Nelson Tasman Housing Trust has welcomed the Government’s plan to remove barriers for community housing providers so they can operate on a level playing field when competing for funding with Kāinga Ora.
Trust director Carrie Mozena says the details are still to come and no-one knows exactly how it will work yet, but the announcement is significant, and she is confident the Government will make it happen.
Last week, the Minister of Housing, Chris Bishop, acknowledged that while community housing providers (CHPs) have been able to access Income-Related Rent Subsidies (IRRS) from the Government, they often struggled to access finance that fairly reflected the underlying risk for building social houses.
That is going to change and the minister has directed officials to make the IRRS revenue stream more attractive for investors and financiers, increase the use of leasing to provide social housing and pay the capital supplement to CHPs up front for new housing developments. The Government is also exploring a ‘credit enhancement intervention’ for CHPs so they can access suitable debt.
“I certainly welcome the Government considering these credit enhancement options, looking at some way of providing lower-interest loans or underwriting the debt for community housing providers. But again, we have to see what detail they come up with.
“What we do know is that the current Government is laser-focused on reducing costs and at the same time they recognise that more social housing needs to get built and they are prioritising that build by CHPs, so that’s helpful.”
Carrie says Chris Bishop and his associate housing minister Tama Potaka have previously met with Nelson Tasman Housing Trust (NTHT) and both want to see the trust grow and provide more houses.
She says CHPs currently have to seek loans from banks at commercial rates and paying off the interest on those loans is a significant cost in building social and affordable housing. Whereas, Kāinga Ora has been able to access lower-interest loans as a Crown entity.
Earlier this year the Government stopped Kāinga Ora plans to build more houses while operations were reviewed and it was told it could only complete houses under construction or under contract.
Meanwhile, NTHT has two more housing developments that Carrie says should be completed by the end of 2025. Eight two-bedroom homes in Kawai St are under construction and in Dobson Valley at Atawhai the trust has a resource consent to build 10 homes that will be a mix of two, three and four bedrooms. Both those projects are affordable rental homes which means major funding came from the Government’s affordable housing fund. They will house working families on low to modest incomes and she says those families will pay 80 per cent of market rent.
“It’s very, very sad that home ownership is out of reach for more and more people. But what we’ve found over the years … is that often those folks, over time, can save up a deposit to buy their own home. Being able to offer them below-market rent enables them to make those savings.”
In Richmond, the trust is still working on a resource consent to build 14 one and two-bedroom units on a site and Carrie says the process is “excruciatingly long”.
The proposed Richmond development will be social housing for people on the housing register and needing a high level of Government subsidy. All going well, she hopes that development will be completed in 2026-27.
