Wellington City Council has unanimously agreed to allow its draft social housing policy and rent-setting changes to go to consultation.
Photo: RNZ / Richard Tindiller
In the Strategy and Policy Committee today, councillors discussed the expected effects of the changes and the sustainability of the city housing programme.
The council's social housing service, City Housing, manages 2000 tenancies with approximately 3500 tenants. Many of those tenants are financially vulnerable.
The draft policy proposes to set rent based on a tenant's circumstances, rather than a blanket rate of 30 percent off market rent. In some cases, there are added discounts to this rate.
Income for the service comes from City Housing rent.
"There are equity issues with this policy, which is largely seen as a blunt instrument to address affordability. Additionally, the rental return does not generate sufficient income to operate the service or to generate reserves to improve the condition of the portfolio," the council said.
If the draft policy is adopted, 52 percent of tenants - those in the lowest income bracket - will benefit from a drop in rent, but the remaining tenants on marginally higher incomes will have to pick up the tab.
The council said the proposed changes would generate an estimated $1.5 million per year in additional rental income based on 2019/20 rental figures and that money would go back into the housing programme.
It said the extra funds would not, however, resolve issues over long-term financial sustainability of City Housing.
Despite a unanimous vote to push the draft plan to consultation, many councillors voiced their frustrations that tenants who were financially vulnerable would have to subsidise the remaining tenants.
Council tenants are not currently eligible for the Income Related Rent Subsidy that Kāinga Ora and other community housing providers tenants receive, which make rents more affordable and the housing sustainable.
Fleur Fitzsimons. Photo: Supplied
Councillor Fleur Fitzsimons, who held the housing portfolio, said that should be rectified, adding that many councillors were "frustrated".
Fitzsimons said for years the council had been pushing on this issue, and it would continue to do so.
She added that the consultation period would be a genuine one, and urged the community to respond to the proposal.
"We genuinely want to hear from our tenants and from those NGOs that support our tenants to determine whether we have quite got it right. I am certainly very open-minded to particular things that come through and changes that may be made," she said.