A local trust is making it possible for those on low and middle incomes to enter the property market with their affordable shared equity programme.
Homes for People was established by Darren and Cheri Birch, who believe the current model of social housing is not sufficiently filling demand.
The scheme relies on social impact investors who offer up equity, allowing the trust to access banks and finance, made possible through their partnership with the New Zealand Housing Foundation.
The trust has purchased a block of land from Housing New Zealand on the corner of Limbrick St, with the foundations of six new homes to start this week. The section will have two two-bedroom units, and four one-bedroom units.
Mr Birch said the scheme was unique in the current environment because the homes would be marketed to first-home buyers at a price they could afford.
"If we have a home that's $250,000 and a person is allowed to borrow $200,000, this product enables them to buy 80 per cent of the house while the trust will own 20 per cent. "Over time they can buy the other percentage."
He said Palmerston North needed to address the lack of appropriate housing for those on low-incomes, specifically the elderly and disabled. The units on Limbrick were designed with this in mind.
"These are the most needed homes that are not financially viable for developers to build. These are compact homes - they're for a raft of people in our community who will benefit from the positive outcomes of living in a stable, healthy home.
"Good homes help build good communities. Homes for People is about providing people an opportunity to lay deeper roots and participate more fully in our community."
Mr Birch said the trust had been supported by a number of businesses in the community who had made generous concessions to make the build possible. A key aspect of the process was to make the homes energy efficient, with good urban design.
"Once built it will just look like there are a couple of homes there -- this is something we're conscious of."
He said if Palmerston North continued building dwellings at its current rate, there could be a shortfall of as many as 5900 by 2031.
Part of the trust's mission will be to retain some properties as social and transitional housing, providing tenants with wrap-around services. They also offer an Affordable Rental programme, giving tenants long-term tenancies and time to save a deposit.
Find out more at www.homesforpeople.co.nz or check out Facebook, Homes For People.