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.”
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.
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
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.