Sale of the elder housing portfolio

Sale of elder housing villages update - November 2020 (107kb pdf)
Sale of elder housing villages update - August 2020 (105kb pdf)
Sale of elder housing villages update - July 2020 (124kb pdf)
Sale of elder housing villages update – March 2020 (23kb pdf)
Sale of elder housing villages update – December 2019 (87kb pdf)
Sale of elder housing villages update – June 2019 (79kb pdf)
Sale of elder housing villages update – April 2019 (158kb pdf)
Sale of elder housing villages update – November 2018 (158kb 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.