Tauranga City Council has confirmed plans to sell its elder housing portfolio, resulting in the possible relocation of 45 elderly tenants.
The council is in formal negotiations with public housing provider Kāinga Ora regarding the potential sale of its nine separate elder housing villages, involving a total of 248 tenants.
However, two of these villages - considered to be at an "end-of-life" status - are proposed to be sold on the open market, partly due to their high Mount Maunganui real estate value.
Council general manager of growth and strategy Christine Jones said the Hinau St and Pitau Rd villages were identified as being in the non-priority location for public housing.
Other areas in the city had a higher need for public housing and were considered a more immediate priority for redevelopment, she said.
The combined estimated market value for the two Mount Maunganui properties was about $18 to $23 million.
Jones said selling the villages was the council's "preferred option", rather than keeping them in the portfolio proposed for sale to Kāinga Ora.
The potential sale would clearly "assist" the council's financial position but the estimate of what the portfolio - as a whole - could sell for needed to be reviewed, Jones said.
In November 2020, senior council staff said they needed to spend $4.3 billion on infrastructure over the next 10 years but didn't know how to pay for half of that, identifying a $2b funding hole.
Jones said money made from the potential sale of the elder villages would go towards papakainga and community housing plans.
If sold, the 10 tenants from Hinau Street village and 35 from Pitau Road would be relocated to other elder villages in Tauranga. Rental assistance of $160 per week for 12 weeks would be offered to help cover any small unforeseeable costs.
The location of the two Mount Maunganui villages meant they were simply not suitable locations for public housing, she said.
"The other fact is both of these villages are at end-of-life. They were built a long time ago. They won't continue to be suitable for housing."
One of the units at Pitau Road village has been permanently closed because of ground subsidence making the unit "not fit for habitation".
When asked if the council considered developing the two Mount Maunganui sites themselves, Jones said "not at this point".
"It's likely that we'll be looking to get some really good urban outcomes ... so density quality of urban form, etc would be things we would think about."
Whether these could be included in potential caveats "would be our expectation", Jones said.
Tenants were informed yesterday of the plans but it would not be until the end of July whether the council, and tenants, would know which option would be approved as part of the Long-term Plan process.
The response from tenants was mixed, Jones said.
However, the council's "key principle" was that existing tenants would be looked after in affordable accommodation, she said.
A council position has been created specifically to oversee the relocation of all tenants.
"We are not going to require someone to move out of their home without having somewhere suitable for them to go to, that's our commitment ... they will stay where they are until we can find somewhere, so people aren't left on the street. That's an underlying principle.
"It might not be in the existing location but [they] would continue to be provided with a home."
The talks follow community consultation in 2018 when the council first proposed and decided to sell all nine villages to a public housing provider to better ensure the long-term sustainability of the city's public housing.
Jones said the proposed sale of elder housing would come with conditions to ensure they were retained for affordable housing.
Kāinga Ora Bay of Plenty regional director Darren Toy said that while it was early days, "we are excited".
"Our top priority is the wellbeing of those tenants and making sure every one of them has a place to call home."
Toy said Kāinga Ora supported the council's preference of going to the market with the Mount Maunganui villages.
Pitau Road village tenant Neil Munro said the reaction from fellow tenants "was always going to be mixed".
"We have people here in various stages of being old, if I may put it that way. We've got some people who have been in the village 20 years or more and others who are considerably younger, with a different view on things.
"I'm 76 so I'm neither an oldie or a youngie. I've been here 10 years and my feeling is that this was no surprise for us."
Munro said there had been plenty of meetings and the writing had been on the wall, especially given the age of the 1967-built village.
Submissions can be made as part of the Long-term Plan consultation process, which will take place in May.