Generate KiwiSaver, Community Finance invest $14m to build social housing in Christchurch

Monday, 2 January 2023

Ōtautahi Community Housing Trust and Enable are teaming up to provide all of OCHT's 2300 tenants free internet. (First published May 2021)

A new community development will see 35 social housing units built in Christchurch through a multimillion-dollar investment scheme.

Generate KiwiSaver scheme has partnered with Community Finance to make the $14 million investment to help Ōtautahi Community Housing Trust finance the units for people in need.

Community Finance is a not-for-profit that works to raise private and philanthropic capital for social and affordable housing built by community housing providers.

In 2021, the company partnered with ANZ Bank, Generate KiwiSaver, Pathfinder Asset Management and others to create a $100m fund giving low interest loans to those building social housing such as the Salvation Army.

The 35 homes built from its most recent collaboration will be part of a new community development in Spreydon.

* ANZ Bank, investment firms back $100 million social housing fund

* KiwiSaver money being used to develop affordable housing

The Otautahi Community Housing Trust (ŌCHT) plans to build 35 new social housing units with the help of a $14 million investment from Generate KiwiSaver and Community Finance. (File photo)

Ōtautahi Community Housing Trust (ŌCHT) chief executive Cate Kearney said the partnership would provide a secure foundation for 35 families to live and build a better future.

“This investment provides a significant boost to our ability to plan and build new community housing in Ōtautahi.

“It provides the certainty we need to further unlock the potential for new homes now and into the future,” Kearney said.

Community housing providers have traditionally had significant government funding for their projects.

However, Community Finance was formed to end a dependency on changing government policy.

A mix of philanthropic but increasingly corporate investors have bought bonds which currently give a return of about 5%.

That gave providers such as the Salvation Army or Ōtautahi Community Housing Trust access to low-interest loans.

Community Finance chief executive James Palmer said New Zealand’s significant housing and cost of living crisis was affecting the country’s vulnerable population the most.

“We are focussed on encouraging investors to choose investments that also have a positive social impact in our country.

“Key to this is collaboration and commitment from KiwiSaver providers, fund managers, and foundations to work with Community Finance to back leading community housing providers like ŌCHT, to continue the incredible work they do while also delivering positive returns for investors,” Palmer said.

The construction of the new development in Ōtautahi had already begun and homes were on track to be completed by mid-2023.

The homes will be constructed with low maintenance, durable materials and be well-insulated and thermally efficient, built to New Zealand Green Building Council’s Homestar 6 standard.

Kearney said it was the goal of ŌCHT to provide warm, dry, and healthy homes that set new standards for community housing.

“We want to provide houses that people come to see as homes, in a community they’ll build in a great place to live.

“Generate’s purposeful, ethical investment in our work will help us ease the pressures of housing scarcity and homelessness and give our communities new opportunities to grow,” Kearney said.

Since its launch in 2020, Community Finance has already advanced more than $100m and this latest impact investment will see it surpass $120m of lending.