Rotorua Lakes Council and Habitat for Humanity are in discussions about how the latter could take over the city's pensioner housing.

The council owns 152 pensioner housing units across five locations in Glenholme, Fenton Park, Westbrook and Ngongotahā.

After a 2017 review of the housing, the council considered selling the units to a community housing provider but found the market value could not be achieved.

At a meeting of the council's Operations and Monitoring Committee this month group manager strategy Jean-Paul Gaston said the council was looking for a way forward where the land was leased rather than bought.

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"The demand for those affordable and pensioner-orientated housing units is increasing as our population increases and our population ages so those are two critical issues."

Gaston said leasing the pensioner housing to a community housing provider had many benefits.

"An entity with the sole purpose to provide that social housing is eligible for a rent top-up so they can receive more money than the council can.

"That enables those community housing providers to expand the stock, keep them in a better condition and provide those wraparound services."

Rotorua mayor Steve Chadwick later told the Rotorua Daily Post ensuring adequate housing and support services for older people was an important aspect of the housing challenge.

"We want to see more and better pensioner housing and access to wraparound health and social services. A community housing provider is better able to achieve this than a council."

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Chadwick said the waiting list for pensioner housing was capped at 50.

"Council has been exploring options with community housing providers and this will continue but it's very important we have the right provider and the right model to achieve the outcomes we need."

After the council asked for expressions of interest from community housing providers, three parties were asked to prepare more detailed proposals. Two did but neither met council requirements.

Both offered a substantially lower price than expected, according to the report received by the Operations and Monitoring Committee.

Habitat for Humanity (Central North Island) is the only provider investigating an alternative proposal where the land is leased.

Habitat for Humanity general manager Nic Greene said the organisation was interested in taking the process further.

"We have been active in Rotorua for many years. We currently operate social or subsidised rental housing and have families going through our assisted home ownership programme in Rotorua," Greene said.

"Any further provision of housing services in Rotorua would be a natural extension of our existing work."

The organisation already has pensioner flats in its housing portfolio with an independent living facility for older people in Te Awamutu.

Age Concern Rotorua manager Rory O'Rourke told the Rotorua Daily Post housing was one of the top areas of concern for elderly.

"Any improvement to pensioner housing would be beneficial.

"I think Habitat for Humanity do a good job and if they are to get more funding that's fine. I don't have an issue as long as they don't take over and leave them as they are."

The Rotorua community was asked to provide feedback on the council's pensioner housing proposal during Long-Term Plan consultation.

Objectives of the sale
Council considered selling the pensioner housing to a social housing provider to best ensure:
- Provision could be made for a more financially viable and sustainable service.
- Support services for vulnerable tenants.
- Optimise government funding.
- Attract investment to improve the assets.
- Grow the social housing asset.