Kupe Street - Heatley's Headache

In New Zealand there has been a nauseous over-reporting in newspapers and the general media about the affordability of housing, particularly in Auckland. Such has led to silly first home buyer subsidies and the like to attract young people into debt they may not be able to manage. During a sortee to the 'hood by a keen local, I was introduced to one of the most affordable streets in Auckland, the average land and buildings on a property worth just $362,000*. Affordable to first home buyers even with moderate incomes.

This is Kupe Street in Orakei.

Here is what the current Minister of Housing had to say about Kupe Street back in 2007:

Housing spokesman Phil Heatley said it was "a joke" that million-dollar state homes could not be sold until the tenants moved out, including $2m properties in Glen Innes and Orakei.

"Any policy to sell these multimillion-dollar state homes when they become vacant is meaningless."

We agree with Phil Heatley circa 2007. When a private owner doesn't pay their mortgage they are booted out by the bank and have to move to lesser surrounds with their children who lose friends and their current schooling. A business person goes under and has to downsize. All very sad but a reality of life. Other people when they change jobs are forced to move cities, I don't see how moving beneficiaries can possibly cause concern given they have absolutely no justification for living in an area so close to the city or work centres, because guess what? They don't work. They don't need to live in expensive areas in close proximity to their work do they?

Phil Heatley was concerned about Kupe Street before he was a Minister.

Yet, take a trip today up Kupe Street and you will see some of the most expensive real estate (land only) sitting under some of the worst kept properties in Auckland with tenants who clearly have no pride in the appearance of their neighbourhood and community.

comes complete with outdoor furniture

You will see what seems to be burnt out P labs with boarded-up windows. And also cruise down the street and find the numerous satellite Sky dishes and the ubiquitous functions tent for fry-ups and parties. Fertile ground for numerous visits at night by Police Helicopters interrupting the peace.


shutters up preparing for Hurricane Heatley?
hot views from top floor


In the interests of fairness and accuracy I did take the step of contacting the Minister's office and Housing New Zealand has this response:

"HNZC has 69 properties in Kupe Street and Ngati Whatua own another 69 (CK - as part of a treaty settlement). In the last 12 months, HNZC have received only two complaints relating to properties they own, one regarding a loud party and the other related to rubbish in the garden and the ownership of an unauthorised dog".

HNZC and the Minister's office were quick to emphasise that they did not own all the homes in the street, therefore it was possible that the homes that captured my attention were Ngati Whatua's. I guess as the neighbours are partying away themselves, there would not be many complaints would there? If living next to that, I would be afraid to complain to anyone about the neighbours' activities for fear of reprisal. Like a brick through the window or a few dents in the car.

friendly Maori independence flag at top left hand corner

cars parked all over property for party

How much are the HNZC properties worth? Well according to HNZC when asked "the average land value of these properties is $292,000 and the average house value is $70,000"*. This being the case even first home buyers could afford a property in this street. I simply don't believe the land valuation method.



Have a look at the view....due to the wideness of the street, even on the right hand side of the street heading to the Point, you could build a two or three storey house to have sweeping views over Auckland.



Why are state housing tenants placed in these properties when the land can be sold at market and the profits used to either relocate them or investigate quite why these families deserve to live in what must be some of Auckland's most expensive land? Phil Heatley campaigned on cleaning up the sad state of affairs. What is he doing about it? Building more houses that's what he is doing. Build more houses and they will come. And come. Rather than re-evaluating the usage and limiting the eligibility they are creating a demand.

If Ngati Whatua own 69 of these homes, most in what can only be described in parts of the street, as slum conditions, then why on earth aren't they being forced by their own people to maximise and distribute profits from this expensive real estate, across their people? Or if they choose to keep such property making the tribe asset rich but cash poor, why can't the taxpayer means-test individual members of that tribe to reflect their true worth when applying for taxpayer benefits?

The history of Orakei and Ngati Whatua is of course controversial and racially very sensitive. In 1952 the Queen's visit was used as an excuse to clean out Okahu village, but it is 2010 and surely we don't need a Royal visit as an excuse to ensure the street is cleaned up, not with a police invasion and arson of course, but some basic pride in maintenance and future planning for development that would assist in increasing the value of HNZC properties.

I will be blunt as someone has to say so, Kupe Street is an assault on the eye. During my quick visit barely warranted cars littered lawns, children played unsupervised dangerously close to the road and one car parked itself smack bang in the middle of the road. At the end of Kupe Street sits an early childhood centre - one of the most expensive in the country with their view, and a retirement home that has been developed by local parties. It is heavily gated in for security and monitored. The kind of place you would threaten to put the mother-in-law if she behaved badly.

The issue being of course is that millionaires who can afford to pay the government true market rates for these sites and then develop them into a beautiful street, do not wish to live in a slum like this and until the street is fully developed and beneficiaries removed, then there is no way I guess that HNZC can get a fair value for the homes on the block. HNZC seems to be stuck between a rock and a hard place. They can't sell the properties for a decent price while Ngati Whatua do nothing with the area, and Ngati Whatua I understand have first right to buy the properties in any instance so have an incentive to keep the values low and drive HNZC out. Little thought appears to have gone into the future planning of the area.

I have no issues with Ngati Whatua's property rights to their 69 houses and am not suggesting taking the homes off them, but what I do have an issue with is the pleading of poverty of groups in society who go cap in hand to other groups in society, when they are asset rich, yet cash poor and are not harvesting maximum potential from those assets and distributing the wealth between otherwise impoverished members of their group. Communal ownership of assets needs to be reflected when means testing the tribe members as a whole. At present they have it both ways, pleading poverty individually while as a function of time and inflation the value of their assets increases.

Prima facie Ngati Whatua can't do a lot with the area because they have no cash or incentives to do so. Or do they not have the cash? This puff piece of reporting suggests otherwise. If so they have no excuse for not cleaning up Kupe Street if Ngati Whatua are doing so well commercially as this piece suggests.

It is one thing that Maori are given land back like this under Treaty settlements. I think most New Zealanders have a reasonable sense of fair play when it comes to settling past grievances and shrugged at the time that with the money and land given that Maori would be self-sufficient and rely less on the taxpayer such that it was a win-win. What New Zealanders find harder to swallow is that Maori and beneficiaries still have their hands out when they are sitting pretty in slum housing on some of the most expensive real estate imaginable. This street and a few surrounding should be of equal value to a Paritai Drive when developed properly. When working New Zealanders are struggling to buy even a modest home in an area with a view backing on to the neighbours fence. Being asset rich and cash poor doesn't actually help anyone, all that is happening is the taxpayer has to front with more cash. That is, taxpayers are paying twice, once for the Treaty settlements and again for maintenance and upkeep of Maori extravagance of tribal ownership and being asset rich and cash poor with a failure to distribute funds to those who need it.

Maori have of course an aversion to sell land as they have a waffly touchy thing about holding it for future generations. Curiously, just like everyone else in New Zealand, and indeed the world. The sad fact is that the current generation of Maori isn't prospering. And despite billions poured into Maori education, health and welfare by net-taxpaying Maori and non-Maori, they are still going backwards. And while welfare agencies keep forking out billions for their underachievement there is absolutely no incentive for Maori to become self-sufficient when Nanny State pays for their worst and poorest.

The net wealth of Maori tribes in New Zealand is simply still not reflected in the success or wealth of their individual people. Waking up with that screaming view of Auckland, why on earth would you want to leave your house as any tenant? Or do anything to lose your eligibility to live there and have to move to a part of town where the "working poor" less privileged by race or luck of the HNZC draw live. Suckers.

The best thing for HNZC (the taxpayer) would be to get together with Ngati Whatua and collectively sell the street to one developer who would then manage the sale and beautification of the street and share the profits with both current landlords. Like what Viaduct Harbour Holdings did to the waterfront area, only freehold title because New Zealanders are (quite rightly) suspicious of leasehold property, given many developments have increased in ground rent such that the tenants' rent barely covers the ground rent let alone the mortgage of the landlord, Ngati Whatua's own developments included. Ngati Whatua start to collect ground rent in this linked development from August 2011. Already apartments in that area have suffered from a range of leaky building (Railway Campus), to terribly incorrect original valuations (The Landings, The Docks, Hudson Brown), massive increases in cost structure could just about kill it off as the whole development down there is starting to look like Joel Monaghan with a Labrador.

futile attempt at development

At present Kupe Street, like many areas full of a bad mix of Maori and State housing, sits as part of the problem in New Zealand, not the solution. The problem seems not one of resources as there are plenty of resources, that is a fact, but resource allocation and common sense.

It's all very well and good to say that these tenants have an entitlement to live in potentially one of the most expensive areas of Auckland, but at a practical level it doesn't make sense and it doesn't send the right signals to those hard-working Maori and non-Maori New Zealanders paying for the extravagence of excessively generous State Housing and welfare benefits for life.