Councils across the country were encouraged to build housing villages in the 1960s and again in the 1980s when they were offered low-cost government loans. A lot of councils, including Napier City Council, took up the loans and started to provide council housing.
Of the 377 housing units we have, 80% are for retirees or people with a disability. There are 12 housing villages across the city.
The housing is for people who need low-cost rentals and who are able to live independently. People must meet the income and asset criteria which is outlined here: https://www.napier.govt.nz/services/housing/housing-our-people
There are two categories. The first category is for tenants 65 years plus and those receiving a Supported Living Payment. Rent is set at 30% of tenant income.
The second category is for those who rent a property in the three ‘social’ villages. Rent is set at 92% of market rent of the unit occupied or 30% of tenant income, whichever is lower.
The costs to provide our housing is increasing and the income we receive from rents no longer covers the costs. This year, we will borrow to cover any shortfalls. We can’t continue to borrow to pay for the annual forecasted shortfalls which amount to $2.2 million on average per year.
The costs to provide housing have increased and continue to rise. This is because costs in general have increased and we are having to replace rather than repair as our houses have aged. We provide rent subsidies so our housing is affordable to tenants. The amount we get from the rent no longer covers the costs to maintain our housing service and we have no funds set aside should anything major go wrong.
Just like running a home, there are costs to maintain our properties such as repairs and maintenance, insurance and rates, replacements (e.g. stoves, hot water cylinders etc) and rubbish and recycling. To run the tenancy services, we have office costs, labour costs, legal and consultancy costs (e.g. valuations etc). We are also working to meet the Healthy Homes standards which means a heat pump, rangehood, extractor fans and draft stopping in each unit – multiplied 377 times.
In a nutshell, there are three options:
Keep all of the housing, and fund the shortfall by increasing rates or increasing rent or a combination of rates and rents increases.
Keep most of the housing, but sell the ‘social’ villages, and fund the shortfall by increasing rates or increasing rent or a combination of rates and rents increases.
Keep none of the housing, selling or transferring to an entity in the social housing sector.
Each option has pros and cons. Further information on the options can be found here or in the Statement of Proposal document.
There are three villages that are ‘social’ villages. These villages have mainly 2 or 3 bedroom units focused on providing housing for whānau/families. The villages are located in Nelson Crescent, Wellesley Road and Carlyle St. There are 73 units in total.
Council is not considering a sale on the open market. Entities in the social housing sector include Community Housing Providers (CHPs) – local and national (including Papakāinga providers) and Kāinga Ora. We understand there may be some further local organisations who are applying to become Registered CHPs. There is the potential for councils to come together to form a regional housing trust which could also apply to become a Registered CHP.
Council could use any sale proceeds for any of the following, in consultation with the community:
Yes, this land is zoned residential and has been set aside for future housing.
Yes, they are currently included in the land parcels and a subdivision process would be required to exclude them.
The consultation period ends on 20 April 2022. A hearing is scheduled for 18 May. The hearing is an opportunity for people who have made a submission to present their submission directly to Council. Council will then make a decision on the option it wishes to proceed with.
No. The Council has not identified a preferred option. We are seeking feedback on all three options equally. Council will consider all of the feedback along with all of the other information before it makes a decision on which option it would like to proceed with.
Council is keen to get feedback from the community about the Future Provision of Council Housing. You can fill in a submission form online at sayitnapier.govt.nz or pick up a submission form at our Customer Service Centre or at the Napier or Taradale Library. Submissions close at 5pm on 20 April 2022.
Maybe. The two options that have Council keep all or most of the housing create a shortfall that needs to be funded. This shortfall could be covered by a rates increase, a rent increase or a combination of the two.
It depends. If the rent setting formula changes to a percentage of market rent as proposed, the market rent will be reviewed at regular intervals. Rents can only be increased once in a 12 month period. Because there would be a substantial increase under the proposed options, the initial increase could be phased in over a couple of years.
The Council wants to keep the special character of the village intact even if it decides to sell the housing, so this would be a condition of any sale.
Tenants may be eligible for Accommodation Support payments or an increase to their current payments through Work and Income.
If the decision is to sell some or all of the units, then Council intends to make it a condition on any sale that current tenants eligible for Council housing will be able to stay renting their unit.
No current tenants eligible for Council housing will have to leave their units with any of the options currently being considered.
There are rent increases under the continued Council ownership options (Keep all or Keep most). The rent increase varies between the two options and whether there is a rates contribution. Visit Status Quo (Keep all) or Part Sell / Part Retain (Keep most) to view these options further.
The option to sell to an entity in the social housing sector may result in rent increases for current tenants. However, these entities - either Kāinga Ora or a Community Housing Provider - are in the business of providing affordable rental housing and would be guided by this kaupapa.
Tenants may be able to access increased levels of accommodation supplement with any rent increases. Further information on this can be found here.
Council would place a condition on any sale that a new provider continue tenancies with all current tenants who are eligible for Council housing. A new provider will need to enter into a tenancy agreement with current tenants.
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