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Part Retain / Part Sell

Part Retain / Part Sell (Keep most)

This option retains 300 retirement units in 8 villages. It proposes to transfer (sell) the three social villages to another entity within the social housing sector. The sale proceeds would be put towards the cost of developing 49 new units. The new development would take place on existing sites.

The four units at the Hastings/Munroe village would be demolished and 11 new units would be built. Current tenants would be rehoused. The 11 new units would be rented at full market rent. The second site, Greenmeadows East  would see the development of 38 new units.

This option loses 76 houses and builds 49 new units.

This option generates an average annual deficit of $2.3 million and without any rates or increased rent adjustments the shortfall would reach $65.9 million after 25 years (2046). To cover this shortfall, an increase to rates or and increase to rent, or a combination of a rates and rent increase is required. The impacts to rates and rents are shown on the bar below. We have provided two examples of a rates/rent split – if Council selects the split option, the actual split would be based on the benefit and impacts to each party.

The current rent setting formula will have to be changed from 30% of tenant’s income to a percentage of market rent. Because this could be a significant increase for some tenants, the increase could be phased in over a number of years. Until the full increase is applied, the shortfall could be funded through loans, as outlined in Council’s Long Term Plan 2021-31


  • Key benefits of this option include the refocus to providing housing to retirees or those with a disability only, it retains the majority of housing and land in Council ownership with a higher level of certainty for retirement tenants. It adds new, fit for purpose housing to the portfolio. It allows Council to retain full control of the asset and tenancy policies. Moving to a subsidised market rent policy provides predictable income and reduces the administration that income related rent settings cause. In the case of tenants funding the full costs, financial impact to the ratepayer could be low in the medium term.
  • The development at Hastings/Munroe creates a higher level income source in the longer term. The development of the two sites offer potential partnership (and possibly co-funding opportunities) with PSGEs, Iwi and/or Kāinga Ora.
  • Retaining the housing portfolio places Council in a position to take advantage of opportunities any Local Government reform may provide.
  • The sale of the three villages would impact the current tenants in these villages, and depending on the buyer could either have a positive or a negative impact. The preference to retain the housing for community housing would likely result in a positive impact.


  • This option does not create any additional housing to meet growing demand, or any upgrades to existing housing to meet modern living standards or accessibility. It does not address the issue of the deteriorating condition of the units, and while replacing componentry will extend the life and buys some time, ultimately decisions on full replacement may still be needed in the future. The need to pay for replacements might arise earlier than forecast and this will be challenging given the lack of current cash reserves and the time needed to build these up.  While rent increases may potentially be unpopular with current tenants, and in some cases unaffordable, the opportunity for the housing to remain with Council may outweigh these concerns.
  • In the case of ratepayer contribution increasing, the financial impact on ratepayers could be significant on an ongoing basis.
  • Council currently does not have the resources in-house to manage the new developments and the cost of outsourcing this is relatively unknown. The ability to secure consultants and contractors is currently challenging. Availability of building materials may also create project delays and increase costs.
  • A key challenge with this option is the added complexity and uncertainty regarding both the sale of the three villages and the development aspect. Complexity and uncertainty increase the risk.

What financial impact will this option have on rate payers and tenants?

Click on the options to fund the annualised shortfall to see how each option impacts ratepayers and tenants.

Disclaimer: Please note this interactive graphic is for demonstrative purposes only. Although the values shown are based on real figures, they have only been provided as an example to show how costs may be distributed under this option. Actual figures are subject to change.

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