Far North elderly housing tenants warn rent rises of up to $100 a week are ‘crippling’

Russell Bird, who lives in a Far North District Council pensioner home in Kaitāia, said a $100 a week rent rise will mean he has to ‘cut back further’ as he can’t afford the ‘crippling’ rise on his fixed income.

A Far North pensioner says a council rent rise of up to $100 a week will push him to a financial breaking point.

Far North District Council (FNDC) said the April 1 rent increases - of $16 to $100 a week - at its elderly housing units will cover mounting maintenance costs and deficits.

The council has a $15 million unbudgeted maintenance bill for its 144 units.

Russell Bird lives in a Far North District Council unit in Kaitāia, where he faces a 45% rent rise, about $100 a week.

“It’s crippling for me and so many others,” Bird said.

“We’re on fixed incomes and we have already had to cut back ... as the cost of living just keeps rising.

“We have to forgo so many important things - seeing grandkids, visiting friends, good food and new clothes. It’s just too much on top of everything else we are facing.”

The council has changed its rent calculations, saying it spent months working out how to keep them affordable while covering the rising cost of maintaining warm, safe homes.

Rent reviews will no longer be tied to annual Consumer Price Index (CPI) adjustments.

Instead, rents will be the least expensive of: 60% of market rent or 30% of net NZ Superannuation, plus the maximum accommodation supplement applicable to the unit’s location.

For those receiving the accommodation supplement, increases will be between $16 and $28 per week. Those who do not, such as Bird, may see increases of $50 to $100 per week.

FNDC group manager Hilary Sumpter said the rent review process had not changed since 2010, and operational costs now exceeded rent income.

Operational costs included insurance, grounds care, general repair and maintenance to the buildings and equipment. Excluded is capital expenditure for upgrades or major repairs.

Tenants at the Far North District Council’s 144 elderly housing units, including this one on Puckey Ave, Kaitāia, face rent rises of $16 to $100 a week.

Sumpter said general rates subsidised the operational cost shortfall - forecast at about $230,000 without any changes to the rent - but that was likely to increase because of deferred maintenance needs.

“This has implications for wider council budgets and other services.”

Sumpter said the updated rent-setting method aimed to keep rents fair for tenants while ensuring the service remained financially sustainable.

Far North Grey Power secretary/treasurer Sandy White called the increase huge. She said elderly people were already on tight budgets with the pension their only income.

White was aware some elderly housing units had been empty for some time.

She believed had the council put money into fixing those units, then that rental income may have eased the financial burden on ratepayers.

“If you are a landlord and your property is empty you are not getting any income from it. So, it makes sense to get them fixed as soon as possible so you get the income back, not wait a couple of years. That can then pay for any repairs done. They are doing it the wrong way round here,” White said.

Of the 144 units, 129 were tenantable.

Sumpter said 15 empty units required major upgrades to reach that point, and one had been vacant since February 2023.

In response to White’s claims about carrying out repairs sooner, Sumpter said capital expenses - which are upgrades or major renewals, such as a roof replacements or bathroom renovations - were additional unbudgeted expenses estimated to cost about $15 million across the next 10 years.

“At present, these sorts of works are not funded through the Long-Term Plan,” she said.

The council has looked at the future of the units, which includes possibly selling them or working with community housing providers.

In 2022 the council called for expressions of interest to buy the units, but this was impacted by changes to government funding mechanisms.

Sumpter said the council was working with Far North Holdings to better position the portfolio for future opportunities to work with Community Housing Providers.