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Housing our peopleTe tāwharau tangata

 


Napier City Council (NCC) Community Housing is accepting applications.
Please complete all forms in full before submitting.
Napier City Council do not provide Emergency Accommodation.
If your housing need is urgent, please contact Ministry of Social Development (MSD) – 0800 559 009

Housing Eligibility

Applicants must be a New Zealand citizen or resident and must have resided in Napier City for three years, unless there are extenuating circumstances which may include:

  • being an ex-resident of Napier City
  • having family locally
  • needing to move from a rural area of Hawke’s Bay due to poor health.

Eligibility Thresholds

To be eligible for NCC housing, you must meet certain asset and income criteria.

Income and Asset Threshold 2022

 To put forward an application, please download an information pack here.

 

More information

If you'd like to know more about our homes, please call our Customer Service Centre on +64 6 835 7579.

NCC Council Housing

 

Future of Council Housing Consultation Information

Napier City Council started providing community housing over 50 years ago when, like many other councils, we received low cost government loans to build housing units. Of the 377 units we now have, 80% are for retirees or people with a disability. Our housing units are now up to 60 years old and costing more and more to maintain. Significant work is required in the near future to address deferred maintenance issues.

We have assessed every part of every unit and have anticipated the repair, maintenance and replacement for the next 25 years. The money we receive in rent does not cover the costs of the housing anymore and over the next 25 years we have projected an average annualised shortfall of $2.2million. This year, we will borrow to cover any shortfall, but we can’t keep borrowing to cover shortfalls year on year.

We have reviewed our Council housing provision options and consulted with the public on their preference between the three options below:

  • Keep all 377 units in 100% Council ownership.
  • Keep the ‘retirement villages’, sell the ‘social villages’ to another community housing provider and use the sale proceeds to build some new units.
  • Sell all of the units to an organisation in the social housing sector.

There were a number of considerations made in the decision-making process including the community feedback received, Napier’s housing situation, the government reforms underway, and the effect this decision would have on current tenants.

The decision was made to keep all of our housing and to fund the forecasted annual shortfalls through a combination of increased rents and increased rates. The decision was made that 80% of the costs would be funded through rents (tenants) and 20% of the costs would be funded through rates (ratepayers).

 

Read the full summary here

This option sees Council continuing to own all 377 housing units operate the housing service. Changes in the Residential Tenancy Act have meant the complexity of providing tenancy management services has increased. Should Council retain the service, additional staff resourcing is required.

This option generates an average annual deficit of $2.2 million which would reach $70 million after 25 years (2046). To cover this shortfall, an increase to rates or and increase to rent, or a combination of a rates and rent increase is required. The impacts to rates and rents are shown on the bar below. We have provided two examples of a rates/rent split – if Council selects the split option, the actual split would be based on the benefit and impacts to each party.

The current rent setting formula will have to be changed from 30% of tenant’s income to a percentage of market rent. Because this could be a significant increase for some tenants, the increase could be phased in over a number of years. Until the full increase is applied, the shortfall could be funded through loans, as outlined in Council’s Long Term Plan 2021-31

Pros

  • Key benefits of this option include the relative ease of implementation, retention of housing and land in Council ownership and a higher level of certainty for tenants.
  • It allows Council to retain full control of the asset and tenancy policies.
  • Moving to a subsidised market rent policy will provide predictable income and reduce the administrative requirements that income related rent settings cause.
  • In the case of tenants funding the full costs, financial impact to the ratepayer could be low in the medium term.
  • Retaining the housing portfolio places Council in a position to take advantage of potential opportunities any Local Government reform may provide.

Cons

  • This option does not provide for any additional housing to be built to meet growing demand, or any upgrades to existing housing to meet modern living standards or accessibility.
  • It does not address the issue of the deteriorating condition of the units, and while replacing componentry will extend the life and buys some time, ultimately decisions on full replacement may still be needed in the future. The need to pay for replacements might arise earlier than forecast and this will be challenging given the lack of current cash reserves and the time needed to build these up.
  • While rent increases may potentially be unpopular with current tenants, and in some cases unaffordable, the opportunity for the housing to remain with Council may outweigh these concerns.
  • In the case of ratepayer contribution increasing, the financial impact on ratepayers could be significant on an ongoing basis.

This option retains 300 retirement units in 8 villages. It proposes to transfer (sell) the three social villages to another entity within the social housing sector. The sale proceeds would be put towards the cost of developing 49 new units. The new development would take place on existing sites.

The four units at the Hastings/Munroe village would be demolished and 11 new units would be built. Current tenants would be rehoused. The 11 new units would be rented at full market rent. The second site, Greenmeadows East  would see the development of 38 new units.

This option loses 76 houses and builds 49 new units.

This option generates an average annual deficit of $2.3 million and without any rates or increased rent adjustments the shortfall would reach $65.9 million after 25 years (2046). To cover this shortfall, an increase to rates or and increase to rent, or a combination of a rates and rent increase is required. The impacts to rates and rents are shown on the bar below. We have provided two examples of a rates/rent split – if Council selects the split option, the actual split would be based on the benefit and impacts to each party.

The current rent setting formula will have to be changed from 30% of tenant’s income to a percentage of market rent. Because this could be a significant increase for some tenants, the increase could be phased in over a number of years. Until the full increase is applied, the shortfall could be funded through loans, as outlined in Council’s Long Term Plan 2021-31

Pros

  • Key benefits of this option include the refocus to providing housing to retirees or those with a disability only, it retains the majority of housing and land in Council ownership with a higher level of certainty for retirement tenants. It adds new, fit for purpose housing to the portfolio. It allows Council to retain full control of the asset and tenancy policies. Moving to a subsidised market rent policy provides predictable income and reduces the administration that income related rent settings cause. In the case of tenants funding the full costs, financial impact to the ratepayer could be low in the medium term.
  • The development at Hastings/Munroe creates a higher level income source in the longer term. The development of the two sites offer potential partnership (and possibly co-funding opportunities) with PSGEs, Iwi and/or Kāinga Ora.
  • Retaining the housing portfolio places Council in a position to take advantage of opportunities any Local Government reform may provide.
  • The sale of the three villages would impact the current tenants in these villages, and depending on the buyer could either have a positive or a negative impact. The preference to retain the housing for community housing would likely result in a positive impact.

Cons

  • This option does not create any additional housing to meet growing demand, or any upgrades to existing housing to meet modern living standards or accessibility. It does not address the issue of the deteriorating condition of the units, and while replacing componentry will extend the life and buys some time, ultimately decisions on full replacement may still be needed in the future. The need to pay for replacements might arise earlier than forecast and this will be challenging given the lack of current cash reserves and the time needed to build these up.  While rent increases may potentially be unpopular with current tenants, and in some cases unaffordable, the opportunity for the housing to remain with Council may outweigh these concerns.
  • In the case of ratepayer contribution increasing, the financial impact on ratepayers could be significant on an ongoing basis.
  • Council currently does not have the resources in-house to manage the new developments and the cost of outsourcing this is relatively unknown. The ability to secure consultants and contractors is currently challenging. Availability of building materials may also create project delays and increase costs.
  • A key challenge with this option is the added complexity and uncertainty regarding both the sale of the three villages and the development aspect. Complexity and uncertainty increase the risk.

This option would see all 377 units transferred (sold) to another entity within the social housing sector.

Council wants the housing to remain as affordable rental housing. The protection of tenants and the special character of the retirement villages is important and therefore any transfer contract would need to contain the following conditions:

  • Ensure existing tenancies, under the current (or better) terms and conditions, remain in place,
  • The portfolio can only ever (in perpetuity) be used to provide housing to retirement or community tenants, and
  • The Council retains the right of first refusal (on the same sale conditions) if the buyer was to sell the portfolio.

Because of this, a sale through the open market is not being considered.

The opportunities for redevelopment of the two villages we have identified and the potential to demolish and intensify other sites allow for additionality (adding more housing) which could allow Community Housing Providers to access government funding and is a key focus for Kāinga Ora. There may be an option to vest (give) the housing to a new regional or local housing trust should one be formed by council(s). Such a trust could become a Community Housing Provider and would operate entirely independently of council(s). This option would not result in any sale proceeds.

No particular ‘buyer’ has been identified as this would be subject to a sale process.

Pros

This option allows the housing to remain as affordable housing and in ‘community ownership’, noting that the majority of CHPs are charitable trusts.

Advantages of this option are mainly financial for both tenants and Council (ratepayers). CHPs provide wrap around support services in addition to tenancy management and are able to apply the IRRS discount rent rate (rent set at 25% of income) to new eligible tenants. Under a transfer to Kāinga Ora, all eligible tenants (existing and new) would be able to access the subsidised rent. Should the conditions be put in place, there would be no negative impact on current tenants. A full transfer would remove all liabilities (costs and deficits). Sale proceeds received (noting that transfer to a council formed regional or local housing trust would not provide any sale proceeds) would be available for any of the following, in consultation with the community:

  • Repay debt
  • Invest to generate income
  • Pay for current / future loan funded projects
  • Implement new or deferred projects

All of the above have a positive impact for the ratepayer.

Cons

  • While any sale agreement would provide protections for current tenants, a change of ownership could create anxieties for tenants.
  • The transfer of ownership option, once entered into, is irreversible (apart from a future buy-back), and would see the loss of Council ownership of the housing and the land.  Removing this activity from Council may compromise our position should opportunities arise through Local Government reforms or any future government change of policy (that might provide support for Council housing).
  • The market value of the portfolio sits at $65 million. However, the transfer options that best align with Council’s criteria (selling to a CHP) and with the conditions outlined above would attract a lower price than a market value. In the case of transferring to a council formed trust, there would be no sale proceeds.
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