We carried out consultation on a range of funding options from 26 January 2009 to 2 March 2009 using the special consultative procedure. Two hundred and sixty-four submissions were received and of these 27 submitters were heard by a Council hearings panel.
It was clear from the consultation that the community wants the Council to continue to provide social housing and that it be done in a self-sustaining way without rates input. It was concluded that the only way in which this can be achieved is for rents to increase to cover the cost of the service provided, or alternative sources of funding becoming available.
Consequently, following the consultation process at its 23 April 2009 meeting Councillors made the following decisions.
Funding options
(a) To seek financial assistance from the Government for the future replacement of the Council’s social housing portfolio.
(b) To instruct the Council’s Housing Working Party to convene a meeting with key stakeholders, for the purpose of exploring possible funding options.
(c) To instruct the Housing Working Party to carry out the following reviews, to be completed by 30 November 2009:
(i) The social housing policies currently listed in the Council’s policy register. This review is to include the criteria for determining the eligibility of social housing tenants, and the ability of the Council to obtain information about eligibility from tenants.
(ii) The ‘cost of consumption’ model, the assumptions underpinning it, the results it produces and the impact on funding requirements that the model generates.
Rents for 2009
(a) To provide for the ongoing maintenance of the Council’s social housing portfolio by increasing rents for all existing housing tenants (except Whakahoa Village tenants) by 14 per cent from the beginning of the first rental period in July 2009 and for all new tenancies (except Whakahoa Village tenancies) beginning on or after 1 May 2009.
(b) To increase rents for Whakahoa Village tenants by an amount equal to the 2008 increase in the Capital Goods Price Index (CGPI) from the beginning of the first rental period in July 2009 and for all new tenancies beginning on or after 1 May 2009.
(c) Where tenants choose to rent garages or carports at any of the Council’s social housing complexes, increase rents for these facilities at the same levels referred to above.
Rents for 2010 and beyond
(a) If there are no alternative sources of funding the future replacement of the Council’s housing units available and in place before 31 March 2010, increase rents for all existing housing tenants (except Whakahoa Village tenants) by:
(i) 5.7 per cent from the beginning of the first rental period in July 2010 and for all new tenancies (except Whakahoa Village tenancies) beginning on or after 1 May 2010.
(ii) 2.8 per cent plus CGPI from the beginning of the first rental period in July 2011 and for all new tenancies (except Whakahoa Village tenancies) beginning on or after 1 May 2011.
(iii) 2.8 per cent plus CGPI from the beginning of the first rental period in July 2012 and for all new tenancies (except Whakahoa Village tenancies) beginning on or after 1 May 2012.
(iv) 2.8 per cent plus CGPI from the beginning of the first rental period in July 2013 and for all new tenancies (except Whakahoa Village tenancies) beginning on or after 1 May 2013.
(v) 2.8 per cent plus CGPI from the beginning of the first rental period in July 2014 and for all new tenancies (except Whakahoa Village tenancies) beginning on or after 1 May 2014.
(b) Increase rents for Whakahoa Village tenants by an amount equal to the 2009 increase in the Capital Goods Price Index (CGPI) from the beginning of the first rental period in July 2010 and for all new tenancies beginning on or after 1 May 2010.
(c) Apply any alternative funding received to reducing the rental increases (except for Whakahoa Village) referred to above.
(d) Where tenants choose to rent garages or carports at any of the Council’s social housing complexes, increase rents for these facilities at the same levels referred to above.
Background
The Council's 2,649 social housing units were built between 1938 and 2007, with just over half of them built between 1970 and 1984. Generally, the units are in reasonably good condition, although their renewal must be taken into account in calculating funding needs.
The Council's housing policy requires our social housing to be financially self-supporting and not funded from rates. However, in recent years, the cost of operating and maintaining social housing has exceeded the rental income intended to meet that cost. Because of the age of some of the units, significant expenditure on refurbishment and renewal is expected in 2015.
