NEO-LIBERAL ZOMBIES, THE MISSING MIDDLE, AND THE THIRD SECTOR

FOREWORD

In 1842, at just 21 years old, Friedrich Engels was dispatched from Germany to Manchester in England by his industrialist father to study the latest factory management systems of the time — essentially how to extract maximum value from low wage labour. From a family business succession perspective it was a spectacular failure. The shocking working conditions he saw set the scene for a lifetime of intellectual musings on society including his famous collaborations with Karl Marx. Engels also had a lot to say on poor housing conditions and proposed solutions — a hot topic in Europe in the mid to late 1800s — and his views were published in a series titled ‘The Housing Question’ in Der Volksstaat’ between 1872 and 1873. Engels didn’t see a ‘housing crisis’. Rather he saw a ‘crisis of capitalism’. Fast-forward to New Zealand in the 21st Century and the same ideological ghosts hauntingly stalk the corridors of our political institutions. The stark reality of free-market thinking and laissez-faire government is evident in OECD housing data for the period 2000-2023 which positions our performance on prices, affordability and overburden costs amongst the worst in the world. ‘Quick-fix’ type policy favouring greenfield and suburban infill development to build lower density mainly market-priced housing has failed to produce improved, socially-diffuse, housing affordability. What it has ushered in is market instability, a boom in ‘for-profit’ residential investment property, rapid price and rent growth and expensive housing — especially for lower income households. Our politicians on the right (and the left) resemble zombies stuck on the road to nowhere — caught  in the headlights of a neo-liberal theocracy and unable to move forward or even back to the time when our collective social conscience was still alive and well. It ends badly. What is very clear is that we’re never going to subdivide our way to better housing outcomes — only social inequality. Equally clear, based on research of approaches taken by countries achieving better market stability and improved and more socially-diffuse housing outcomes, is that we will need; a pan-political modus vivendi, spatial planning and housing law and policy focused on improved housing outcomes not growth, state and municipal actors proactively involved, and, in particular, low-cost funding and guarantee tools and low-cost land opportunities for not-for-profit housing actors. This book reveals that third sector housing policy interventions facilitated via dedicated state and municipal institutions and tools have made a positive contribution to improved and socially-diffuse housing outcomes and market stability in those countries where not-for-profit public and private housing forms a major part of total housing stock. Not-for-profit housing systems and actors — the ‘third sector’ — follow social (rather than commercial) imperatives and require tenure (whether ownership or rental) to be based on cost (not market price), with surpluses reinvested into new affordable housing developments through revolving fund type mechanisms. They often prioritise low to middle income segments of the market, referred to as the ‘missing middle’, overlooked by the state and for-profit developers. Housing interventions focused on facilitating this ‘third sector’ have been shown to widen access to low-cost capital and land development opportunities, lower upfront and ongoing housing costs (including in the non-regulated for-profit sector) and improve housing quality. We can do the same if we just step off the neo-liberal road to nowhere.

2026 © Níall Mayson