KiwiSaver provider Generate believed to be the first to invest in social housing

Wednesday, 30 September 2020

The Salvation Army opens its doors to a new housing estate in Royal Oak.

A KiwiSaver provider is believed to be the first from its sector to invest in community housing projects, putting $15 million into Salvation Army developments.

Generate is investing in a five-year bond funding the construction of 118 homes in the Auckland suburbs of Royal Oak, Westgate and Flat Bush, joining investments from the charitable sector.

“It is the right thing to do for our KiwiSaver investors and for New Zealand in this time of great need,” Sam Goldwater, Generate’s executive director, said.

The Salvation Army's new community housing development in Westgate, in northwest Auckland.

The investment nearly doubles the amount raised through Community Finance – which was formed to raise funds for the community housing sector – to $34.4 million.

James Palmer, the chief executive of Community Finance, with John McDougall of the Matua Charitable Trust on trust land at Bethlehem, Tauranga, where a mixed housing development is planned.

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The Salvation Army said Generate would get a competitive return – 2.3 per cent – while helping address urgent social and housing needs for families without homes.

“More families who are currently living in garages, or are bunking down with family members, are going to get to live in their own warm, dry and safe home, within a thriving community setting,” national director Greg Foster said.

“We are thrilled for these families and it will be life-changing for them.”

The community housing sector has long been unhappy with the difficulty in getting backing from the government to build homes that can then be financed through rent subsidies.

Community Housing Aotearoa said Generate’s cornerstone investment was exactly what was needed to grow a “long-term stable finance option”.

“We need a different approach from investors who have a shared understanding of the value of safe, secure and affordable housing,” chief executive Scott Figenshow said.

“The need has never been greater for our country to get behind the community housing providers on the front line, tackling the growing public housing waiting list,” Community Finance chief executive James Palmer said.

Other contributors to the Salvation Army bond include the Tindall Foundation, Lindsay Foundation, Foundation North and the Matua Foundation.

The Salvation Army opened its Royal Oak homes in November 2019 and families start moving into the Westgate development this week.