Westbrook resident Joe Douglas still doesn't know how to cover the difference after a rent hike on his pensioner unit. Photo / Mathew Nash
Rotorua Lakes Council has finalised its transfer of pensioner housing management to a private provider, five months after announcing the move.
The agreement, signed on January 15, opens the door to potential redevelopment of ageing units and confirms a shift to market-rate rents, leaving some residents worried about how they will make up the difference.
Last August, the council revealed plans to pass management of the portfolio to Emerge Aotearoa, a community housing provider.
The current system costs ratepayers about $1 million a year, with many of the 152 homes in poor condition. Meanwhile, their council-managed status prevented residents from accessing government housing assistance.
By transferring the portfolio to a registered housing provider, the council said tenants will become eligible for additional support from agencies such as Work and Income, while easing the financial burden on ratepayers.
Residents remain concerned, despite council assurances that tenants relying solely on superannuation will be no worse off for up to two years.
Joe Douglas, a Westbrook resident who lives on a pension, said his rent will rise from $296 to $720 a fortnight. Even after receiving the additional support he is estimated to receive from Work and Income, he expects to be $126 short every two weeks.
“I don’t know how the council think they’ll make up the difference,” Douglas said.
“They mentioned subsidising power bills, but I’ve heard nothing and don’t know how that’s supposed to work.”
He said the uncertainty was constant.
“It’s always on your mind.”
He said the figure equated to his food bill.
“Am I going to have to stop eating?” he said.
“They need to find a better way. From what I understand, none of this is illegal, but it certainly seems immoral.”
His neighbour, Margaret Tutbury, said the stress of not knowing how residents would cope financially had been the hardest part.
“It’s all the residents talk about,” she said.
“Not our aches and pains. It’s the bills and how we’re going to buy food and still live.”
She said one resident had moved into a rest home after months of anxiety.
“The stress is very bad, and you don’t know what you’re going to do,” she said.
“You don’t want to move in with family either and be a burden, so what do you do?”
Council infrastructure and assets manager Stavros Michael said the council “remains committed” to ensuring residents who rely solely on superannuation will be no worse off for up to two years.
He said market rents had been set by an independent valuer, considering factors including length of tenancy, location, car parking, amenities, outlook, size and condition of each unit.
The change was necessary to keep the portfolio financially viable and reduce the burden on ratepayers, he said.
Some residents had expressed concern about signing new tenancy agreements as part of the transition, and a small number were hoping refusal might prevent the deal. Michael said that would not be the case.
“Residents won’t need to sign new tenancy agreements,” he said.
“Their existing agreements will be transferred to Emerge Aotearoa.”
Michael said work was nearly complete to bring all tenanted units into compliance with Healthy Homes standards, including heat pump installation and draught stopping.
Of the 152 units, 48 are vacant. Of those, 32 require full refurbishment before they can be reoccupied, and no decision has yet been made on their future.
“There has always been the intention to explore opportunities for future expansion of the portfolio and that work is yet to be done,” Michael said.
Any redevelopment decisions would sit with councillors.
Emerge Aotearoa housing trust general manager Hope Simonsen said redevelopment of some pensioner housing was inevitable.
“Some units are very tired,” she said.
“You could spend $100,000 per unit and still not achieve good amenity.”
She said vacant units could be used to temporarily relocate tenants during any redevelopment, and Emerge and the council had been cautious about filling empty homes during the transition.
Regarding rent increases, Simonsen said the previous model was “unsustainable”.
“You can’t lose a million dollars a year,” she said.
“There is a balance between affordability and what people are entitled to.”
She said Emerge would work with each tenant to maximise the government support they were eligible for, and that tenant wellbeing was the organisation’s first priority.
“We want to reassure people that we’re here to provide good service and support,” she said.
“[The] council engaged us so tenants would have someone to call, a dedicated tenancy team, and we know we’ll do a good job.”
Management of pensioner housing at Westbrook and Domain Ave will transfer to Emerge on February 1, with all remaining sites following on March 1. Rents across the entire portfolio will increase from that date.
Mathew Nash is a Local Democracy Reporting journalist based at the Rotorua Daily Post. He has previously written for SunLive, been a regular contributor to RNZ and was a football reporter in the UK for eight years.
- LDR is local body journalism co-funded by RNZ and NZ On Air.