Horowhenua housing bargain
The Horowhenua District Council was looking to reap a market-value sale price on its pensioner housing, but sold it for millions less.
A document obtained by Manawatu Standard reveals the rateable value of the council’s 115 pensioner housing units is $9.2 million.
But, it sold to Compassion Horowhenua for $5.5m, the Standard confirmed in June.
The document – a proposal about what the council calls a ‘‘community housing transfer’’ – says the council aimed to ‘‘receive a fair market value on sale’’.
The council would not confirm how much the housing sold for, but conceded the sale price was less than $7.19m, the units’ book value.
Council chief executive David Clapperton said the Compassion Housing bid provided the best value for money offer and met its aspirations for ongoing management of the units.
Rateable values are set every three years by Quotable Value. The book value, made by independent valuers, took into consideration the average age of the portfolio and that 50-60 per cent of the stock would have to be replaced over the next 20-25, years at an estimated cost of $4.3m, Clapperton said.
Until the sale was complete, possibly by September 30, information about the deal would remain confidential, he said.
Regardless of how much it sold for, the purpose of the sale was not to make a profit, but to make sure a ‘‘sustainable’’ service was put in place for the council’s existing tennants, Clapperton said. The document obtained by the Standard said the council aimed to work with the new housing provider to grow the supply of affordable rental housing in the district, while still protecting the interests of current tenants.
There is demand for affordable pensioner housing, as the council has 30 people on a waiting list to move in to the units, which are in Levin and Foxton.
Within the housing portfolio, Compassion Horowhenua also bought one hectare of residential development land in Levin.
Compassion chief executive Gerard Mcgreevy said the main focus would be to continue providing housing for pensioners.
Compassion’s aim would mostly fit into the council’s model of targeting pensioners and people over the age of 60 with a disability, but it may also rent to people in their 50s with disabilities, Mcgreevy said.
‘‘We’ve spend 118 years, this year, looking after elderly people and people who have needs. That’s what we will continue to do.’’
If there was a demand, Compassion would look at building more housing on the development land, Mcgreevy said.