Nelson's council-owned community housing bought by Kāinga Ora

Wednesday, 4 November 2020

The city council will be transferring its 142 community houses to Kāinga Ora.

Nelson's community housing has been sold to Kāinga Ora for just shy of its estimated $20 million value.

Nelson mayor Rachel Reese said it was “really important” for the council the houses remain in public ownership, and the past 18 months of negotiation had delivered “the best proposal for the people of Nelson”.

“It's taken some time to come to fruition because we wanted to get it right,” she said.

“The agreement will see Kāinga Ora protect our community housing, it remains in public ownership, and the welfare of our tenants will remain a top priority.”

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Nelson mayor Rachel Reese said the agreement between Kāinga Ora and Nelson City Council prioritised the welfare of existing tenants.

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The city council will be transferring its 142 community houses to the housing agency for $19.8m, with Kāinga Ora taking ownership in February next year. However, Reese said “all of the money from the sale will stay in Nelson”.

The council will be using $12m of the sale proceeds to set up a Housing Reserve fund “immediately on settlement”, which would be used to support and leverage further funding for affordable and social housing projects.

“Housing is a top priority for us, and when we work in partnership with our community housing providers, whether it is with Kāinga Ora, whether it is with iwi, whether it is with the private sector, we see opportunities to think differently, to work differently and really grow that social housing stock.”

Community Housing tenants had been stressed by news of the sale, but Deputy Mayor Judene Edgar said tenants had been very positive when she visited them to tell them the news.

“For a number of the tenants they actually commented on the housing reserve and actually really liked that it was a component of the sale.

Nelson City Council's 142 community housing units will transfer to Kāinga Ora in February next year.

$5.1m from the sale will be held back for 15 years to cover a share of the costs for retrofitting or renewal of units, consents for expanding the housing, and rent top-ups for tenants who do not qualify for government rent subsidies. The remaining $2.7m will be used for Healthy Homes upgrades to the housing, and to pay back a loan from Kainga Ora for the upgrade of the Orchard Street flats.

If after 15 years any of that fund is left, it will be added to the Housing Reserve Fund.

Reese said the sale was a “significant investment” in the region and a “strong sign” of the commitment of both Kāinga Ora and the Nelson City Council to improving the housing situation in Nelson.

“We know that the need for affordable and social housing is continuing to grow. This agreement is a significant opportunity to help provide quality housing for Nelsonians who might otherwise struggle to find a home on the private market.”

Reese said the agreement between Nelson City Council and Kāinga Ora prioritised the welfare of existing tenants, and the council would be working with Kāinga Ora, the Ministry of Social Development (MSD), and the Nelson Tasman Housing Trust to make sure those tenants would be kept “well-informed, reassured and supported” as their tenancies switched to the agency.

The council said tenants would be contacted by MSD over the next few weeks for the required public housing assessment to make sure they were getting all the financial support they were entitled to.

Tenants of Government social housing may be covered by the Income Related Rent Subsidy, which is not available for councils. The council said that “many” of its tenants would qualify for the subsidy, but those who were not eligible would have their rent “topped up” with the $5.1m held back from the sale.

The sale will bring Kāinga Ora's community housing portfolio in Nelson up to 705 properties. Kāinga Ora was established in October last year from Kiwibuild, HLC, and Housing NZ.

Kāinga Ora area manager Dale Bradley said the agency was looking forward to forming close relationships with the existing community housing tenants.

He said the housing units would not be kept just for the elderly after Kāinga Ora took over.

“They won't be exclusively for the elderly, but all of our placements into those complexes will be sustainable, they're not going to disrupt the current lifestyle for residents.”

Incoming Nelson MP Rachel Boyack said this had been one of the “challenges” of the sale, but overall she was still “delighted” at the announcement.

“The opportunity from my point of view is we have a growing housing register, and a lot of the people on that housing register are actually people who are elderly … so there's a good fit there already.”

She said overall, increasing the housing stock generally in Nelson via the housing fund and partnerships with community organisations and Kāinga Ora was an important step to addressing the housing needs in Nelson.

Waiting lists for social housing have doubled in Nelson since 2018, from 111 on the list to 212, and have skyrocketed since 2015 when just 11 people were on the list.

As of June 30 this year, Kāinga Ora already had 41 one-bedroom, 286 two-bedroom, 201 three-bedroom, 28 four-bedroom and 7 five-bedroom properties, for a total of 563 in the Nelson region.

Nelson City Council’s community housing portfolio consists of nine complexes providing 49 bedsits, 50 single and 48 double bedroom units for elderly tenants.