Council underwrites housing bond issue

Councillor Cathy Casey. Photo / Natalie Slade

The Auckland Council has agreed to underwrite "housing bonds" worth $30 million to kick-start more than 200 new homes for low-income families.

The council's development committee voted 14-5 yesterday to guarantee 20 per cent of the bond issue, or $6 million.

The guarantee will allow community housing providers to borrow on more favourable terms, reducing the costs of homes by between $6000 and $8000.

Councillor Cathy Casey said the move would grow the community housing sector and "give them wings to fly".

Councillor Chris Darby said it was a clever, low-risk, low-cost move by the council and committee chairwoman Penny Hulse said the innovative proposal would add to the council's initiatives in creating affordable housing options for Aucklanders.

Community Housing Aotearoa welcomed the "innovative and proven" approach.

Director Scott Figenshow said it would allow the community housing sector to raise money to build affordable homes and provide seed capital to meet any delays in repayments of the initial homes.

The bonds would help build homes similar to those at Waimahia Inlet by Tamaki Makaurau Community Housing, which cost about $345,000, he said.

Community housing organisations already provide more than 1100 homes in Auckland, meeting the needs of more than 3500 people.