Archive | Housing

Housing taskforce report conclusion: Not fit for purpose

Nice to go into booklet publishing, but where do these hefty documents get Auckland Council?

Mayor Phil Goff presented the 47-page work of his taskforce on housing on Monday, just 18 months after former council chief economist Chris Parker wrote his 86-page tome that put Auckland’s housing issues into an economic context and proposed policy interventions.

One feature of the taskforce report is an intention to investigate capturing value uplift. Mr Parker wrote in his December 2015 report: “Upzoning itself is not value-adding; rather, it is the cessation of value restriction.” He believed the council should, instead, focus on using targeted rates to capture the benefits of improvements to fund infrastructure.

Along with development contributions (based on cost of infrastructure), targeted rates are a consideration in the taskforce report – except that the reference is generally to “targeted ‘value capture’ rates”, which is a combination of 2 different concepts. The council sets some targeted rates now for an area seen to be benefiting from specific work.

Value capture is a tax on the windfall from rezoning or development – such as rezoning large swathes of suburban Auckland to enable more intensive residential development, and the new unitary plan has done that, or construction of a railway station, around which other parties will see the potential to make gains from consequent development, and that was happening down on Albert St, below the mayor’s window as he presented the taskforce report on Monday.

I asked Mr Goff why the council would investigate a concept it had steadfastly refused to implement in its first 6 years of existence (before his term began), and he gave a long response but didn’t answer the question.

A baffling failure

This failure to not just investigate how to extract a return from others’ windfall gains from the council’s work but to get on with extracting it baffles me, because in Auckland Council & Auckland Transport’s cost:benefit analysis of the city rail link, it was the value of development around these new stations that would make the whole project viable.

The Ministry of Transport, on the other hand, ignored these obviously beneficial consequences of the $3 billion-or-so rail project, and thereby produced a much more marginal benefit analysis.

Equally, there has been scope to extract a share of the windfall from changing suburban zones to enable intensification. Go to any auction since the unitary plan’s approval (and most of it is now approved), and you will see what “the market” thinks of the upzoning: a windfall to be shared between vendor & investor, where the investor looks at perhaps building 4 units on a section where a solitary house now stands.

The fact that this change is already well underway – you will see change occurring in every suburb if the Reserve Bank & the out-of-step Australian banks don’t block investors from transforming properties – was missing from the taskforce report, as far as I could see.

Industry players – private & public sector – were focused on stated overall shortfalls of housing, how to fill in a big picture of required infrastructure if a lot of new development is on greenfields, how to encourage big builders and advantage them, and how to speed up (which doesn’t necessarily mean improve) the bureaucratic processes.

Congestion charging

I’ll address one other point in the taskforce report in today’s story: transport infrastructure funding & congestion pricing.

Traffic congestion has been building steadily since New Zealanders started importing second-hand cars from Japan in the early 1980s, so we’ve had nearly 4 decades to work out how to deal with an obvious problem.

Most people who work go to one place for the day to do it and don’t need their own car. They (I) use it for convenience, but incur large costs in doing so: fuel, car wear, parking. In property transaction items, I keep citing parking provision in North Shore business areas as an example of a disparity which encourages single-occupant private car use – a cost of perhaps $10-20/week to park in an area like Rosedale, against $80-100/week to park for the day in a city centre parking building. Many of those parking building charges will be met by an employer, again encouraging private car use – and congestion.

The wrong answer

The taskforce report stumbled on the problem and went to the wrong answer: “Transport infrastructure is the primary challenge. According to the Auckland transport alignment project, Auckland needs to spend $23.7 billion on transport over the next decade, against an expected $19.8 billion from existing funding sources. This amounts to a deficit of $400 million/year.

“Transport funding is constrained in significant part because it is difficult to recoup the full cost of new infrastructure from users.

“Development contributions recover some transport infrastructure costs, but it is difficult to determine which parts of the network new residents will actually use.

“Similarly, toll roads rarely make enough money to cover their full costs as users often have the option to take untolled alternative routes.

“Congestion pricing has been identified by the Auckland transport alignment project as a potential opportunity to overcome this issue, as it will better manage peak transport demands and provide an automatic funding source for upgrading busy routes.”

From this answer, you can see the thinking goes like this: We need more roads, more lanes, tolls priced to peaks & troughs will force commuters to vary their work hours but that’s their problem…

Options to progress

Instead? Encourage more business operations outside the city centre, provide more varied communal transport (it needn’t be ‘public’ as in the provider) and particularly at start points, carry on improving the rail network, provide more amenities in those transport options, price travel to shift people out of cars (even at a loss on the fare, that kind of change would save millions of dollars in congestion, road construction, car ownership & maintenance in a short time).

Those are all options the taskforce might have considered.

In sum:

  • You will see from individuals picking up opportunities to build in suburbia that more housing will be built by a multitude of builders and the housing deficit will shrink
  • As the windfall from section sales reduces through competition, residential development costs can be shrunk (as the whole cost is based on the initial land value) but construction will continue because there is still scope for profit from the reduced input
  • You will see, if the right encouragement is given, more business conducted in suburbia, more communal transport, less congestion, an economy spread more widely
  • And when windfall taxes are judiciously applied, development will still occur at hotspots while at least some of the new infrastructure is paid for by new levies.

The $400 million/year shortfall should be regarded as a myth and the focus should go on alternative solutions (but not on the alternative solutions under the Building Code, mentioned in the taskforce report and a topic that needs discussing at a later date).

Links:
12 June 2017: Mayoral housing taskforce report
30 September 2015, Council chief economist Chris Parker, Housing supply, choice & affordability:
Chief economist’s paper
Chief economist delves into Auckland housing
Action on price-to-income ratio the key issue for housing affordability, says chief economist
In depth: What’s fuelling Auckland’s house prices?

Earlier story:
2 October 2015: Council economist lists potential housing price solutions

Attribution: Taskforce report & presentation, Parker report & interview.

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Report out today from mayor’s housing taskforce

Auckland mayor Phil Goff releases the report today of the housing taskforce he appointed in February.

In a release, he said it would make a raft of recommendations to address Auckland’s housing market.

The taskforce brought together people from the public & private sectors with a diverse range of expertise “to identify barriers & constraints to building more homes in Auckland at a pace & scale which meets the demand created by population growth, and to identify options and make recommendations to overcome those barriers & constraints”.

Link:
20 February 2017: Mayoral housing taskforce meets to tackle housing supply

Attribution: Mayoral release.

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Ngai Tahu Property secures another 2ha at Hobsonville Pt

Ngai Tahu Property Ltd has entered into a development agreement to build over 200 homes on 2ha at Hobsonville Point, one of the last undeveloped sites in the masterplanned community at the top of the Waitemata Harbour.

The newest acquisition resulted from an expression of interest process HLC Ltd (formerly the Hobsonville Land Co Ltd) conducted late last year. Ngai Tahu Property chief executive David Kennedy said yesterday it effectively doubles the size of the Kerepeti development, which will now deliver 417 homes over a combined 4ha.

The new site will contain a mix of apartments, terraced homes & walk-up apartments.

Based on a masterplan by Isthmus Group, the homes will be delivered in 4 stages. The first stage will contain 27 2½- & 3-bedroom terraces and 9 1½- & 2-bedroom walk-ups.

Mr Kennedy said 30% of the homes would be priced in keeping with Hobsonville Point’s Axis affordable homes programme.

Ngai Tahu Property is already developing 2 sites at Hobsonville Point through a consortium with the NZ Super Fund & New Ground Capital Ltd, but Ngai Tahu Property is undertaking this project on its own. The first homes on the consortium’s 2 sites, Uku & Kerewhenua, are due for completion early next year and will be available for sale off the plan from September through Colliers.

Ngai Tahu’s 3 development sites – 2 as part of a consortium.

Mr Kennedy said most of the homes in the new development would be available for sale as they are developed but, as with the accessible philosophy for the Kerepeti development as a whole, a portion will be retained and made available as long-term rental properties to be managed by New Ground Capital.

“We are committed to delivering attractive & functional homes that are in keeping with the fantastic location. All of the sites deliver a strong, connected community that adds to and benefits from the great levels of amenity that have made Hobsonville Point one of the most desirable new places to live in Auckland.”

HLC chief executive Chris Aiken said Ngai Tahu Property had demonstrated that developers can combine quality urban design, affordable housing & sound commercial returns working in partnership with the Government-owned HLC.

Earlier story:
5 May 2017: Construction starts on Ngai Tahu subdivision at Hobsonville Pt

Attribution: Company release.

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Construction starts on Ngai Tahu subdivision at Hobsonville Pt

Construction has started on Ngai Tahu’s innovative new residential development for Hobsonville Point that includes a number of long-term rentals.

It’s funded by the NZ Super Fund, Ngai Tahu Property Ltd & New Ground Capital Ltd.

The 208-home development on the former Defence Force base at the top of the Waitemata Harbour, announced in December 2015, was the initial step for Ngai Tahu Property into the Auckland market and is the first direct property investment for the NZ Super Fund.  First homes in the development will be on sale off the plans from September and the whole development is due to be completed by the end of 2018.

The Ngai Tahu development, now known as Kerepeti, covers 2 1ha superlot sites called Kerewhenua (111 homes) & Uku (97 homes).

The NZ Super Fund & Ngai Tahu Property are investing 48% each of the capital required for the development, and New Ground Capital is contributing the remaining 4%.

Each superlot will consist of a mix of apartments, terrace homes & walk-up apartments based on a masterplan by Context architects. They’ll be built by 4 local building companies – Classic Builders Ltd and Naylor Love Ltd (Kerewhenua) and Jalcon Homes Ltd & Haydn & Rollet Ltd (Uku).

About 50% of the 1- to 4-bedroom properties will be priced under the Auckland median house price and 30% will be priced in keeping with the Hobsonville Point affordable homes Axis programme.

About three-quarters of the homes will be available for sale as they are developed, but 47 are to be retained and made available as long-term rental properties to be managed by New Ground Capital, which was set up in 2014 to develop a long-term rental portfolio.

Anyone can apply to rent one of these homes once completed, with lease terms of up to 7 years to provide security of tenure, while still allowing leaseholders to shorten their lease should their circumstances change.

Ngai Tahu Property chief executive David Kennedy said: “The shared vision for this development was to ensure public & iwi funds are reinvested into infrastructure for the long-term benefit of New Zealanders – those who live there and the investors themselves.

“With building of terrace homes and early foundation works for the apartments now starting on both of the superlot sites, we are on the way to ensuring a broader section of the market, be they renter or homeowner, can have a quality place to live and enjoy access to all the amenities & lifestyle on offer at Hobsonville Point.

“We expect the new long-term rental properties to be listed on www.newgroundliving.co.nz in the third quarter of this year.”

Links:

Ngai Tahu Property 
www.ngaitahuproperty.co.nz
NZ Super Fund
www.nzsuperfund.co.nz
New Ground Capital
http://www.newground.co.nz
New Ground Living
www.newgroundliving.co.nz

Attribution: Company release.

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Corrected: Shenzhen developer launches first Auckland project at Hobsonville

Published & corrected 24 April 2017
Chinese developer Far East said on Friday it would build 39 terraced homes in the first stage of its 150-home Hobson Quarter development (pictured) between the Hobsonville village shops and the Upper Harbour Motorway, called Q|One. [Corrected: Originally I wrote that this development was at Hobsonville Point.]

Far East has also bought a 3406m2 site next to the Westfield Mall at Albany for over 200 apartments on 18 storeys in 2 buildings, plus retail & parking facilities.

The developer is part of the privately owned JiaHe JianAn Group, which has built about 7000 apartments in a decade in Shenzhen, China, and expanded into Australia in 2013.

Its Australia subsidiary, Zone Q Investments Pty Ltd, entered the Perth market first with an $A100 million apartment & commercial project overlooking the Swan River. It now has 4 Perth residential projects & one commercial property there, and bought in Sydney in December. It has the Aqualuna apartment development planned for a waterfront Milsons Point site and has also bought land in the north-western suburb of Cherrybrook, 30km from the Sydney cbd.

In New Zealand, Far East has an anticipated $300 million pipeline of residential & commercial projects. At Hobson Quarter, it’s working with Kate Roach Architecture & Design, which has studios in Melbourne & Auckland, and Greenstone Group Ltd for project management.

Marketing manager Daniel Zou said Far East had also identified other potential development sites in Auckland & Wellington, including prime office buildings. He said the move into New Zealand was a natural one as Kiwis began to consider a wider range of housing options in a tighter market.

“We spent a long time analysing the New Zealand market to determine the developments that would best suit local demand. We built an Auckland-based team and have partnered with well-known, respected local companies to develop homes tailored to the Kiwi lifestyle.

“We firmly believe that every property development needs to suit each community’s needs and Q|One is the epitome of this – higher density living that supports Auckland’s growing population, while still embracing New Zealanders’ love of large homes with generous outdoor spaces.”

Pre-sales for Q|One are underway through Bayleys Realty Group and construction is scheduled for completion in late 2018.

Links: Hobson Quarter
http://hobsonquarter.co.nz/
Zone Q
http://zoneq.com.au
Kate Roach Architecture & Design
http://www.kateroach.com.au/

Attribution: Company release.

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Council-Selwyn housing joint venture to start in July

The housing for older people limited partnership between the Selwyn Foundation charitable trust & Auckland Council has changed its name, confirmed the appointments to the board of its general partner and appointed a general manager.

The limited partnership will take over operations of the council’s Housing for Older People portfolio on 1 July.

The limited partnership, formed in December 2016 as the HFOP LP, has been renamed the Haumaru Housing LP, and its general partner Haumaru Auckland Ltd.

Its role will be to undertake comprehensive tenancy & asset management services associated with the council’s stock of 1452 rental units for senior citizens, which are in villages in south, north & west Auckland. 1412 are existing & 40 are committed to being built in Wilsher Village in Henderson.

As a 51% shareholder, the Selwyn Foundation has appointed 3 directors – Selwyn board members Helen Melrose (who will be chair) & Vicki Sykes, and Selwyn chief executive Garry Smith. Auckland Council has appointed Matthew Harker & Kerry Hitchcock following an external selection process.

Gabby Clezy.

The board has appointed Gabby Clezy as the partnership’s general manager. Ms Clezy has been chief executive of aged residential care service provider TerraNova Homes & Care Ltd since 2014 and has extensive leadership & operational experience in social services & aged care in the UK & New Zealand. She’s worked for not-for-profit organisations in the healthcare arena, such as Bupa Care Services and specialist addictions mental health trust Odyssey House, and has also held senior roles in the UK tertiary education & national health sectors.

Attribution: Joint release.

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Avanda wins Airfields stage 2 development

Auckland Council company Panuku Development Auckland has confirmed Chinese-owned Avanda Ltd as the housing developer for stage 2 of the 20ha council-owned Airfields precinct at Hobsonville Point.

Avanda and its building partners will develop over 500 homes in stage 2, of which a minimum 10% will be affordable housing. Housing will be delivered within an agreed timeframe.

Panuku chief executive Roger MacDonald said Avanda was chosen after a competitive tender process, with strong interest from 6 potential developers.

“Avanda is a significant new entrant in the property development market and they showed commitment to developing all of stage 2, rather than just individual parcels that were offered to the market.”

Avanda project manager Winson Tan said the company would deliver a range of high quality housing options. The company has started detailed design to obtain the necessary resource consents for infrastructure works.

Avanda’s ultimate holding company is Guangzhou Jinxiu Dadi Property Co Ltd.

Building at Airfields stage 1 will start over the next few months. It will have 102 standalone & terrace homes.

Image above: Airfields stage 2 at Hobsonville Point, outlined in red.

Earlier story:
21 September 2015: Avanda launches first townhouses on Crown Lynn site

Attribution: Company release.

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Auckland house index eases again as buyers hunt elsewhere

Quotable Value Ltd’s house price index continued to ease in Auckland, Hamilton & Christchurch in January, while values continued to rise in Tauranga, Wellington & Dunedin.

In many Auckland suburbs, the index declined in the 3 months to January.

The nationwide annual increase of 13.5% dropped to 12.0% when adjusted for inflation, and from 52.4% to 28.5% above the 2007 peak. In Auckland, the annual increase dropped from 12.8% to 12.0% when adjusted for inflation, and from 91.7% to 61.6% above the 2007 peak.

QV national spokesperson Andrea Rush said today: “It’s possible rising mortgage interest rates and the new loan:value ratio (LVR) rules will continue to constrain the rate of value growth during 2017. However, this will be balanced by continued record high net migration and a lack of housing supply, particularly in Auckland. As well as the fact New Zealand property can be bought freehold and has fewer taxes on property compared with many other countries, meaning it remains a highly attractive investment to foreign buyers.”

Growth around outlying centres

Wellington prices have taken off since mid-2015.

In a sweep around the country, Ms Rush said in a release: “We are now seeing a strong trend of value growth in regional centres around the country, particularly those situated within 2-3 hours’ drive of the main centres that have seen very strong value growth recently such as Auckland, Wellington & Queenstown.

“These include the Kaipara District just north of Auckland, where values accelerated 6.4% over the past 3 months and 25.9% since January last year, led by strong growth in places like Mangawhai, now a favourite for those who are selling up and moving out of Auckland.

“Similarly, the Hauraki District south of Auckland, and also commuting distance to Hamilton & Tauranga, accelerated 10.8% over the past 3 months and 30.3% year on year, with towns like Paeroa and& Ngatea in high demand from movers & investors alike.

“Values in regions near Wellington such as the Kapiti Coast, Horowhenua & South Wairarapa have also risen between 5-7% since November, as those priced out of the Wellington market look further out for affordable property.

“The Mackenzie District in the South Island has jumped 9.7% since November and 26.9% year on year as those priced out of Queenstown, Wanaka & the surrounds look to places like Tekapo & Twizel for lakeside property.”

Auckland

In Auckland, the strongest growth over the last 3 months was in Franklin, as buyers looked further out from the city centre for more affordable property.

QV Auckland homevalue manager James Steele said: “Places such as Waiuku, Pukekohe & coastal areas south of Clevedon are experiencing strong demand & value increases due to higher demand from investors & home buyers alike.

“There still is a high demand in this area for new-build dwellings with both land & house packages and design & build packages happening within the new developments of Pukukohe, Patumahoe, Waiau Pa & Kingseat.

“There’s been a similar trend north of Auckland, with Rodney North seeing the strongest growth in the Auckland region over the past year – up by 14.5% year on year. This has been driven by stronger demand in places like Wellsford, Warkworth, Matakana & surrounding areas.

“However, quarterly value growth there has eased from 3.6% quarterly growth last month to 1.6% quarterly growth this month, most likely due to the impact of the LVR restrictions.

“Meanwhile, the Waitakere, North Shore & Manukau housing markets have been slow going, with vendors having to adjust their price expectations down to sell, and open home attendances have been slow from November through January.

“It appears people may be taking a wait-&-see approach until after Waitangi weekend, and it appears people aren’t willing or able with new loan restrictions to pay the premiums that they were in the first half of 2016.”

QV’s index figures around Auckland on the old council boundaries, plus Kaipara, Hamilton, Tauranga, the Auckland & Wellington regions, Christchurch, Dunedin, Queenstown Lakes and nationally – the latest average value & index shifts in the last 3 months, last 12 months & since the 2007 peak:

Kaipara, $463,896, 6.4%, 25.9%, 16.9%
Rodney, $933,456, 1.6%, 13.7%, 59.1%
North, $961,450, 2.3%, 14.5%, 60.1%
Hibiscus Coast, $908,966, 1.3%, 12.8%, 54.8%
North Shore, $1,214,291, -0.5%, 12.5%, 88.2%
Coastal, $1,387,368, -0.3%, 13.2%, 84.1%
Onewa, $971,364, -1.9%, 11.2%, 95.8%
North Harbour, $1,189,924, 0.9%, 12.8%, 95.8%
Waitakere, $836,574, -0.1%, 13.6%, 97.3%
Auckland City, $1,225,096, 1.3%, 12.1%, 96.8%
Central, $1,065,420, 2.4%, 12.0%, 87.1%
East, $1,532,815, 2.4%, 12.3%, 92.3%
South, $1,107,912, -0.4%, 11.9%, 105.8%
Islands, $1,036,288, 0.3%, 14.8%, 62.1%
Manukau, $901,422, -0.5%, 13.7%, 96.9%
East, $1,158,197, -1.3%, 13.9%, 94.3%
Central, $686,567, -1.8%, 11.6%, 82.6%
North-west, $781,110, 1.6%, 15.7%, 111.4%
Papakura, $684,172, 0.2%, 12.6%, 90.2%
Franklin, $660,557, 2.9%, 13.1%, 67.0%
Auckland region, $1,047,699, 0.2%, 12.8%, 91.7%
Hamilton, $531,337, -1.1%, 18.6%, 47.0%
Tauranga, $672,752, 3.2%, 20.7%, 39.7%
Wellington, $702,081, 4.6%, 21.1%, 31.9%
Christchurch, $497,539, -0.2%, 2.8%, 31.1%
Queenstown Lakes, $1,032,560, 6.0%, 30.7%, 50.1%
Dunedin, $359,055, 5.1%, 15.5%, 25.4%
Total NZ, $631,302, 1.4%, 13.5%, 52.4%.

Link:
QV house price index for January 2017

Related story today: Agency says market tight for holiday homes & land

Attribution: QV release.

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Agency says market tight for holiday homes & land

First National Real Estate chief executive Bob Brereton said yesterday strong sales of holiday homes around New Zealand might mark the beginning of renewed interest in coastal investment property as investors continue to look outside Auckland for opportunities.

Mr Brereton said the agency’s offices around the country reported more activity & interest in holiday homes over the summer: “Between 2003-07, coastal property & holiday homes saw a strong rise in values, but they fell out of favour after the global financial crisis and haven’t really featured as an investment option in more recent years. But it looks like that might be changing.”

He said the group’s offices in Whangamata, Tauranga, Mt Maunganui, Waihi, Riverton & Wanaka all experienced strong sales interest, but securing listings was an ongoing problem.

“In most of those locations we simply can’t get enough stock to meet the strong growing demand – which means prices are being pushed up and vendors are finding themselves in the box seat. Whangamata & Waihi have seen big price increases, and prices in Wanaka have increased by around 50% over the past 18 months.”

Mr Brereton said the supply of rental stock had become very tight in coastal locations: “In some areas, our offices are reporting that it’s virtually impossible to find a long-term rental, and even short-term holiday-stay rentals are tricky to find. This means there is no shortage of potential tenants in these locations, something that may have previously concerned would-be investors.”

Vacant sections were also in high demand: “Our Whangamata office has seen the number of available developable sections drop by more than 90% over the past 12 months and, at Waihi Beach, vacant sections are in such high demand they’re being sold up to 36 months before title is formally issued.”

Related story:
1 February 2017: Auckland house index eases again as buyers hunt elsewhere

Attribution: Agency release.

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Council shifts pensioner housing into new partnership, and Christchurch does similar

Auckland Council’s governing body voted yesterday to enter a long-term partnership with the Selwyn Foundation for the management & operation of the council’s Housing for Older People (HfOP) service.

The council will hold 49% and the foundation 51% in a limited partnership. The joint venture will register as a class 1 landlord and become a community housing provider eligible to receive Government income-related rent subsidy funding.

The Christchurch City Council also voted yesterday to separate its social housing portfolio from total council control, but in a different structure.

The most important difference between the 2 structures concerns maintenance. Councils are good at making capital spending decisions, but have a long & consistent record of being far poorer at maintaining assets, or on maintaining capital spending on vital but unseen infrastructure such as sewer piping.

The Auckland partnership will maintain & upgrade the housing portfolio. In Christchurch, the trust will pay the council rent which is to be applied to maintenance.

Cllr Cathy Casey noted the “hole” in the portfolio on the isthmus, the result of the 2001 selloff of Auckland City Council’s pensioner housing in John Banks’ first term as mayor. Rather than revive debate on the merits of that 2001 decision, deputy mayor Penny Hulse, chairing the meeting, said: “We need to move on from decisions that were made. We need to work with the status of now, but it’s a very good question, how is that great big hole in central Auckland being resolved?”

David Rankin – finance & democracy services director in that council 15 years ago, now strategy & engagement director on Auckland Council’s Panuku Development Auckland council-controlled organisation – told councillors the council had effectively been able to limit ratepayer input by putting its portfolio into the joint venture at no cost, but also with no dividend because all returns will go back into housing.

“There’s an ongoing budget built into the model for maintenance – we know there is a problem with a lot of the units. Effectively in the new model, the Ministry of Social Development is working out across the region where the highest priorities are. If, as we all surmise, there’s an unmet need in the isthmus part of Auckland, the ministry will make subsidy streams available and this new partnership will be able to buy sites.”

Christchurch structure

In Christchurch, the council’s social housing portfolio will be run by a new trust the council set up, the Otautahi Community Housing Trust. The council approved leasing the land & buildings to the trust, which will take over management from 3 October. The trust has applied for registration as a community housing provider so it can receive the income-related rent subsidy.

The council set up the trust, which has 3 council-appointed trustees & 4 who are independent. It’s not a council-controlled organisation and will only be the operator & manager. The council retains ownership of both land & housing stock, and the trust will pay the council net rent of $12 million/year, rising to a maximum $19 million including gst, to provide for maintenance, refurbishment & replacement.

The initial lease term is 5 years and the trust has 5 5-year rights of renewal.

Links:
Auckland Council agenda material: 11, Housing for older people: Partnership for the management & operation of the council housing for older people service and adoption of the high level project plan
Christchurch City Council social housing proposal

Earlier stories:
22 August 2016: Council votes Thursday on Selwyn partnership for old folks’ housing
11 April 2016: Casey wants to increase instead of maintain housing for elderly
1 May 2015: 2800 homes switch from Housing NZ to government-council JV
November 2001: New-look Auckland council gets on with selling flats
November 2001: Council figures new fund will net it $89 million over 9 years
22 November 2001: Auckland council’s direction shift formalised

Attribution: Council meeting, Christchurch council documents.

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