The Revenue and Financing Policy explains how we cover our costs for all the different services and activities we provide. It sets out what sources of funding we can access for these services and activities, e.g rates, reserves or loans. We are required to have this policy by Law.
We can only fund our core activities in the Long Term Plan as provided for in our Revenue and Financing Policy. We heard a significant amount of feedback on the policy earlier in the year and made an amendment, which allows Council to approve the use of loan funding for operational costs on a case-by-case basis. We[NM1] 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 are seeking your feedback on this proposal.
The money we receive from our tenants in rent is no longer enough to cover the operational costs associated with providing affordable rental accommodation. We provide 377 rental units across the city for retirees and people on a low income. Without using funding from other sources we would have to increase our tenants’ rent, which means we wouldn’t be providing affordable housing anymore.
We have signalled for some time that the current approach to funding housing is not sustainable. Over the last few years we have pared back spending by only doing the bare minimum of repair work. We cannot continue doing this, as work to upgrade our units to be compliant with Healthy Homes Standards needs to be completed by 2024. This work is expensive and the costs cannot be met through rent alone.
Yes we are. We had hoped this work would be finished by now but unfortunately, the review was interrupted due to the impact of COVID-19 and the more recent Napier rainfall event. Options for the future of our housing could include transferring the portfolio to another entity (e.g. a Community Housing Provider), or selling some of our units. We anticipate being able to consult with the community on the review in the next 12 months.
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