Auckland social housing developers say building will stop because of government funding vacuum

Saturday, 1 June 2019

The Auckland Community Housing Providers' Network video highlighting their work

Social housing providers in Auckland say they are being restricted by the absence of capital funding, once provided by the Government.

One of the largest said it would not be able to continue building new homes, once its current programme of 167 homes is completed.

The body representing 21 Auckland providers said the Government appeared to now be ignoring them, at a time when they could do more for those needing affordable homes.

ACHPN chair Hope Simonsen at the launch of the 'We Believe' video in Herne Bay

The Minister for Housing and Urban Development Phil Twyford insisted the government 'was keen to harness their ambition.'

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Members of the Auckland Community Housing Providers Network gathered in the evening after Thursday's budget to launch a campaign to highlight the part that they have played and can continue to play, in housing those who can't afford to house themselves.

One of the bigger providers, Community of Refuge Trust (CORT) said it would have to stop building once it has completed homes part financed by a now-discontinued capital grant scheme.

'We have demonstrated that we can step up,' said CORT CEO Peter Jeffries, reflecting on the 167 Auckland homes in its pipeline.

Funding to the sector is now through access to Income Related Rents for qualifying tenants, or grants equivalent to 150 per cent of market rentals once a home is completed.

Providers told Stuff, it left some of them in a position similar to first home buyers, able to make repayments, but unable to find the deposit to get a home in the first place.

The Auckland Community Housing Trust which rents to mental health patients said it had built homes thanks to a $2 million interest-free government loan in 2008.

However its chair Richard Northey said interest kicked in after ten years, and the trust had had to sell three of its 33 homes to keep its finances in line.

Each provider has a different business model, with the Salvation Army able to raise finance due to its size, and can build on church land such as a development in Massey's Westgate.

Another discontinued fund which operated under the National-led government provided capital grants to social or affordable homes built in Special Housing Areas.

The formula was a key part of the Waimahia Inlet development where 295 affordable or rental social homes were built by a coalition of iwi and housing providers, with state assistance.

While the development has been hailed as a success, lack access to another piece of land with the same funding formula has blocked a repeat elsewhere in Auckland.

'We could do so much more, we're just trucking along and some of us aren't growing at all,' ACHPN's chair Hope Simonsen told Stuff at the launch of a video aimed at highlight the sector's work.

'Whether the subsidy comes through land or capital grants, those are the two forms of subsidy that the sector requires to make a difference,' she said.

Twyford said he knew the community housing sector wanted to do more.

'That's why we have commissioned KPMG to establish whether there are better ways to build more homes and provide value for money for the taxpayer. A range of options including capital grants are being assessed independently by KPMG,' said Twyford in a statement.

ACHPN members own 959 homes in Auckland and lease another 4666 which are rented out.

The sector's national body Community Housing Aotearoa said it was disappointed in that part of Thursday's Budget.

' Community Housing Aotearoa is disappointed that Wellbeing Budget 2019 won't deliver a significant scaling up of the affordable housing required to support investments in child and family wellbeing,' said Scott Figenshow, the chief executive.

'We have long been calling for an Affordable Housing Fund to make further capital investments in affordable housing through affordable rentals and KiwiBuy progressive home ownership delivered through our country's strong and capable not-for-profit community housing sector,' he said.