Whanganui District Council proposes stand-alone social housing provider to tackle predicted shortfall

Whanganui’s average household income is well below the national average. Photo / Bevan Conley

Whanganui District Council has unveiled a $300 million social housing proposal to provide 1000 new dwellings over the next decade.

It involves establishing a stand-alone social housing provider which would protect the council from financial liability.

Council community wellbeing manager Lauren Tamehana told the strategy and performance committee the district would need an additional 2000 homes over the next decade, with half coming through the current building market.

“I’ve looked at previous building reports and we’ve had 1200 in the last 10 years - residential living units,” she said.

“That’s taken part of some of the market but there’s still a shortfall.”

The council did not have access to the money required for the scheme and it was not eligible for government housing funding, she said.

However, the new entity would be.

A successful example was the Queenstown Lakes Community Housing Trust which had been “leading the way”, Tamehana said.

The trust, a community-owned organisation, was initiated by the Queenstown Lakes District Council in 2007 in response to a lack of affordable housing.

Last year, the Chronicle reported that Whanganui needed to add up to 195 units to its pensioner housing portfolio by 2050 - from 275 to between 460 and 470.

According to Tamehana’s report, as of last September there were at least 318 individuals on the Ministry of Social Development housing register - a 231 per cent increase from September 2019.

The district’s average weekly rent price (now $433) was growing faster than the rest of the country and Whanganui’s average household income in the year to March 2023 was $95,934, well below the New Zealand average of $125,117.

“In terms of affordability - the amount of household income spent on rent - Whanganui ranks 45th out of 66 territorial authorities,” the report said.

“This is encouraging overcrowding in homes.”

Councillor Kate Joblin says the proposal is an opportunity "to do some real good in the community". Photo / Bevan Conley

Councillor Rob Vinsen said that as far as he was concerned, social housing was not the responsibility of the ratepayer.

“As we go through this process, I believe we need to keep that in mind,” he said.

“A community housing provider ringfences that responsibility away from council and that’s one of its great advantages.”

The $300m figure is based on 1000 dwellings at $300,000 each.

Council chief executive David Langford said there was no intention to disrupt tenants living in the council’s pensioner complexes.

It was being put forward to try to maximise the number of houses for older people and to broaden the scope of what the council did with affordable social housing.

“New tenants will likely benefit financially because of central government funding this housing entity would get access to,” Langford said.

If the new entity registers as a community housing provider, it will be eligible for the Ministry of Housing and Urban Development’s income-related rent subsidy which covers the balance between what a public housing tenant pays in rent and the market rent for the property.

Tamehana’s report said the new entity would initially require some asset investment from the council.

That would involve the transfer of the entire pensioner housing portfolio, the transfer of vacant zoned land for development and possibly a capital cash contribution.

Options for land transfers included Gilmour Street, Windsor Terrace, Bamber St, Kotuku St, Laird Park and Swiss Avenue.

The new entity’s portfolio could take a mixed-housing approach, the report said.

That could include affordable social housing, a first home assisted ownership programme/rent to own, pensioner housing, and long-term rentals.

Tamehana told the committee a business case for the new entity would be completed by November, followed by consultation on the transfer of assets.

“All going to plan, work on the transition to the new entity will begin in June 2025.”

Councillor Kate Joblin said it was fantastic that “this slow-boil plan” had finally made it to the council table.

“I think we have the opportunity to do some real good in our community in terms of providing more housing - not at the cost of the ratepayer but using the weight of our balance sheet.

“That will enable building at scale.”

Mike Tweed is an assistant news director and multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.