Review calls for changes to housing
Napier City Council is considering pulling out of providing housing for people on low incomes.
The council, which has 72 flats for people on low earners, is thinking about selling them as a means to raise an estimated $17 million to invest in improving and increasing the amount of retirement units. Like the rest of the country, the Hawke’s Bay city has an ageing population.
It is one of several options being considered as a solution to addressing issues with the council’s community housing stock, which an independent review found was outdated. These dwellings will need substantial maintenance in the near future.
The council has 304 retirement units – for those over 60 – and 72 for people on low incomes.
But the review found it was financially unsustainable for the council to continue providing the community housing it does currently as the future maintenance required has not been budgeted for.
The council has intimated that it did not want to sell the units. The independent review recommended two options; the first would see it sell or lease out the low-cost rentals and potentially a few retirement rentals. The second would see it contract out delivery of the whole service through a partnership with a community housing provided.
The units, which were in 12 separate villages, were built between the 1950s and 1980s and have an estimated value of $50m.
Demand for council housing was high and was expected to get higher as the population ages.
The review stated that some of the units were on valuable land that could be better used by other owners and the council had ‘‘the opportunity to unlock the value of the land for reinvestment in the council housing portfolio or other council projects’’.
Sale of the low-income units could raise about $13.7 million, and the units could be used by other community housing providers that could continue to provide them for those in need.
The review also raised the possibility of selling some of the retirement units in high value areas. This would raise an additional $3.5m.
Funds from the sales could be used to finance improvements to the existing retirement units and lift
Demand for council housing was high and was expected to get higher as the population ages
their number, the review said.
If the low-income housing was sold, the tenants would need to find alternative housing unless they were sold as sitting tenants.
‘‘The role of council is more important in providing housing for older people than for low-income people as there are limited other options, and demand will continue to grow,’’ the review stated.
About 20 per cent of the city’s population was over 65 at the 2013 census. This was expected to climb to nearly 26 per cent by 2028.
The review said a partnership between council and a community housing provider would be beneficial as it would provide long-term financial sustainability and improved tenancy management.
On top of the two options recommended by the review, the council has added a third; improving the current delivery and continue providing both retirement and low income rentals. The third option could result in rental rates climbing closer to market levels.
Presently single tenants of retirement units pay $105.80 a week. A couple pays $160.20. The low-cost rentals range from $153.90 for a onebedroom unit to $191.05 for a twobedroom unit and $215.60 for a threebedroom unit. These compare to market rental rates in the city of $225, $290 and $395 respectively.
The council is considering all options.