Rent increase back on cards for pensioner tenants in Stratford

Residents of the pensioner units in Stratford are concerned by a proposed rent increase put forward by Stratford District Council, the property owner. Photo / Ilona Hanne

A rent increase of just over $20 a week is back on the cards for the residents of Stratford’s pensioner housing units.

In a February meeting this year, councillors decided against approving an updated Housing for Older Persons Policy which would have implemented that rent increase, instead asking council staff for more information to be brought to a future workshop before a decision was made.

That workshop took place on Tuesday, March 12, and included a range of information and data for councillors to consider, including details of comparable market rate rent costs across other towns and cities, and how 80 per cent of that market rate had been calculated for the pensioner units.

The 80 per cent was a number elected members had previously settled on in January this year, when working through budgets ahead of the Long Term Plan. At that time, councillors had decided to increase the rental cost of council’s 10 one-bedroom pensioner units from their current rental of $140 a week, which is 40 per cent of the current market rate, to 80 per cent of the current market rate, with the proviso the increase would be incremental for current tenants over a period of four years.

At Tuesday’s workshop, councillors were able to determine what options they would like to have in a future decision report on the subject.

While no binding decisions would be made at the workshop, the discussion would then flow through into a new report for councillors to adopt or reject at their next Policy and Services meeting, mayor Neil Volzke reminded councillors at the start of the workshop.

The hour-long workshop was attended by all councillors bar Clive Tongaawhikau and Jono Erwood, who had put in apologies.

Councillor Vaughan Jones said while he had originally felt the rental should be set at 80 per cent of market rent, he was now reconsidering this.

“As I’ve thought about it, I now think 80 per cent it too high. We also need to consider the social aspect. The tenants are in those rentals for a reason.”

Mayor Neil Volzke said, since hearing the concerns of some of the tenants, he had decided to find out more information around the support available for tenants on a low income.

“I contacted MSD [the Ministry of Social Development] and went through the process. I had to make some assumptions but there are some guides around what is available. A single pensioner currently receives $992.70 fortnightly in the hand and potentially can get an accommodation supplement of $140 per fortnight on top of that. So there are provisions made by MSD for help. There is a safety net including other temporary allowances for medical or other unexpected costs.”

Councillor John Sandford said he acknowledged the rent had been low for too long.

“But I am hesitant to move into a rent increase every year, I would much prefer any increase was three yearly, not annually.”

Councillor Ellen Hall said she acknowledged council staff may feel frustrated the discussion was back in a workshop and a decision was still to be made.

“But the extra information we now have is reassuring, as we can see how the rent is set, how the calculations are done.”

Part of that information showed what percentage of market rent was needed to cover all costs around the units, she said.

“Looking at that, it costs us around 76 per cent, so I would be happy with 75 per cent of market rate being the rent amount.”

Currently, said councillor Grant Boyde, “only 46 per cent of cost is covered by the tenants, leaving the rest to be covered by the ratepayer”.

He agreed with councillors Jones and Hall “regarding the social aspect to be considered”.

He was supportive of a final amount of 80 per cent of market rate for a similar property, he said.

Mayor Neil Volzke asked if other councillors were in agreement.

Eighty per cent was “clean and clear,” councillor Boyde said.

Councillor Steve Beck said he would prefer 75 per cent, as councillors Hall and Jones had suggested.

Councillor Annette Dudley asked what dollar increase tenants would face in the first year if 80 per cent was agreed on.

“Around $22 a week,” projects officer Steve Taylor said.

A range of options would be included in a decision report to be brought to a future meeting, he said.

Councillor Dudley asked for an option of an incremental increase of five years rather than four be included as part of the report.

The decision report will come before councillors in a couple of weeks at the March Policy and Services meeting.

Disclaimer: Editor Ilona Hanne is married to the CEO of Stratford District Council.

Ilona Hanne is a Taranaki-based journalist who covers breaking and community news from across the region. She has worked for NZME since 2011.