× Search
Menu

Sale of the elder housing portfolio

Council has sold seven of its elder housing villages to ‘Kāinga Ora – Homes and Communities’ while at the same time separating two of the villages from the portfolio and selling the land for private redevelopment.

Throughout this process, tenant wellbeing has been the number one priority. That includes protecting tenants’ tenure and rent affordability. All tenants will continue to have an affordable place to live.

What’s happening now?

Sale of seven villages to Kāinga Ora

Kāinga Ora – Homes and Communities has purchased seven of Tauranga City Council’s elder housing villages. Over time the sale to Kāinga Ora will deliver an increase in public housing for the city, alongside ongoing affordable housing for existing tenants.

The $17.2 million deal comes with a commitment by Kāinga Ora to invest a further $32.4 million on upgrading and redeveloping the villages for public housing within the next 25 years. The sale agreements take into consideration the age and condition of these older properties and the ongoing costs to maintain and provide warm, safe and dry public housing. The agreements include a six month transition process, a 25-year partnership between Council and Kāinga Ora, and ensure current tenants have an affordable place to live, now and in the future.

Whilst there are no current redevelopment plans for the villages Kāinga Ora will explore redevelopment opportunities over the next 2-3 years, to support the strong demand for public housing in Tauranga. If villages are redeveloped, existing tenants will need to move. However, they will be provided alternative affordable housing, located where possible in a community of their choice.

Sale of Pitau Road village and Hinau Street village

Alongside this work, Council has also been progressing the sale of Pitau Road village and Hinau Street village. This follows Council’s decision in June 2021 to separate these villages from the rest of the portfolio and sell them for private development. Work to date has included satisfying statutory obligations under the Public Works Act 1981 and ensuring compliance with Council’s recently adopted Property Acquisitions and Disposals policy.

These two sales have been classified as strategic disposals under Council’s policy. Council will seek to secure a market premium for both these villages and is also looking to achieve at least medium density on the Pitau Road village site and to maximise density on the Hinau Street village site.

Council are proceeding with a marketing campaign for the Hinau Street Village only at this time. Bayleys Tauranga will be running the market campaign for Hinau Street village on Council’s behalf between 6 May 2022 and 8 June 2022. The property will be will be advertised via local and national newspapers, real estate magazines and various digital platforms. Should you be an interested buyer, please contact Bayleys at info@bayleystauranga.co.nz.

Updates to tenants on the sale progress

The most recent updates to tenants are provided below:
Letter to tenants annoucing the sale to Kāinga Ora  - May 2022 (74kb pdf)
Frequently asked questions for tenants - May 2022 (131kb pdf)

 

In 2017, Council carried out a review of its elder housing portfolio, operations and future service delivery. The review comprised three elements – an independent report by the New Zealand Housing Foundation, tenant engagement through the establishment of a tenant advisory group, and wider stakeholder engagement through the establishment of a working group.

The initial findings were presented to the Community and Culture Committee meeting on 8 August 2017. The committee agreed that council should progress with its investigation into how best to provide elder housing services in Tauranga with a more in-depth investigation into two options:

  1. Council retains ownership of the elder housing portfolio and partners with a community housing provider
  2. Council divests the current elder housing portfolio to a community housing provider

New Zealand Housing Foundation report (1.2mb pdf)

The findings from the in-depth investigation were presented to the Community and Culture Committee meeting on 14 November 2017. The committee agreed to seek community feedback on whether council should divest its elder housing portfolio to one or more registered community housing providers, through the 2018-28 Long Term Plan.

Option analysis report (389kb pdf) Business case proposal (473kb pdf)

One of Council’s key priorities is to provide a higher standard of living for all residents and ensure that our city’s elder housing tenants are receiving the best possible service to meet their needs, now and in the future. Tenant welfare has been the primary consideration, with an agreed outcome that tenants are no worse off than before, with access to better well-being services and affordable housing.

A total of 2050 submissions were received on the elder housing topic during the Long Term Plan community consultation process. 

758 (37%) were in support of option 1 (retaining the status quo)
843 (41%) were in support of option 2 (to divest to an approved community housing provider)
449 (22%) selected neither option 

The mayor and councillors emphasised the welfare of elderly tenants was the number one consideration in the decision to divest. The welfare of current tenants will be protected through the use of covenants to ensure tenure, rent stability and retention of numbers of units. 

Any money raised from the sales of the nine villages – 246 units – will be set aside in a reserve for elder or social housing-related use.

Between 7 May and 7 June, we asked the community to tell us their thoughts on the future of Pitau Road village and Hinau Street village. We sought feedback on two options:

  1. Council’s preferred option: Pitau Road village and/or Hinau Street village are separated from the elder housing portfolio and sold for private redevelopment.
  2. Alternative option: Pitau Road village and/or Hinau Street village are sold as part of the elder housing portfolio.

We received 576 pieces of feedback with 79.5% supporting separating Pitau Road village and/or Hinau Street village from the elder housing portfolio and selling the land for private development.

The most common reasons provided in support of this option were that elder housing should not be delivered by council and that the location was not a suitable location for subsidised housing (either public or elderly). Following this feedback, we decided to separate these villages from the rest of the portfolio and sell them for market value and private redevelopment. The sale process is currently underway.

Simply, because someone else can do it better. Government policy doesn’t support councils to run this activity effectively, so we are climbing an uphill battle. Right now in Tauranga, council has 246 units across nine villages. But that is not enough to keep up with the rapidly growing demand for affordable elder housing. Over one third of the units are around 50 years old and none are less than 25 years old. That means many units have less than 10 years of useful life remaining before significant modernisation, and in many cases redevelopment, is required to bring them up to current housing standards. If we want to do the right thing to ensure our city’s elder housing tenants are receiving the best possible service to meet their needs, now and in the future, then selling to a public housing provider is our best option.

Public housing is provided in New Zealand by Kainga Ora (central government) and by registered community housing providers. Community housing providers are community based, not-for-profit organisations focused solely on providing public housing and affordable rental housing.

Unlike councils, public housing providers have access to central government funding allowing them to provide subsidised housing. That also puts them in a far better position to upgrade, replace and increase stock.

On top of that, where council can only act as a landlord, public housing providers can offer much more. They can provide tenants with access to wraparound services (budgeting advice, disability support, etc) and new tenants with access to income related rent subsidies (IRRS). 

Through the sale of the villages we want to achieve a number of important outcomes – like security of tenure and keeping rents affordable for existing tenants. In addition, we are considering how we can ensure additional units are built and that all units are to a higher standard. This might mean tenants are moved to new accommodation to enable the improvements to take place. At all times, tenants will have a place to call home.

We meet regularly with our tenant advisory group (a tenant rep from each village) who we share updates with and who guides us on how the remaining tenants are feeling. This group has been invaluable, and we are very grateful for their time. We have also have hired a tenant support officer. This person is dedicated to working with our tenants to ensure they have the support and information they need during the sale process.

All of our current tenants will continue to have an affordable place to live, now and in the future.

Timeline

  • Initial review of elder housing portfolio, operations and delivery

    Independent report by New Zealand Housing Foundation

    Tenant advisory group established

    Working group established

    2017
  • Community consulted through council's Long Term Plan

    Mayor and councillors decide to sell the elder housing villages to one or more community housing providers

    2018
  • Detailed work underway on the sale process

    2019 to 2020
  • Report to Council to seek approval of the sale process

    March 2021
  • Community consultation on Pitau Street village and Hinau Street village via the Long Term Plan

    May 2021
  • Council makes a final decision on the future of Pitau Street village and/or Hinau Street village

    July 2021
  • Sale of seven of the villages to Kāinga Ora.

  • Preparation of sale approach for Pitau Road village and Hinau Street village for private development

    July 2021 onwards
  • Marketing campaign for Hinau Street village commences

    May 2022

 

Speech icon

Talk with a staff member

Contact Fiona Nalder
07 577 7000

Speech icon

Talk with tenant support

Contact Jenni Hurn
07 557 6967
027 208 1719

Tauranga City Council, Private Bag 12022, Tauranga, 3143, New Zealand |Terms of use|Privacy statement|Site map

Back To Top