Council’s 35pc rent rise to be staggered
The Invercargill City Council will stagger a 35 per cent rent increase over two years to help soften the blow for its residential tenants.
The council is also urging its tenants to look into the Government’s accommodation supplement, saying many of the tenants believed they were not eligible for it when in fact they were.
The council contacted tenants in its 215 council-owned flats before Christmas advising them of a 35 per cent rent increase. The increase would help with meeting new Healthy Homes standards.
However, the increase was met with concern from the tenants – who are elderly, disabled, or both.
At a council infrastructure committee meeting yesterday, council staff presented a report recommending the council stick with the initial plan for the 35 per cent increase.
The report included two other potential options. One was to spread the increase across two years, which it said would slow the replacement of units by two years over a 63-year period.
The second alternative option was to reduce the increase to 28 per cent over one year, with the reduced income to be funded by a 0.1 per cent rates increase for ratepayers, which is about $59,000 overall in year one.
During the submissions phase, tenants told councillors they were not entitled to an accommodation supplement to help cover the rent increase.
Deputy mayor Nobby Clark said he did some investigating and found they
would in fact be eligible for the accommodation supplement. He asked senior council land adviser Heather Guise if that was right, and she agreed it was.
Clark said by spreading the increase over two years, and with help from the accommodation supplement, the weekly increase could be limited to between $4 and $5 a week for tenants.
Councillor Darren Ludlow said the council’s current policy was that housing was not supported by the general rate. ‘‘So as soon as you start to subsidise the housing rental with the general rate, you are asking somebody who is potentially in a similar position [as the tenants] to support it as well.’’
Councillor Alex Crackett said feedback from the community suggested the council should provide social housing, but they did not want to subsidise it.
Councillor Nigel Skelt said if viewed as a business model, increasing rents by 35 per cent straight away was the right move. But the council needed to look after its people, which was why he supported staggering the increase.
‘‘We are very comfortable building a CBD and we are very comfortable about our bricks and mortar, but I remind you all we need to look after our people.’’
Councillor Marcus Lush said he was in favour of the council providing warm housing. He was disappointed with the process regarding the rent increase.
‘‘As a landlord, we need to look like we care about our tenants. To propose a 35 per cent [rent] increase weeks before Christmas I think was not the measure of a good landlord, so that concerns me,’’ Lush said.
Councillor Ian Pottinger said the rent increase was economically justified.
However, he was not comfortable with the 35 per cent increase straight up.
When it came to voting, councillor Lesley Soper proposed the recommendation be changed to option two, which would see the increase staggered. It was voted unanimously in favour.
After the meeting, council tenant Alister Webb said he was pleased the increase would be staggered.
He felt a meeting now needed to be organised to help talk the tenants through the available accommodation supplement and how to access it.