Project update
Why are we doing this?
Like many parts of the country, Rotorua is facing issues with housing availability and affordability.  Although not unique, our challenges are serious in terms of looking towards the future and the needs of our communities.  
Among the challenges is the increase in demand for social housing for older people.  Council currently owns 152 pensioner units located across five Rotorua sites.  Under the current model of delivery Council can not offer tenants the additional social services and advice they may need. Other organisations, for example social housing providers, can as they have access to government funds and expert service delivery.  The government has also enabled approved social housing providers to access new government funding and income related rent subsidies.  This means the providers can play a greater role in providing social housing to those that need it.  Councils do not have access to this funding.  Another challenge is the age and condition of many of the properties and what that means financially for the Council. 
During 2017 Council undertook a review of its pensioner housing to ensure tenants are receiving the best possible service to meet their needs.  The review identified issues with the Council’s current pensioner housing, including the likelihood that substantial ratepayer investment would be required to cater for increased demand over the next two decades and changing expectations for modern housing quality.  Reform of the social housing sector by government has resulted in local government not being eligible to access central government funding to improve or increase these facilities. 
Since then Council has been considering the options available to them around providing for services that best meet the social housing demands within our district.  Council considered selling the pensioner housing to a social housing provider to best ensure that: 
·         Provision could be made for a much more financially viable and sustainable service could be identified
·         Provide support services for vulnerable tenants;
·         Optimise central government funding; 
·         Attract investment to improve the current assets; 
·         Grow the social housing asset for the benefit of the Rotorua community.
In negotiating with social housing providers it became clear that the market value of the current stock could not be achieved.  This is due to the level of additional investment that has been signaled by the housing providers required  to raise the standards of the housing stock.
What is proposed?
Council have reconsidered their initial proposal to sell the pensioner housing stock and to look at other models.  Alternative models will need to increase the level of service to the tenants as per the objectives being sought and provide opportunities that will allow for growth of the housing stock in a pensioner housing capacity.  
The sale of the asset was planned to repay debt, reducing the Council total debt by $13 million.  The result of this means an increase in debt in year one of $13 million and will be carried through the Long-term Plan until such a time as another viable model is looked at.  Work is already underway on alternative models which may include the partial sale of the assets to a community housing provider or other partnership options. 
The sale of the asset was planned to repay debt, reducing the Council total debt by $13 million. The result of this means an increase in debt in year one of $13 million and will be carried through the Long-term Plan until such a time as another viable model is looked at. Work is already underway on alternative models which may include the partial sale of the assets to a community housing provider or other partnership options.



Back to Top