby road

    no doubt wellington too
    Last edited by eri; 04-04-2018, 07:34 PM.
    have you defeated them?
    your demons

    Comment


    • #3
      I think a lot of Parnell Rise and Ponsonby road would be zoned for commerical/retail properties.

      So it is businesses operating out of a residential property, in a residential area.

      Ross
      Book a free chat here
      Ross Barnett - Property Accountant

      Comment


      • #4
        so you're saying

        businesses shouldn't work out of residences in residential areas?

        my cousin is currently telecommuting, working-from-home

        in their caravan

        while here husband rips the walls out of their house

        which was turned into a meth-lab by their renters

        while they were away working on a farming contract that provided a house

        as a liberal

        i believe the gov.

        shouldn't get in the way

        of people trying to support themselves
        have you defeated them?
        your demons

        Comment


        • #5
          I think it's obscene. so many small businesses go to the wall as it is, if they can get started out of a residential property legally and keep costs down good on them. What are we, North Korea?

          Comment


          • #6
            Originally posted by fuzzlevalve View Post
            I think it's obscene. so many small businesses go to the wall as it is, if they can get started out of a residential property legally and keep costs down good on them. What are we, North Korea?
            we do have a communist guvvmnt

            Comment


            • #7
              I guess my shock is that Rosco would think it an award winning idea. Unbelievable.

              Comment


              • #8
                I think it is a smart idea,
                - commercial costs are often not that different to residential for a small business. Also can often share toilets, kitchen and other spaces with other small businesses. Plus can lead to efficiencies, by forcing the use of less space.
                - This could happen quicker as the houses are already built
                - A lot of the businesses I see operating out of residential properties in residential areas are not struggling. They are doctors, lawyers, accountants, mortgage brokers, architects, property managers, dentists, other medical professionals.
                - Why are offices allowed in residential area's? A lot of district plans don't allow it anymore, but offices have slipped through in the past, so now can stay their with existing use rights.

                Obviously the idea would need to be worked through further as dairy's, takeaways and some other businesses need to operate in residential. Plus the person using one room of their personal house.

                I believe that out of the box idea's need to be looked at. This isn't my idea and I'll post mine in a few days, but I do think that this idea could help ease housing problems.

                Otherwise what smart ideas do you actually see the government doing to help with housing issues?
                a) build 100,000 new homes - yet none have been done so far. Who really see's this happening in a reasonable timeframe?
                b) Bash landlords at every opportunity - I see this as driving landlords out of the market, and thereby creating an even bigger issue. Less houses to rent, less new rentals being developed or built = higher rent and harder for families to find a home. Higher rents sound great to landlords but is this really great for NZ long term. Higher rents would probably need more government spending or debt, that leads to more taxes needed.
                c) What else? I see a lot of talk but no action from the government or anyone else. And no real solutions, especially short term.

                Ross
                Book a free chat here
                Ross Barnett - Property Accountant

                Comment


                • #9
                  What would be smart is to reduce the parasitic load on developments.
                  56% of cost to build is tax & bureaucracy according to Guvmnt department!
                  Easily trimmed back with rule changes. No physical impediments - just dumb laws to change.

                  Also providing residential rentals is not a great business - the returns are low and the customers often unpleasant.
                  This is why all the incentives like depreciation, tax deductions, etc have arisen.
                  The ongoing removal of these incentives has reduced supply and pushed rents up.
                  What's easier to stomach - low tax/low rents or high taxes with high rents?
                  The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

                  Comment


                  • #10
                    I think while land should be considered a limited resource I can’t see why a house should be treated any differently than any other product that people own. There is theoretically no limit to the number that can be built. Supermarkets don’t get the same vitriol directed at them because food is expensive and they aren’t expected to sell it at a loss just because it is a necessity of life. Or petrol, or electricity although there are a few energy activists out there too.
                    LAJ

                    Comment


                    • #11
                      Ideas that I have had (which I sent to Nick Smith) are:

                      Look at the number of bedrooms say in Auckland and the number required. Is there a shortage of bedrooms if people are redistributed into houses that fit them?
                      Provide support, incentives, to elderly wanting to downsize into a smaller units and out of large homes. Eg pay something towards moving costs (or loan against sale price) help to clean and manage the selling process etc. once people get to a certain age it is all too hard and family may not be available to help even though elderly person may want to move.

                      Bring back leasehold land but with tenant friendly lease terms. Personally I think the way forward is for the government to begin to buy land and lease it out if they really want to control prices. At least for first homes the government could build smallish bedsits, sell the building to first home buyers, lease the land to the tenant at say 3-4% pa, annual CPI linked rent increase. The money for the land could be raised by issuing indexed linked bonds, or put into a unit trust and it could be a good product for inflation linked capital and income which might appeal to landlords who are wanting to exit hands on rental management but still stay in property. these small homes could be less than half the price of current first homes as land isn’t included so people could pay them off quite quickly then on sell to get a deposit for their next home.

                      Comment


                      • #12
                        Originally posted by Rosco View Post
                        Otherwise what smart ideas do you actually see the government doing to help with housing issues?
                        Governments don't have smart ideas, because all the wrong people get voted in there. The only thing likely to be considered a smart idea would be a scheme to help ensure re-election.

                        I think the idea that all small businesses presently operating from home should have their costs increased almost qualifies Ross to run for parliament.
                        Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

                        Comment


                        • #13
                          Originally posted by Perry View Post
                          I think the idea that all small businesses presently operating from home should have their costs increased almost qualifies Ross to run for parliament.
                          Hi Perry,

                          1) Not all small businesses operate from residential properties in residential areas
                          2) Have you actually compared the costs? Of a small business operating in a residential area in a residential house, vs a commercial one?

                          Ross
                          Book a free chat here
                          Ross Barnett - Property Accountant

                          Comment


                          • #14
                            It likely depends on whether or not the residence was dual purpose.
                            Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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                            • #15
                              My ideas:

                              1) Stop immigration. Make it zero for a while. Then put it at a sensible level once we catch up with houses and infrastructure.

                              2) Remove council red tape. No more delays. No development contributions, infrastructure growth charges or any of that BS.
                              Squadly dinky do!

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