A “landmark” central Wellington social housing block, once famed for its significance in New Zealand’s social development, has been sold by the state housing agency.
In late 2022, Kāinga Ora described the 11-storey Dixon Street Flats as “old and no longer fit for purpose” and began relocating tenants from the 117 units to other social housing sites.
The site has sat derelict since the last tenants were moved on late last year, with a resource consent issued for temporary mothballing.
The agency has now announced it has sold the building for $1.04 million to Taranaki Whānui Limited, the commercial organisation set up to manage the Treaty settlement package for local Wellington iwi Taranaki Whānui.
“While this is below the property’s most recent valuation, we are comfortable that the price reflects the unique value of the building.”
The property’s most recent rating valuation is $18.9m.
Kāinga Ora said the extent of work needed to upgrade the building is “extremely high”.
“After carefully considering the cost and complexities of continuing to use this historic building for social housing, we decided selling it would be the best course of action as it would open up opportunities for others to make use of the building,” said Kāinga Ora’s deputy chief executive central, Daniel Soughtton.
Housing Minister Chris Bishop said the sale is “a good outcome for Wellington”.
Bishop revealed cost estimates for remediation and strengthening were costed at more than $125m, more than $1m per apartment.
“Instead of allowing the Dixon Street Flats to become another derelict Wellington eyesore, Taranaki Whānui Limited has purchased the property using their right of first refusal under their Treaty settlement. I look forward to seeing what they do with it,” Bishop said.
The iwi have the first right of refusal for Crown land in the area under the Port Nicholson Block Settlement.
The agency also noted the high ongoing cost for security on the building. Last year, it said it faced “significant challenges” with squatters and unauthorised entry, spending $124,012 on security guards between June 3 and August 18.
Last year, the agency would not confirm its plans for the site, but a Tenancy Tribunal document showed it was considering selling the property.
The Dixon Street Flats have always been used as social housing, being built in the 1940s as a part of the first Labour Government’s state housing programme. They were the second block of social housing apartments to be built in New Zealand, after the first were completed in Berhampore.
The building has the highest level of heritage protection, listed as a Category 1, and is not listed as earthquake-prone on the Ministry of Business, Innovation and Employment’s earthquake-prone building register.
Heritage New Zealand describes the building as an “archetype of Modernist apartment blocks in New Zealand” that “marked a new era of domestic architecture”.
Wellington City Heritage said that when it was built, the project “was of a magnitude unprecedented in the history of domestic architecture in New Zealand and caused considerable excitement”.
When the building was boarded up last year, residents’ association Inner-City Wellington urged Kāinga Ora to make progress on the site, saying leaving it vacant was “outrageous”.
“It’s a cornerstone to our inner-city residential population”, the association’s chairman, Reverend Stephen King, said at the time.
The nearby Gordon Wilson Flats were built in the same era as the Dixon Street Flats as part of the Government’s state housing programme. That 11-storey building is now owned by Victoria University of Wellington and has sat empty on The Terrace for more than a decade.
Bishop yesterday passed an amendment to the Resource Management Act to remove the protected heritage status of the Gordon Wilson Flats, making them eligible for demolition.
The university is working through a business case for the site, with the preference for constructing purpose-built student accommodation.
Ethan Manera is a New Zealand Herald journalist based in Wellington. He joined NZME in 2023 as a broadcast journalist with Newstalk ZB and is interested in local issues, politics, and property in the capital. He can be emailed at ethan.manera@nzme.co.nz.