Kāinga Ora houses stand empty just down the road from an emergency hotel evicting tenants. A new investment fund could be the fix.
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Photo: Supplied / Kāinga Ora
A $90 million housing fund launched in the Bay of Plenty promises to be a gamechanger for tackling the severe housing shortage in the region, and has ambitions to eventually list on the stock market.
But it won't be soon enough to help emergency housing tenants at an Ōpōtiki motel who have been told to leave, including a young mother of three children.
Roy Thompson highlights the case as an example of what he's seen in his travels around the region promoting the new Bay of Plenty Housing Equity Fund. While in Ōpōtiki he says he came across six new Kainga Ora homes that had been sitting empty since mid-December.
"We just need more urgency," he says. "It's very frustrating to see these extreme housing needs and at the same time seeing houses being finished and left empty, or being vacated and left empty, simply because there's just not enough urgency."
Kainga Ora says six four-bedroom homes were ready mid-December and as of this week one family has moved in, while three others will move in soon. It says it is in the process of matching the last two homes to suitable families.
The fund will make a huge difference by increasing the supply of affordable homes to buy or rent-long term, elder housing, housing on whenua Māori, crisis accommodation, public housing and supported accommodation for people with disabilities, he says.
Five community organisations - BayTrust, Trust Horizon, Rotorua Trust, TECT and Tauranga City Council - are pitching in a total of $45 million. The fund will match that, with borrowed capital, to take it to $90 million.
It aims to work with iwi, community housing providers, councils and others to get homes built to scale.
"There's a lot of people doing good things out there in the affordable housing space, but a lot of organisations don't have sufficient capital to get their housing projects off the ground," says Thompson.
"This fund is all about addressing that problem by taking partnerships with community-based housing organisations to help them get things done, really."
Chief executive of Bay Trust Alastair Rhodes, who played a key role in setting it up, wants to see it grow to $500 million within five years by attracting more investors.
Managed by Thompson's New Ground Capital and Brightlight Impact Advisory, the fund is actively looking to form partnerships with wholesale investors, joint venture partners and lenders.
Rhodes says the government is not a partner in the fund but it could become an investor through ACC or the SuperFund. It also hopes to attract KiwiSaver funds.
"This is about making a difference in five, 10 years time," Rhodes tells The Detail. "It needs to be structured so that other investors can see what we've achieved and say 'yep, you're achieving a good rate of return, you're achieving a really good positive community impact we want to invest in this fund as well.'
"It would be great to see other regions follow suit so that we had a combined fund we could list on the NZX."
The fund aims to generate a return of CPI plus four percent (pre-tax, net of fees) to its investors via development margins, rental returns and capital growth in the properties.
Anne Tolley, Commission Chair for Tauranga City Council, which invested $10m in the fund, says it chose to be a partner as it provides an innovative and collaborative approach to delivering affordable housing for the region.
The fund's aim to invest in affordable housing projects, combined with a return on investment, mean the council's original investment can grow, allowing it to continue to reinvest while providing ongoing housing benefits for the community.
The Detail also talks to Ngāti Awa Social and Health Services chief executive Enid Ratahi-Pryor about the tenants facing homelessness in Ōpōtiki and why it is difficult to find them new accommodation. She will meet with Thompson and his team about the equity fund but she says she is wary about private investment in social housing.
This story has been updated to include a response from Kainga Ora.
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