Tenants of the Tūranga Tangata Rite affordable housing development will face a higher rent for the next five years if a remittance for its council development contributions is not granted, according to Toitū Tairāwhiti Housing.
Toitū Tairāwhiti Housing has warned Gisborne District Council that tenants in its affordable housing development will have to pay more rent if it doesn’t get a remittance of about $1.5 million in fees.
Willie Te Aho, representing the iwi housing provider, appeared before councillors on Thursday to seek a remittance of the 150-home Tūranga Tangata Rite site’s development contributions or a grant to cover the cost.
The council requires contributions from developers to fund infrastructure associated with their developments, aiming to reduce the pressure on rates.
A code compliance certificate is needed before tenants can move in, which requires the development contributions to be paid.
Te Aho said the organisation had not expected to pay the contributions because it was a not-for-profit housing provider and was contributing $3m worth of roading to the council’s infrastructure through the development.
“If we have to pay another $1.5m on top of the $3m in roading that we are gifting to the Gisborne District Council, then we will. But this will be oncharged to tenants,” he said.
The 150-house development on Ormond Rd had a stage one opening last week at which it was announced tenants would pay 80% of the average market rental.
“Current market rent for a 3-bedroom [house] in Lytton West is $800. We are charging $640.”
Te Aho said if Toitū Tairāwhiti Housing had to pay the development contributions, the cost would be charged to tenants over five years, increasing the average rent in the development to about $686 a week.
“Suddenly the affordable rental has been lifted up to near where it would’ve been if they were paying market rental.”
Te Aho said Toitū Tairāwhiti Housing had been working to reach an agreement with the council over the contributions, but was told this month their “view isn’t accepted”.
The council calculates development contributions before consent is issued.
According to the council’s website, development contributions were about $12,500 for a new dwelling in the city and about $1900 for a non-serviced rural area. A minor dwelling under 60sq m was about $6200.
Toitū Tairāwhiti Housing estimated contributions for their dwellings to be about $10,000 to $11,000.
Te Aho said 35 families were scheduled to move into the homes next month. Of those homes, 15 had their development contributions paid already.
“We have sought a reimbursement for those 15 and remission of the balance for the 135 houses or a grant equivalent to the 150 development contribution payments.”
Mayor Rehette Stolz, in the meeting, asked Te Aho whether the issue had been discussed with Housing Minister Chris Bishop, who attended the stage one opening.
Te Aho said the development contributions were “not on their list of priorities”.
Associate Housing Minister Tama Potaka declined to comment on the development contributions, as “the kaupapa falls under Minister Bishop’s delegations”.
At the opening, Potaka had said: “If the affordable rate is about $600 to $700 a week, that’s actually quite expensive.”
In a statement, Bishop said all costs related to the build, including development contribution fees, should be built into providers’ proposed costs.
“Providers are expected to fund any cost escalations above and beyond what the Crown has agreed to fund.
“My expectation is that additional costs are not passed on to tenants in line with contractual settings.”
“I have asked [the Ministry for Cities, Environment, Regions and Transport] to contact TTHL directly to discuss their concerns.”
Toitū Tairāwhiti Housing had until tomorrow to object to the development contributions.
Te Aho said: “The principle that we’re advocating is that not-for-profit organisations doing affordable housing should have the development costs remitted or a grant returned to those organisations.”
