Retirees fear council’s ‘top secret’ land sell-off
Critics say Auckland move raises questions about local government transparency ahead of the mayoral elections. Ben Leahy investigates
June Brown is one of up to 150 older residents blindsided by what some are calling a “top secret sell-off ” of retiree units by Auckland Council.
The normally bubbly 99-year-old is anxious about her future after receiving a “bolt-out-of-the-blue” letter from the council on June 1, saying it had decided to sell its “equity” share in her Sandringham home.
Brown and most of the other retirees bought their units from Auckland Council’s Own Your Own Home scheme at a 20 per cent discount.
When they move out, their contracts state they must sell back to the council at the same discounted rate so the units can be on-sold to other in-need retirees.
It’s a 50-year social housing scheme that includes 150 units in 14 locations across the city and aims to provide retirees with affordable ownership options.
Yet Auckland councillors last month voted to end council’s participation in the scheme.
The meeting was conducted entirely behind closed doors.
Homeowners weren’t warned it was taking place. No documents justifying the decision have been publicly released.
In short, home owners know nothing about which organisation will take over the scheme or how it would work in the future, Brown said.
“We don’t know who they are,” she told the Weekend Herald, while clutching a coffee mug, her voice rising with the stress.
“We’ve not even been given a hint of who they might be.”
The retirees say the uncertainty potentially threatens their financial futures, with many having most of their life-savings tied up in their houses.
Council argues the decision will not affect the home owners’ day-today lives and their existing contracts will be honoured by whichever organisation takes over the scheme.
It said the Own Your Own Home scheme was no longer popular, and its recent decision to sell its stake would save money for ratepayers and potentially allow more suitable housing options to be built across the city.
However, critics have blasted the council for its “lack of respect” shown to the retirees by failing to consult with them ahead of the decision.
Keeping the matter behind closed doors also “smacks of bad governance” and opened council to criticism it was trying to avoid scrutiny by pushing a potentially unpopular proposal through in secret, they said.
Women who’ve had to fight hard to get ahead
June Brown still bubbles with energy, even approaching 100.
Her zest for life is fuelled by sayings like: “There’s always something good around the corner”.
Yet her life has been a long struggle to get ahead.
She got her first job as a sewing machinist at 13 years old in 1936, has raised five children largely on her own and broke both her arm and her back in the past year.
Spending most of her life in state housing in Sandringham, first as a child, then mother, it was only due to careful, frugal saving that she could finally afford to buy her first home at over 60 — an ex-state house in Taupo¯.
However, after she became sick about 16 years ago, her doctors advised her to move away to somewhere warmer.
Coming back to Auckland, she heard through a friend about the Own Your Own scheme, one of the few affordable options open to her, given Auckland Council was able to sell her home to her at 80 per cent of its market value.
Her unit in Sandringham is one of 28 units on Coyle St. She loves it.
The other owners are all independent but caring, she said. They’re not always on each others’ doorsteps visiting, but they keep an eye on one another and give help when needed.
Most of the residents are women who’ve had to fight hard to scrape together savings for retirement.
Fellow Coyle St resident Lorraine Moon and her former husband used to run deep sea fishing vessels. But when they divorced in 1985, Lorraine only got a share in their house.
Trish Turney is a single mum who lost money when her first home was found to be leaky.
Paying between $400,000 to $500,000 for their units about three to four years ago, they said the Own Your Own scheme was a godsend.
Units in retirement villages typically sold for much higher than that and included ongoing payments that neither Turney nor Moon could afford.
The Herald spoke to six Own Your Own Home owners, spread across two locations in Sandringham and Mt Albert.
All said they only heard about the scheme by word of mouth. They’d never seen it advertised.
Turney believed, with Auckland in the middle of a housing crisis, the scheme would be popular if people knew about it.
But she accused Auckland Council of deliberately keeping the scheme quiet and not investing in it.
She said when retirees passed away or moved out of their units, the units could sit empty for years without council spending money to upkeep them or advertise them as being back for sale.
She feared council was “secretly” planning to sell its stake to the central government’s Kainga Ora.
That way, once the current home owners left or died, the units could be bowled over to make way for more intensive housing.
But it also raised more questions about whether Kainga Ora or a different owner would tenant the vacant units in the meantime and to whom, what would happen to the value of their homes when it was time to sell and would the new equity owner be a trustworthy partner.
She said there was no way to know because council had given them very little information.
Home owners had only received two letters this month. These stated council had decided to sell its stake in the scheme and that this would take place through an “off-market, twostage expressions of interest process”.
No longer fit for purpose
There are 150 units in Auckland Council’s Own Your Own Home scheme spread across 14 locations in the city’s north, west, south and inner central region.
The land they occupy is worth millions of dollars.
An Auckland Council spokeswoman said it undertook an “internal value for money assessment” on the Own Your Own Home scheme and found it was no longer “fit for purpose”.
She said 54 of the scheme’s units were currently unoccupied.
Council now plans to sell its ownership of the 54 vacant units, its buy-back rights to the units owned by the retirees and any other equity it has in the scheme.
General manager of assets and delivery Marian Webb said in council’s letter to home owners that Auckland’s housing issues have changed substantially since the scheme was first introduced in the 1970s.
“A diverse mixture of smaller units, cheaper housing and rental options are now required to meet the needs of older Aucklanders,” she said.
“Furthermore, new retirement homes which offer wrap-around services have become more appealing.”
Council’s spokeswoman said the rights of the retirees would continue unchanged with “an enormous amount of work” going in to finding a suitable socially minded organisation to take over the scheme.
She also said council made its decision to sell its stake in the scheme behind closed doors for two reasons.
That was to “allow time to engage with the current” home owners and because they contained details of council’s “commercial strategy”.
The spokeswoman also said council did not notify the home owners before the decision was taken because it was not required to by law.
‘Smacks of bad governance’
Former longtime councillor and chair of the Auckland Regional Council Mike Lee said council effectively owned the units in partnership with the retirees and had a “moral obligation” to consult with them before making a decision.
Its actions showed a lack of respect.
“There’s a saying ‘as safe as houses’, but not evidently if you are in partnership with Auckland Council,” he said.
Dr Andy Asquith, a former Massey University local government specialist and now adjunct research fellow at Curtin University in Perth, said the way council has handled the manner “smacks of bad governance”.
It said it could exacerbate a lack of faith in local government ahead of the upcoming mayoral elections.
“One of the principles of good governance is transparency and there has been zero transparency here,” he said.
Associate professor Dean Knight from Victoria University of Wellington’s Law Faculty said local governments did have the authority to keep discussions, minutes and documents confidential.
For instance, a local government may choose to do this if it decided to buy a service or asset and believed that making the information public beforehand may drive up the price it would have to pay.
However, keeping a matter confidential must be weighed against the public interest in it, he said.
“If this has come as a bolt-out-ofthe-blue for residents and their houses and that’s causing concern and upset and grievance, that type of thing would suggest there is a strong public interest in the proposal,” Knight said.
He said that could lead to concern that if a council is “too quick” to withhold details of proposals because there is a sniff of “commercial sensitivity” about them, they could be accused of trying to avoid democratic scrutiny of their actions.
But Brown puts it another way: “It’s already done and they’re trying to shut us up”.