Affordable homes to increase in city

The number of affordable homes in Christchurch is likely to increase following the establishment of a new social housing trust.

Otautahi Community Housing Trust is about to start planning how it can build new affordable homes to add to the city’s stock of social housing, chief executive Cate Kearney said.

The charitable trust took over managing the day-to-day running of the Christchurch City Council’s 2300 social housing units on October 3, making it New Zealand’s third-biggest landlord.

‘‘We obviously have to increase the social housing stock in Christchurch. That’s our starting point,’’ Kearney said.

‘‘There are a lot of people that cannot afford the market rent. Social housing needs to be available to people.’’

There was still a long way to go before the trust could put any social housing development plans in place.

As part of a development strategy, Kearney would consider the cost, partnering opportunities and where the greatest need was.

The council set up the trust so it could access much-needed extra revenue through the Government’s Income-Related Rent Subsidy.

The council was not eligible for the subsidy and with rents set at just over half the market rate, it had been struggling to generate enough money to maintain and upgrade its units.

The trust’s registration as a community housing provider (CHP) was approved by the Government last week, allowing it to access the subsidy.

Only new tenants on the Ministry of Social Development’s housing register would be eligible for the subsidy.

They would pay 25 per cent of their net income on rent and the Government would pay the difference up to the market rate.

Rents will remain unchanged for existing tenants and, as part of the lease deed, increases have been capped at no more than 5 per cent annually.

Rents for new tenants not eligible for the subsidy will be set at 70 per cent of the market rate, up from between 55 and 60 per cent under the council’s management.

Kearney said the trust decided on the 70 per cent figure after researching what other CHPs across New Zealand charged.

The trust had employed 24 staff, including 10 from the council’s social housing unit, and made some immediate changes from how the council managed the tenancies.

Tenancy managers would be responsible for about 200 units each, compared with the 350 to 400 units managers looked after at the council.

‘‘They will have a relationship with the tenants and see them face to face more regularly,’’ Kearney said.

The trust would also carry out four inspections a year, up from one.

When setting up the trust, the council decided to transfer $50 million worth of land and assets held by its social housing unit.

Kearney said there had been no formal transfer of land at this stage, but the trust was working with the council.

‘‘We want to get it right, so we’re not rushing it.’’

It was expected the trust would use this land to develop more social housing.

The trust expected to pay $12m annually back to the council to provide for maintenance, refurbishment and replacement of housing stock. This was expected to increase to a maximum of $19m.

"There are a lot of people that cannot afford the market rent. Social housing needs to be available to people." Otautahi Community Housing trust chief executive Cate Kearney