A charitable trust backed by The Warehouse founder Stephen Tindall says it could help beat the recession by building affordable houses - if it gets support from the Government or other funders.
The Housing Foundation, set up with a $1 million grant from the Tindall Foundation, has borrowed $6.5 million from state-owned Housing NZ and raised a further $18.5 million from commercial sources to build 70 new homes on a 4ha block of former farmland off West Coast Rd in Glen Eden.
Bank officer Terence Smith, his wife Belinda and their 4-month-old son Daniel are among the first 11 families who moved into new "shared equity" homes on the site just before Christmas.
They put up 80 per cent of the cost of about $400,000 for their four-bedroom house - a $10,000 deposit and the rest from a mortgage.
The remaining 20 per cent stake in the house stays with the Housing Foundation until the Smiths can afford to buy it out. In effect, it is like an interest-free second mortgage.
"That has made the instalments of the loan manageable," Mr Smith said.
"When I first heard about it I thought it was some kind of scam - where's the catch?"
Housing Foundation executive director Brian Donnelly said the foundation was filling a gap in the market for people who were too rich for state housing but could not raise either the deposit or the income required to buy a first house on the open market.
For the Glen Eden houses, the foundation requires only a deposit of $10,000 and a household income of at least $55,000. Its house prices range from $270,000 for two bedrooms up to just over $400,000 for five bedrooms.
The foundation has also agreed with Auckland City Council to build 30 shared-ownership houses over the next three years for first home-buyers who work in Auckland City with household incomes between $50,000 and $90,000 a year. Mayor John Banks' council has cut its subsidy to this project from $9 million over 10 years to $3.8 million.
"We are now interested to hear from people interested in that opportunity," Mr Donnelly said.
Although in theory the Smiths could have bought 100 per cent of a $320,000 house instead of 80 per cent of one worth $400,000, Mr Donnelly said they should not have been forced into poor-quality housing.
"The quality and amenity of these existing houses does not go anywhere near what is being provided for these families - a warm, safe, healthy home with low maintenance for the foreseeable future."
He said the foundation was keen to develop similar schemes throughout the country in co-operation with local trusts.
"With the economy the way it is, and people's need, we feel we can partner with Government and builders and local authorities in a collective way to do a hell of a lot more," he said.
But he said this would need Government backing.
"Some form of joint-venture funding approach, ie a matched public and private sector funding arrangement, along with access to the development of surplus Crown land suitable for housing projects, would be critical components," he said.
The National Party's election policy promised a new scheme called "Gateway housing" where "public land is developed for first-home buyers directly or in partnership with community housing organisations".
The party also promised to boost a Housing NZ fund used to lend money to community housing trusts from $12 million a year at present to $20 million.
But a strategy paper produced by Community Housing Aotearoa says the Government contribution needed to be "substantially larger" than that.