Government moves to provide security and stability for Auckland council tenants

Prime Minister Helen Clark and Housing Minister Mark Gosche announced today that the government had approved an offer by Housing New Zealand Corporation to buy the Auckland City Council housing portfolio for a maximum of $83 million.

In addition, HNZC will also spend up to $75 million over the next five years to upgrade or replace the existing Auckland City Council properties.

The offer involves HNZC buying nearly 1700 housing units, comprising 1542 pensioner rental units on 50 sites, and 129 residential units.

The Auckland City Council is due to meet on 10 October to consider the government’s offer.

“This offer, if accepted by the Auckland City Council, provides much needed security of tenure for Auckland City Council tenants,” Helen Clark and Mark Gosche said.

“The government stands for fairness and security. It is strongly committed to investing in the basic social needs of New Zealanders, and affordable housing is clearly such a need.

“The government also believes that local authorities have a significant role to play in the provision of housing in their communities. That is why we moved this year to make council housing a council strategic asset under the Local Government Bill.

“This change made it clear that, in future, councils that want to sell their housing will first need to consult with their community.

“The transfer of Auckland City Council’s housing portfolio to HNZC is due to take place on 1 March 2003. From that date, qualifying tenants will also pay income-related rents.

“Housing demand in the Auckland region is high and rising. If the council had sold the housing into the private market, it would likely result in the loss of these valuable social housing sites in and around inner Auckland.

“Many of these properties need upgrading or replacing. That will gradually take place during the next five years. To build 1700 properties in Auckland would have taken us years, and cost about $250 million at current values.”

Mark Gosche said that as needs and future trends were established redevelopment work would occur and affected tenants would need to be temporarily relocated to other vacant units.

He cautioned that a programme of further purchases from other councils was not viable or desirable and that local government continued to have an important role in providing accommodation for pensioners and others on low incomes.

“This is a special case. There is a high demand for social housing and a low turnover amongst existing stock. The region also has high levels of population growth,” Mark Gosche said.

Under the terms of the offer, the Auckland City Council properties would transfer to HNZC no later that 1 March 2003.

Following a council decision a due diligence process will begin. It is expected that will be completed by 30 November. The council will manage the properties in consultation with HNZC before the final transfer on1 March 2003.