Nelson City Council transfers community housing to Kāinga Ora for $19.8m

The transfer of 142 community housing units from Nelson City Council to Kāinga Ora is a mutually beneficial agreement that will increase investment in housing in Nelson, while retaining access to community housing for existing tenants.

This agreement also supports the shared housing priorities of both Kāinga Ora and Council by creating a Housing Reserve for the purpose of supporting affordable and social housing projects in Nelson.

$12m from the sale will be available to the Reserve immediately on settlement, with $5m held back for up to 15 years for any share of the costs required for units that may undergo retrofitting and renewal, consents for expanding the housing and rent top-ups, should any be necessary, for tenants who do not qualify for the government rent subsidy. The remaining $2.7m will be used for Healthy Homes upgrades to the housing, and to pay back a loan from Kāinga Ora for the upgrade of the Orchard Street flats.

Nelson Mayor Rachel Reese says the transfer follows the Special Consultative Procedure in 2019 that asked for the views of Nelsonians on divesting the properties to a new provider. Having heard and considered 79 submissions, Council approved divestment in June 2019.

“The new Housing Reserve is excellent news for the community, and a resounding investment from Kāinga Ora in our Smart Little City. What’s more, this is an agreement that continues to prioritise the welfare of our existing community housing tenants.

“There will now be a handover period where our tenants will be supported as their tenancies switch to Kāinga Ora.”
Kāinga Ora was established on October 1, 2019 to lead the government’s urban development projects and be a world-class public housing landlord. Three entities, HLC, Kiwibuild and Housing New Zealand, joined to form the new agency.

Kāinga Ora Area Manager Dale Bradley says the organisation has a significant presence in Nelson and is looking forward to forming close relationships with community housing tenants.

“Kāinga Ora has many years of experience of running social housing, and our team of local staff are really excited and looking forward to meeting our new tenants and working to support them in their communities.’’ says Bradley.

The new ownership under Kāinga Ora would take effect in February 2021. In the lead up to the transfer, Council will work collaboratively with Kāinga Ora, the Ministry of Social Development (MSD) and the Nelson Tasman Housing Trust to ensure community housing tenants are well informed, reassured and supported.

Over the next few weeks, MSD staff will contact and support each tenant with an assessment, which all public housing tenants require, and make sure they are getting all the financial support they’re entitled to.

Waitlists for Council community housing, Nelson Tasman Housing Trust housing and the MSD’s housing register for the region have been hitting all-time highs. There has been just over 100% increase in applicants on the government’s housing register for Nelson since the 2018 Census and there are 20 times more applicants than five years ago.

Mayor Reese said the agreement with Kāinga Ora is a strong sign of both organisations’ commitment to improving the housing situation in Nelson.

“We know that the need for affordable and social housing is continuing to grow. This agreement is a significant opportunity to help provide quality housing for Nelsonians who might otherwise struggle to find a home on the private market.”
 
Kāinga Ora background: 

• Kāinga Ora, as at June 30, 2020, owns 563 properties in the NCC Territorial Local Authority.
• This comprises of 41 one-bedroom, 286 two-bedroom, 201 three-bedroom, 28 four-bedroom and 7 five-bedroom properties.
• The NCC portfolio of 142 properties is located across nine complexes providing 49 bedsits, 50 single and 48 double bedroom units for elderly tenants.
• This transfer would therefore see Kāinga Ora’s presence in the Nelson community increase to owning and managing 705 properties.

Nelson City Council background: 

• Council undertook a Special Consultative Procedure in 2019 to hear the community’s views on divesting the community housing to a provider that could upgrade the units and expand provision through access to government or other funding.
• As a registered housing provider, HNZ (now Kāinga Ora) is eligible to receive the Income Related Rent Subsidy, unlike Council, which does not have that status.
• Having heard and considered 79 submissions Council approved divestment. The Long Term Plan was amended to reflect this change and this was then approved by Audit New Zealand.
• Since that time, Council has undertaken a Request for Proposal and a long and careful negotiation to achieve an agreement that provides security for the current tenants, as well as a good outcome for the city as a whole.
• Many of our tenants will qualify for central government’s rent subsidy, but for the small number who may not quite meet the criteria, there is an amount of money set aside to provide rent top ups.