Pensioner housing rents are set to increase by $20 per week as the Whanganui District Council seeks to balance its books.
Council says pensioner housing is not funded from rates and that it remains committed to keeping it that way.
"We have committed to ensuring that the pensioner housing activity will not require ratepayer funding and are continuing to review how we support our community's housing needs," supporting documentation to its annual plan states.
Council provides pensioner housing to those who can demonstrate limited financial resources, are over 55 years and can live independently.
"Currently the rental income struggles to pay the operating costs and debt is forecast to increase in most years as maintenance is required," council says.
Council owns 275 pensioner units in 16 separate complexes in different parts of the city, as well as eight relocatable granny flats and provides a limited level of welfare assistance to the tenants.
Demand for the housing has increased in recent months and there is a waiting list. Council puts the increased demand down to movements in the market in terms of house sales and private sector rental increases.
Council consulted with the community on divesting the pensioner housing portfolio in its 10-Year Plan 2015-2025. After receiving community feedback, council decided to obtain more information about the broader social housing needs in the community and whether there is an opportunity for the council to assist beyond just pensioner housing needs. A working party was formed to investigate and the following issues were highlighted:
There is an emergency housing shortage
Existing units do not cater well for those with mobility challenges
The funding model employed by the Council is not sustainable
There is a lack of co-ordinated response for gathering information and guidance for housing within Whanganui
As part of the 2017/2018 annual plan, council says it will consider improving the financial sustainability of the portfolio while still supporting those on lower fixed incomes, by moving from the current policy of tenancy rental at 27% net of National Superannuation ($103.50 per week rent), to 27% gross of National Superannuation ($123 per week rent) staged over a period of three years.
Based on $20 per unit at a targetted 80 per cent occupancy of the entire housing portfolio, the increase amounts to about $225,000 in revenue. Council says this will create a more sustainable portfolio. It will also bring council rents in line with national pensioner housing rents.
Council says it also plans to explore how the it might, in partnership with other community groups and community housing providers, better meet Whanganui's social housing needs, but does not elaborate.
Stephanie Clare, Chief Executive of Age Concern New Zealand said she was concerned about any increased costs pensioners may face.
"Any additional financial pressure on older people with fixed incomes concerns us," Ms Clare said.
"We want older people to have healthy lifestyles with good nutrition and chances to be social and stay connected. We know that when there is a strain on the budget that food and social activities tend to be paired back."
The closing date for feedback on the Annual Plan 2017/2018 Consultation Document is 4.00pm on Wednesday, 10 May 2017.
Submitters who have indicated they wish to speak on their submission will be contacted. The hearing dates for public submissions are May 16-17.
The council will hold its deliberations on May 30-31.
The final plan is due to be adopted on June 19. If for any reason it is delayed, the council has until June 30 to adopt it. The Annual Plan will be publically available within six weeks of its adoption.