Kiwisaver fund eyes city housing
Simplicity Living is looking at building up to 400 apartments in Hamilton in its build to rent programme.
A cut-price Kiwisaver fund is eyeing up Hamilton to build up to 400 apartments.
Simplicity Living, owned by not-for-profit Kiwisaver provider Simplicity, wants to build 10,000 affordable long-term rentals across the country in the next 10 years.
Waikato is the “next obvious port of call” for a build-to-rent programme aimed at providing homes to tenants for as long as they need it, which could be a game-changer for housing in Hamilton.
Unlike many other developments, the apartment complexes are not sold once they are completed. Rather, Simplicity builds, owns and operates the development.
Every development is built using concrete and brick to last at least 100 years, which is far longer than 50-year standard most New Zealand homes are built to. They are also built to a high-level of thermal efficiency so that residents barely have to heat them.
Earlier this year Simplicity Living announced its plan to build a 256 apartment complex in Auckland’s Morningside. It will be the sixth development since its inception, with other developments in Pt England,
Onehunga, Mt Albert, Mt Wellington, and
Remuera.
Of the 10,000 rentals they want to build nationwide, Simplicity managing director Sam Stubbs says they see a need for at least 400 long-term rentals in the Waikato.
“We’ve just started in Auckland, we need to get a home base, critical mass and then start spreading south.”
Speaking to the Waikato Times this week at Claudelands Events Centre as part of their roadshow about their new investment fund, Stubbs says the fact they are already doing community housing and first-time mortgage lending in the Waikato made the region “one of the first obvious places to go”.
So far, they have funded 144 community houses – 31 in Waikato and 113 in Auckland – and funded 300 mortgages across the country through their first home loan fund.
The time-frame for building long-term rentals in Waikato depends a lot on capacity, money and whether Simplicity has project managers they could bring down, Stubbs says.
“What we’d quite like to do is to build up construction capacity here so that we wouldn’t want to do it just once, we’d want to be able to basically replicate it.” Ideally, they would do the first build and then show “one or two” locals how to do it. “And then they just go and do it themselves to build and sell. And because, you know, the whole idea is just getting as many houses as possible built.” Hamilton’s rental market is stretched to capacity with the city being hit by a double whammy of high demand and low supply, the Times has previously reported. Hamilton City councillor and chair of the affordable housing working group Anna Casey-cox, says there’s a huge need for the type of housing Simplicity Living offers, particularly given the huge influx of people moving to Hamilton.
“I think it was 6000 in the last year so it’s put a stress on our rental market and accommodation. We definitely need more rental accommodation so these kind of solutions are super important.”
Casey-cox, who had visited one of Simplicity’s Auckland developments, described the quality of the apartment build as impressive, ticking the boxes for warm and dry rental accommodation that is sorely needed.
While Casey-cox said she understands the rental prices were “somewhat affordable”, the fact tenants could stay long term had value in itself. “It’s so expensive to move around all the time with all the new connection fees and the things you have to pay for when you have to up and move all the time, so there’s real savings for people in being able to have that permanent place to live.”
“It’s really exciting Simplicity and their commitment to not only building affordable rentals but affordable housing generally, because there’s a bit of a gap in that space. It’s really needed and really exciting.”
Only something like 14% of Hamilton’s rental stock is provided by Kāinga Ora, with the rest made up through private landlords and mum and dad investors, Casey-cox says.
Stubbs says he’s hesitant to make any promises around when exactly those builds would come to the Waikato but it will be “as soon as we comfortably can”.
“If you think about the three places that strike us as most obvious early on, it would be Tauranga, Hamilton and maybe Queenstown. Queenstown is a special case just because the need there is incredibly acute.”
Simplicity Living offers 10-year inflation adjusted rent. This means, for example, the rent of a retiree only goes up if their superannuation does.
“This gives people a long-term home,” Stubbs told the crowd during his presentation. ”We’ve had people who are crying because they have finally got housing security because we’ve said you can be here, this is your home for as long as you want because we’re going to own it for 100 years.”
On how to fix New Zealand’s housing problem, Stubbs says building more homes is the only way.
No matter what central and local governments decide to do, Stubbs says Simplicity knows what it can do – and they are doing it.
“We're just going to stay in our lane and get on with helping increase houses, but in two ways – building our own ones but also actually helping other people set up to build what we have.”