Council flat tenants face 24.5pc rise
Palmerston North city council tenants and community groups are reeling after a shock demand for rent rises of up to $37 a week.
The increase is in line with a council policy that defines ‘‘affordable’’ housing as up to 30 per cent of tenants’ income, but at odds with recent practice, which is to set rents at a maximum 25 per cent of income.
Wainui Court tenant Krys Baker said as a single person on a supported living benefit, her increase would be $10 a week, whereas last year, the rent went up by $2 a week.
‘‘A lot of pensioners are very unhappy – it’s $25 for them.
‘‘I know many who can’t afford it and are really upset.’’
The Manawatu¯ Tenants’ Union and a group of nine other community groups are all opposing the increase because of its impact on low-income households.
And city councillor Lorna Johnson, supported by councillor Susan Baty, is seeking to overturn the decision at Monday’s full council meeting.
Johnson said councillors were told about the increases affecting about 330 tenants in midNovember.
Letters went out to tenants a week later, informing them they would be paying the higher rents from January 25.
Johnson said councillors had included the ability to charge tenants up to 30 per cent of their income to discourage a small group of people who lived alone in double units.
‘‘The intention was never that everyone should go to 30 per cent.’’
She said the increase was not justified, because the council was not providing any higher level of service in return.
She understood the council’s budget was under pressure, and staff were looking to save money or increase income where they could.
‘‘Staff thought the policy gave them authority to do this.
‘‘But this is not an area where we should be looking to squeeze money out of people.
‘‘It’s a social service. These should not be the first people we go to if we want more money.’’
Council chief customer officer Chris Dyhrberg said in a report for Monday’s meeting that annual rent increases were running late this year.
Increases to benefits from April 1 routinely triggered rent increases from June 1, but because of Covid-19, rents this year had been frozen and the rent review was delayed.
That had resulted in a financial loss for the council, he said.
Manawatu¯ Tenants’ Union co-ordinator Ben Schmidt said having to pay up to an extra $37 a week in rent would hurt people’s ability to pay the grocery bills.
He also criticised the way the decision had been made without consultation.
‘‘In the present housing crisis, with housing and social housing a high-profile issue in Palmerston North, I also believe that this issue is of high significance for the community.’’
Schmidt said the council seemed to assume tenants would be able to get an accommodation supplement to help cover the increase.
However, that supplement would only cover part of the increase and many tenants would not be eligible to receive it.
For a single person in a single unit, the proposed increase would be from $102 to $127, which would reduce to $112.30 for those receiving an accommodation supplement.
Johnson’s proposal would bring the rent for those tenants back to $105 a week.
In an open letter to councillors, community groups urged them to support Johnson’s proposal to hold rents at 25 per cent of income.
‘‘Healthy, accessible and affordable housing is fundamental to a positive and dignified life.
‘‘This change would impact tenants that are already highly vulnerable, with the least ability to pay.
‘‘It goes against the purpose of social housing [which is] to provide affordable housing for people on low incomes.’’
Schmidt said 30 per cent of income was an arbitrary measure of housing affordability, and was higher than the level recognised by Kainga Ora and other community housing providers.