Wellington City Council approves $439m social housing spend

Thursday, 17 April 2025

The Wellington City Council has voted to take on $439 million in debt to fix up its social housing and make good on a 17-year-old commitment with the Government when it took $220m of government money to do phase one of upgrades.

That deal locked the council into paying for phase two, or repaying the government money with interest, of upgrades with a cost now put at $439m over nine years.

The reality of living in un-upgraded council housing was brought home to the council with tenant Bernard O'Shaughnessy explaining life in his cold and poorly insulated 28sqm home.

“If my neighbour coughs in the middle of the night, I hear her,” he said.

Council staff on Thursday confirmed the debt would be ring-fenced and paid by renters, not ratepayers. Rentals would not go up as a direct result of the spending though community housing provider Te Toi Mahana – which in turn paid rent to the council –was responsible for setting future rent prices.

Talk of the council going back to central Government for more help was rejected with Labour councillor Ben McNulty arguing “anyone paying any attention knows central Government is not going to help”.

Councillor Iona Pannett said the 17-year-old deal was the best possible at the time but was “possibly naive” for thinking the council’s share could be funded by rent.

Councillor Tim Brown said the stalled Kāinga Ora Arlington development showed the Government wasn’t coming to the rescue on Wellington social housing.

“If not us, who?” he asked. “We are the victim of central Government policy – we can’t wish that away.”

But the council could hope for some increased eventual Government help for council renters.

The council voted to approve the spending, with the money paid back over multiple decades with only Nicola Young, Ray Chung and Tony Randle voting against.

The planned work will include upgrades of 825 housing units, primarily through refurbishment, one new multi-unit development, one infill development and seismic remediation for nine earthquake-prone buildings.

With only 11% of tenants receiving the Government’s income-related rent subsidy (IRRS) funding, there was a desire from some councillors for the Government to provide more funding to take the load off ratepayers.

At the current rate Te Toi Mahana receives from IRRS, the Government will contribute about 4% of the cost of the upgrade over the next decade ‒ about $20m. If Te Toi Mahana received the full market rents for all of its tenants, it would cover 32% of the upgrade, or about $140m.

Jon Manns, from Te Toi Mahana, on Thursday confirmed it paid $14.9m in rent to the council in the 11 months from when it was set up on August 1, 2023 and the end of June 2025.

In the end, the paper passed with only three councillors voting against.

Councillor Teri O’Neill said if the vote against had been carried tenants would be stuck in cold, mouldy homes.

“We’re here to serve, not to walk away when it gets hard or expensive.”

“People deserve to live with dignity. This upgrade is about honouring that — and refusing to let our whānau be left behind.”

Black mould, graffiti, urine and rats: Inside the social housing upgrades

Before the big vote, councillors went on a site visit to three social housing complexes across the city, each one demonstrating a different level of quality.

The first was a complex of standalone houses on Owen St, which has one house in extreme disrepair. The lack of action from the council has left this house abandoned, but tenants live next door.

O’Neill said squatters were recently living in the house’s poor condition, which had black mould, graffiti and urine baked into the carpet.

The proposed works for the site will cost $150,000 and included removing asbestos, replacing the flooring, upgrading gas stoves and providing walls with thermal installation and upgrading plumbing.

Pukehinau flats on Willis St has 79 units across five buildings that need work, and its bridge was announced as earthquake-prone by the council in February as part of the six social housing complexes that needs strengthening work.

The upgrades for the flats will run from 2028 to 2032.

The units require thermal installation, with its temperatures not consistent with the healthy homes standard. It also needs asbestos removed, repainting, re-roofing where required and replacing any railings in poor condition.

The unit councillors visited was previously home to a hoarder, and O’Neill said there had been a large build-up of rotted food scraps.

Because tenants often could not afford their own heat pumps, windows would be kept closed to keep the heat in, which made it a breeding ground for mould, mildew, rotting wood and rats.

“We as landlords haven't put in insulation or given anyone a heat pump. Tenants have to try and do the best of what they can.”

The last flat of the site visit was across the road from the Pukehinau, which had been recently upgraded. O’Neill said the clean, warm flats were an amazing story, and tenants had so much pride in their homes.

Councillor Ben McNulty, who made a video of the site visit, said cold, damp and mouldy housing was consistent across both the Owen St site and The Pukehinau Flats.

“Those are not environments anyone should be living in, and we know the impacts it has on people in terms of sickness and health.”

He said the conditions were confronting, and helped him to understand how gigantic of an issue the council is facing.

“I feel a bit of anger in terms of the fact that it's taken more than 15 years for a council to finally front up and address this issue, but thank God we finally are.”