Increasing the supply of housing is only part of the solution. Demand needs to be shored up. That means changing incentives so that wage earners can compete with investors.

When run down villas in Sandringham are fetching up to a $1 million, the average family can't afford to buy the average house.

 Here are two things that the problem of affordability isn't:

It's not a problem of not enough houses being built in the wops. People want to live where they work and play. 

It's not a problem of urban density. Planners have a habit of solving the problem of where they want families to live, instead of solving the problem of helping families live where they want to live. I've tried to raise a family in an apartment, and let me assure you, the suburban back yard is an easier place to hone youthful football skills.

Building on new land and promoting urban density might assist affordability a bit, but they're not really the core problem: average families are being priced out of the market by people who are buying houses as an investment instead of as a place to live.

Those investors and speculators are paying house prices that the rental yield can't justify. They are driving up prices in anticipation that prices will keep rising. The more people believe prices will keep rising, the more the asset prices will rise, leading more people to believe they will keep on rising. And so on. In a long recession, where interest rates are low because the economy is not growing, asset price bubbles grow faster - yes really; a couple of the stock market's record years were during the Great Depression.

Investors are capitalising tax free future income to bid against people who pay mortgages out of their tax paid income. Wage earners can't possibly win.

If you have a lot of capital wealth then you will be able to pay more today in expectation of your future capital gain than a person who has to borrow most of their deposit. You might leverage 100% of the cost of your fifth house, or even 120%, if you own the first four outright and you think the value will rise 30% in the next couple of years. But good luck getting a bank to lend to you 100% of the purchase price if you don't already own dirt.

A capital gains tax that restrained investment housing would help. It's not enough on its own. 

We need to do more to help people who don't have lots of savings and give them a leg up compared to people who already have their own substantial savings.

We also need to see a stronger relationship between incomes and the cost of living. This means ordinary incomes need to be high enough to afford ordinary homes - and high enough is a relative term relative not just to house prices today but to the wealth of investors they are bidding against. When a few people own most of the wealth, most people won't be able to afford a house.

For the last five years (actually for nearly thirty years, except for a gap when Michael Cullen was finance minister) the share of national income going to people who earn wages has been falling. Therefore, the cost of buying a home for people who earn wages has been becoming more unaffordable. Unaffordable housing and a low wage economy are the same thing.

If you're for a unequal New Zealand, for massive wealth disparities, and against a capital gains tax, then you are also against helping young families achieve a home of their own. If the idea that the average family can't afford a home of their own makes you uncomfortable, then you need to follow the logic through the tax system and higher wages.

The government's tweaking round the edges of the RMA might speed up building consents, but will do little to make sure those nice new houses are affordable for the families who earn wages if their wages are falling as a share of national income.