We are proposing to amend the Revenue and Financing Policy to allow operational costs on housing to be met through loans and to allow capital costs (e.g. building upgrades) to be met through rates and loans.
We adopted our Revenue and Financing Policy earlier this year after hearing significant feedback from the public on our proposals. This feedback led us to make several changes to the policy, including allowing the Council to approve the use of loan funding to meet operational costs on a case-by-case basis.
A review of Council activities through development of the Long Term Plan has identified a shortfall in the funding of our housing activity. The revenue we gather from the rent we charge our tenants is no longer sufficient to cover the increased costs associated with Healthy Homes compliance, building upgrades and maintenance. The purpose of our housing programme is to provide affordable housing for those on low incomes, particularly retirees. We are currently reviewing our housing programme and exploring options for the future provision of affordable rental housing. We will seek your feedback later in the year on the options we come up with for this.
In the meantime, we need to address our housing programme’s funding shortfall (approx. $2m per annum). This is being addressed through the LTP consultation document, and our options are to either fund this shortfall through a loan or cover the costs through a rates increase. Our proposal is to cover the shortfall through a loan. Either option means we need to make a change to our Revenue and Financing Policy.
We are proposing to amend the Revenue and Financing Policy to allow operational costs on housing to be met through loans and to allow capital costs (e.g. building upgrades) to be met through rates and loans. These new funding streams would be in addition to the existing funding this activity receives through rent and other sources.
New valuations have come in since we made changes to our Revenue and Financing Policy which impact on the rates charged for all properties. Land values in the commercial and industrial sector have, on average, have increased more than other property types in the City. This means that Commercial and Industrial Ratepayers are likely to see an above average rates increase. Residential property owners, in the main, will receive a decrease due the changes of the Revenue and Financing policy, but an increase overall due to the proposed 8% average increase in 2021/22. To find out how you will be affected and what your rates will be, you can visit our rates calculator.
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