Council houses in Miramar, which have been slated for demolition and redevelopment for years.
Wellington councillors are nervous about establishing an independent body to manage council housing.
Their Wednesday morning meeting went deep into overtime to consider a paper outlining the rules the community housing provider will have to follow.
The key issues up for debate were how much the council could control the independent housing charity, how existing tenants would be supported, and how many council-appointed trustees could sit on the board.
Councillors made some amendments to the paper, clawing back some control of the independent body after their officers recommended an approach that felt too “hands-off” for some, said councillor Fleur Fitzsimons.
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“No one is super enthusiastic, we’re doing this because we have to do this to be financially responsible,” Fitzsimons said as she introduced amendments the councillors had discussed.
Amendments passed by the council included guaranteeing rent limits for existing council tenants would continue, that a Tenants Advisory Group would permanently report to the council about the new body and that the operations should be focused on areas of unmet need in Wellington.
Financial woes have forced the council into a position where it has to give control of the houses to a community housing provider (CHP) to make its tenants eligible for Government rent support. The alternative would be the death of the council’s housing arm.
On Wednesday Deputy Mayor Sarah Free said this was because of the “deeply inequitable” law which allows tenants of CHPs and Kāinga Ora to access government rent support, but blocks council tenants from the same funds.
The tenants, many of them in vulnerable positions, need rental subsidies that are unsustainable for the council to provide on its own – at the moment social housing is costing the council $30,000 each day. If it provided all of its tenants with the same level of subsidies as the government provides, it would cost $8.9 million per year.
By establishing the CHP to manage social housing, new tenants will be eligible for the Government’s income-related rent subsidy, which limits their rents to 25% of their income.
Wellington council tenants – and many councillors – have been campaigning to get the subsidy for years with the IRRS 4 All campaign, but earlier this year it became clear that the Government would not provide the subsidy to tenants renting directly from the council.
There was considerable nervousness for the councillors as they considered establishing the CHP, particularly around who would sit on the board governing the operations of community housing.
In the seventh hour of the meeting, Chief Executive Barbara McKerrow stepped in to remind the council they had already decided to make an independent CHP. “It has to be independent … Council influence over future rental setting policies is simply not possible,” she told the councillors.
Councillor Jill Day, chairing the meeting, described the vote as “a little bit of a leap of faith”.
Councillors were cautioned by officers that they were trying to control the CHP’s operational activities too much through their various amendments. A CHP cannot be council-controlled – i.e. the council cannot appoint a majority of board members.
The CHP will be established as a charitable trust. Its purpose includes providing community and affordable housing in areas of unmet the Wellington city, for the benefit of the wider community and with a particular focus on providing for low-income people. It will lease the council’s housing portfolio for five years at a time.
The council voted to have four council-appointed board members, with at least two elected members, meaning there will have to be five others. Officers cautioned that this might be too prescriptive, because the CHP will always need nine members on its board of trustees to meet the requirement.
The council will invest $35m of property and funding in the CHP, to enable it to make its own investments. Part of the CHP’s purpose is to develop and acquire new community housing in Wellington as well as managing the existing portfolio.
Officers said the new CHP should be up and running by the middle of next year.