housing for older persons options paper...kirikiriroa will see 70 homes built on a vacant block in...

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D-1419003

Housing for Older Persons

Options Paper

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Introduction

The government has made significant changes to the way social housing is delivered across New Zealand following recommendations in 2010 by the Housing Shareholders Advisory Group. These changes have provided the Council with an opportunity to review ownership and deliver of the Council’s Housing for Older Persons. The Council’s Housing for the Older Persons housing portfolio consists of 344 social housing units located in 17 communal type complexes spread across Hamilton and is managed in line with the Residential Tenancies Act 1986. The Council received a Discussion Paper in March 2014. This was also provided to social housing providers and used as the basis for discussion with this sector about how Hamilton might provide this service to our community and the future of Council owned social housing units. This Options Paper follows on from the Discussion Paper and responds to the Council’s request to identify a range of alternative service delivery options, including sale, for the Council’s Housing for Older Persons activity. It will assist the Council to decide:

1. Should the Council continue to deliver housing for older persons? 2. If the Council continues to deliver this service, are there changes to that service? 3. If the Council does not continue to delivery social housing for older persons, what are the options

for discontinuing this service?

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Background

The Council is reviewing ownership and delivery of the service for its social housing units for older

persons and released the Housing for Older Persons Discussion Paper in March 2014. The Discussion

Paper provides information about the changes made to the way social housing is delivered in New

Zealand and information about the Council’s current service. A copy of this Discussion Paper is on the

Council website:

http://www.hamilton.govt.nz/AgendasAndMinutes/Extraordinary%20Council%20Agenda%20-

%20Open%20-%204%20March%202014%20(Part%201).pdf (pages 88-105)

The Discussion Paper provided the basis for engagement with social housing providers about how

Hamilton might provide this service to our community and the future of the Council owned housing for

older persons units. Councillors met with social housing providers on 20 March 2014. They supported

the review and expressed interest in receiving this Options Paper.

On 27 March 2014 the Council considered the Housing for the Older Person Discussion Paper and

resolved to do the following:

1. In relation to the 2014/15 Draft Annual Plan:

The Council will evaluate alternative options for the continued delivery of Housing for Older Persons

for one or two of the Council owned properties and this may result in a sale of these properties to a

sympathetic provider of social housing.

2. Establish a working group (the Social Housing Working Group) comprising The Mayor and Councillors

Gallagher, King, Pascoe, Tooman and Yeung, to:

a. Develop a Social Housing Options Paper, which will identify a range of alternative service delivery

options for the Council’s Housing for Older Persons activity, with those options to include sale

b. Identify a process for the development of a social housing plan for Hamilton

c. Consider the outcomes of the 2014/15 Draft Annual Plan proposal (above) and to report back to

Council no later than 31 July 2014.

d. Report back to the Council by 31 July 2014 with a statement of proposal that includes the options

in the Social Housing Options Paper, and a process for consultation on that statement of proposal

ahead of the 2015-25 Long Term Plan.

This Options Paper describes the issues identified in the Discussion Paper and presents options to respond to those issues. The Social Housing Working Group has prepared this Options Paper to:

Test various options relating to ownership and service provision

Provide the basis for discussion with social housing providers

Help the Council in decision making

On 14 July 2014 the Working Group met with social housing providers and as a result of their feedback further options have been added.

http://www.hamilton.govt.nz/AgendasAndMinutes/Extraordinary%20Council%20Agenda%20-%20Open%20-%204%20March%202014%20(Part%201).pdf

http://www.hamilton.govt.nz/AgendasAndMinutes/Extraordinary%20Council%20Agenda%20-%20Open%20-%204%20March%202014%20(Part%201).pdf

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The following terms used in this Options Paper apply:

Social Housing is the term used for housing provided for people on low incomes and/or special needs by government agencies or non-profit organisations. The Council does not currently provide this form of social housing.

Housing for Older Persons is age specific and refers to social housing provided to persons 60 years and over on a low income with minimal assets. The Council provides this form of social housing only.

IRRS means income related rent subsidy, which is available to Housing New Zealand and approved housing providers and is the subsidy paid by the government representing the difference between the market rent and the rent payable by the social housing tenant. Local authorities are not eligible for this rent subsidy.

SHU means the Social Housing Unit which was set up by the government to provide capital grants to approved social housing providers. Local authorities are not eligible for this funding.

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Issues Impacting on the Council’s Housing for Older Persons Service

The Housing for the Older Persons portfolio consists of 344 units located in 17 communal type complexes spread across the city and is managed in line with the Residential Tenancies Act 1986. A table outlining housing locations, values, year built and condition of the Council’s housing portfolio is in Attachment 1: Housing for the Older Person Asset Summary. The Discussion Paper identified a number of issues facing the Council if it continues to provide housing for older persons. Since the Discussion Paper and the meetings with social housing providers in March and July, the Council has carried out more detailed work and set out in the following pages is a summary of the issues impacting on the Council’s housing for older persons activity and ownership. 1. Government Reforms

The government has made significant changes to the way social housing is delivered across New Zealand following the 2010 recommendations by the Housing Shareholders Advisory Group. The Social Housing Reform Act became law in late 2013.1 Local authorities have been specifically excluded from these social housing reforms as the government seeks to develop social housing ownership and service delivery by the third sector. The consequences of this are the Council can no longer access government capital funding and cannot access the income related rent subsidies. The two key changes included in the Act are:

The Ministry of Social Development replaces Housing New Zealand in assessing housing needs and

eligibility.

Approved community housing providers, such as the Salvation Army, will be eligible to receive a

government subsidy which means they will be able to provide income-related rents to high needs

tenants and their families. Subsidised rents have previously only been available to Housing New

Zealand tenants.

The Ministry of Social Development manages applications for social housing and refers people on the

waitlist to social housing providers, including Housing New Zealand, third sector providers and local

authorities. The Ministry is responsible for assessing need and eligibility for social housing, managing the

waitlist for social housing, referring people to housing providers for placement in house (which includes

Housing New Zealand as a housing provider), calculating and administering income-related rents and

paying the income-related rent subsidy to housing providers.

Social housing providers will be responsible for placing people in properties, managing tenancies and will be the landlord for social housing tenants.

1 For detail about social housing terms and an explanation of the roles and responsibilities of the Ministry of Social Development, Housing New Zealand and Community Housing Providers see Attachment 6: Social Housing Glossary of Terms and Roles and Responsibilities.

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Housing New Zealand remains the owner of the government’s housing portfolio managing the asset for the government and is the landlord.

Income-related rent is a subsidised rent payable by a tenant based on a percentage of a tenant’s income and is less than the market rent of the property. The income-related rent subsidy paid to the approved housing provider by the government is the difference between the income-related rent and the market rent.

The government has established the Social Housing Unit (SHU) with the primary role of working with social

housing providers to provide affordable, quality, appropriate and stable housing for New Zealanders. The

SHU administers a capital grant fund which is available only to qualified social housing providers for

building projects. Local government can not apply to be an approved social housing provider and is

therefore not able to access this capital fund.

2. Wrap-around Services

The Council does not provide any services other than landlord tenancy management services. Many third sector providers deliver a ‘wrap-around’ service for tenants such as home help, meals and social services. An example of this is the joint partnership between Habitat for Humanity and Cross Light Trust that purchased the Council's Johnson Street units. Together these organisations have upgraded the units and now provide a higher standard of accommodation and social services to support the tenants.

The Council’s Housing for the Older Person Policy stipulates that tenants must be able to live independently. When people are at a stage where intensive help is no longer sufficient to support independent living, residential care or living with family is the only option. 3. Role of the Third Sector

Non government social housing providers have advantages over the Council when it comes to providing social housing services. Charitable trusts, iwi and not-for-profit organisations have provided social housing for a number of years offering small-scale through to large-scale professionally managed units made available to a broad range of people from the elderly, those with disabilities and mental illness through to shared equity arrangements. Third sector providers are more able to provide a holistic ‘wrap-around’ service to better support tenants.

Community housing providers hold an advantage over the Council because approved providers are eligible to access capital grants and government rent related subsidies. Through partnering with the government these community housing providers are able to develop more modern, purpose built units.2 As a recent example, a social housing project deal between Housing New Zealand, Tainui and the Te Rūnanga Ō Kirikiriroa will see 70 homes built on a vacant block in Enderley.3 Te Rūnanga Ō Kirikiriroa is a government approved provider and has accessed SHU grants for this project.

There are a variety of ownership and delivery models around the world and the situation in New Zealand contrasts with many European countries, where there are numerous examples of well funded alternatives to public-sector landlords.

2 One example is Accessible Properties, who received SHU funding, are currently building 10 units in Hamilton

3 http://www.stuff.co.nz/waikato-times/news/9844572/Project-to-breathe-new-life-into-Enderley

http://www.stuff.co.nz/waikato-times/news/9844572/Project-to-breathe-new-life-into-Enderley

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The Housing Shareholders Advisory Group noted that the United Kingdom and The Netherlands both have developed major modern housing providers through several centuries of philanthropic housing association. Countries such as Canada and Australia have also developed a strong not-for-profit housing association sector. Australia set a target of 35% of social housing to be managed by non government providers by 2013 and has provided stimulus for not-for-profit housing associations similar to that now underway in New Zealand.4 4. Maintaining or Increasing Social Housing Available in Hamilton The Council has a desire to ensure there is sufficient social housing available in the city to meet demand, including for the elderly. Demand fluctuates but since April 2014 when the Ministry for Social Development took over management of the assessment for housing, the waiting list in Hamilton has increased. The Council’s housing for older persons is not regarded by the third sector as fully contributing to meeting the demand for social housing in Hamilton because it is restricted to older persons instead of all categories of vulnerable people and the threshold for Council housing eligibility is lower than the Ministry of Social Development’s criteria. The largest provider of social housing in Hamilton by far is Housing New Zealand with approximately 3,000 houses/units. Housing New Zealand is currently reconfiguring its current stock to ensure it will meet the future demands and is fit for purpose. It is selling and investing in new builds and refurbishments which will increase the number available. Housing New Zealand is spending $1billion across New Zealand on new builds. The government’s social housing reforms enable the non government sector to provide social housing and receive assistance that was previously only available to the government. Currently there is another 160 – 200 social housing units owned by the third sector. Accessible Properties is building another 7 homes and Te Rūnanga Ō Kirikiriroa has started building 70 homes on a vacant block in Enderley on a mixed model basis. See Attachment 8 – Hamilton’s Aging Population 5. Expanding Housing for Older Persons to Others

Third sector providers have identified there would be more benefit to overall social housing availability in Hamilton if the Council’s properties were made available to all who are in need of social housing. There are significant complexities for the Council to deliver social housing, rather than housing for older persons including:

An expanded service would require specialised skills and expertise that the Council currently does not have

The Council service would need to provide (in-house or contracted) wrap around services to support tenants with complex social needs

The social housing criteria and assessment processes would need to align to those applied by the Ministry of Social Development. This is likely to impact on the current tenants in Council’s housing for

4 The Australian Government reports targets have been exceed -Social Housing Initiative Fact Sheet,

http://www.dss.gov.au/our-responsibilities/housing-support/programs-services/social-housing-initiative/social-housing-initiative-fact-sheet

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older persons because the threshold for eligibility is higher under the Ministry of Social Development criteria.

Based on Housing New Zealand experience, there is likely to be a higher risk of property damage and increased social issues from the different mix of tenants.

If the Council did make it’s housing for older persons available for all in need of social housing, the Council would still not be eligible for any government rent subsidies or capital grants because it is specifically excluded from applying to be an approved provided under the new legislation. 6. Aging Stock and Design of Stock

With the exception of Sullivan Crescent, the Council owned complexes are dated in terms of design, with the majority of the portfolio built between 1970 and 1980. A significant amount of maintenance and capital investment is required on an ongoing basis. Housing New Zealand describes the principles that are imperative for today’s social housing in its publication Design Guide Housing at Higher Densities.5 The principles include both interior design and complex layout. The Council’s current stock does not meet Housing New Zealand principles for social housing design. The Council’s portfolio was reviewed in accordance with a number of Property Quality Standards for providing a healthy, safe, accessible and warm environment. This assessment was made in the context of the properties as housing for older persons. Items such as forced ventilation, insulation, security and car-parking would improve the general standard of the properties. Level access showers, mobility scooter parks and charging areas, wheelchair access with wider doorways and ramps, are required to provide a better level of service to elderly tenants.

Aspects of the exterior design of some complexes make some upgrades challenging, and are not cost effective, for example:

The Clarkin Road complex of 27 units has raked ceilings and is unable to have ceiling insulation installed until the roof is lifted or replaced;

Other complexes are positioned on undulating sites that present problems for those who are mobility challenged, and security lighting is generally poorly designed across the portfolio;

Car parking and mobility scooter parks will be difficult to add in sites which have little room to spare or where layout prevents access.

Attachment 3: Housing for the Older Person Summary of Housing Stock contains photographs, maps and notes on each complex. It is important to note that if the properties are used for general use social housing, the buildings do not require significant improvements. While the stock is dated and older, it has been well maintained and would provide reasonable quality for social housing. Ongoing maintenance and renewals are programmed to ensure the stock continues to be kept in good condition. Although unlikely to reach current building standards, the units provide good living conditions for most people in need of social housing. If the Council is to continue to provide housing for older persons then additional funding will be required for improvements such as level access showers, mobility scooters parks, ramps and wheelchair access.

5 Housing NZ Design Guidelines http://www.hnzc.co.nz/our-publications/design-guidelines/design-guide-housing-at-higher-densities/design-guide-housing-at-higher-densities.pdf

http://www.hnzc.co.nz/our-publications/design-guidelines/design-guide-housing-at-higher-densities/design-guide-housing-at-higher-densities.pdf

http://www.hnzc.co.nz/our-publications/design-guidelines/design-guide-housing-at-higher-densities/design-guide-housing-at-higher-densities.pdf

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7. Location

The Council’s housing portfolio is located mostly in older established areas of Hamilton and there are no properties located in the north east of the city or newer growth areas. The Council is not holding vacant land and has no plans to either purchase or build new social housing units in these growth areas. To grow stock, the Council would need to fund this itself as it is not eligible for the government’s SHU subsidy. Attachment 2: Housing Location Map. 8. Financial Considerations

There are significant financial challenges facing the Council if it is to retain its social housing for older persons service. There are three financial components to the activity; operating costs, renewal expenditure and capital expenditure. 8.1 Operating Costs The Council sets rental income for its social housing based on an assessment of rental prices of other similar properties in New Zealand and specifically within local government. Rent is reviewed each year.6 After all direct expenditure (costs directly associated with operating the housing stock7), indirect expenditure8 and depreciation, the social housing for older persons activity makes an accounting loss for the 10-year period 2015/16 to 2024/25 of $1.297million. On a cash basis for the same 10 year period, this activity makes a cash surplus of $693,000; this is after depreciation is added back and renewal expenditure is included. The key difference between the accounting deficit and the cash surplus is the life cycle of the housing stock; based on the Council’s Asset Management Plan for the portfolio, significant structural renewals are programmed to occur outside this current 10 year period which has the effect of lowering the renewal estimates. The Council’s operating budget includes internal Council charges:

Ground Maintenance The Council’s City Parks department currently delivers ground maintenance services to the value of $120,000 per annum. This is a full cost recovery and does not include a margin. These costs have been included in the budget because they represent the true and full cost of providing this service, a service that would still need to be undertaken if the housing stock was sold.

Ground Rental Graham Street The Council currently leases the land under the 13 Graham Street complex from the Domain Endowment Fund. The cost of this lease is $50,000. If this complex was sold the overall direct expenditure would reduce by this $50,000. The lease has a 21 year term expiring on 31 January 2028

6 Housing for the Older Person Policy http://www.hamilton.govt.nz/our-council/policies-bylaws/policies/Documents/Housing%20for%20the%20Older%20Person%20-%20June%202012.pdf 7 Direct expenditure includes painting housing stock on an as required basis, in previous periods this was included as renewal expenditure. 8 The Council currently charges organisational overheads on a direct cost approach; the housing activity’s share of these costs is approximately $230k per annum which represents less than 1% of the total charged across all budgets with the organisation. If the Council sells the social housing stock, these costs would be different for the purchaser.

http://www.hamilton.govt.nz/our-council/policies-bylaws/policies/Documents/Housing%20for%20the%20Older%20Person%20-%20June%202012.pdf

http://www.hamilton.govt.nz/our-council/policies-bylaws/policies/Documents/Housing%20for%20the%20Older%20Person%20-%20June%202012.pdf

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Prior Year Annual Plan

('000s)

Rental Income 1,979 2,201 2,085 2,085 2,085 2,085 2,085 2,085 2,085 2,085 2,085 2,085 20,850

Direct Expenditure 884 1,320 948 976 1,105 1,971 832 906 947 973 1,036 863 10,557

Indirect Expenditure 225 225 233 233 233 233 233 233 233 233 233 233 2,330

Depreciation 980 926 926 926 926 926 926 926 926 926 926 926 9,260

Asset Write downs 103

Accounting Surplus/(Deficit) (213) (270) (22) (50) (179) (1,045) 94 20 (21) (47) (110) 63 (1,297)

Adjustment to Cash

Depreciation (non-cash) (1,083) (926) (926) (926) (926) (926) (926) (926) (926) (926) (926) (926) (9,260)

Renewal Expenditure 448 256 449 272 287 890 930 707 1,574 118 843 1,200 7,270

Cash Surplus/(Deficit) 422 400 455 604 460 (1,009) 90 239 (669) 761 (27) (211) 693

13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21Year

21/22 22/23 23/24 24/25

"Draft" 15/25 10-Year Plan

Total: 10-

Year Plan

with perpetual rights of renewal. The land has a current estimated market value of $630,000. If the complex at 13 Graham Street is sold part of the sale proceeds will revert to the Domain Endowment Fund in accordance with the Council’s Free-holding of Endowment Land policy.

On the sale of this property the impact on removing the lease will not be significant to Council overall.

8.2 Renewals (to maintain units at the current level) Renewals funding maintains assets at the current standard and covers items such as replacement of roof and gutters, internal joinery (sinks/tubs & vanities), wall linings, fencing, car park resealing, stoves, plumbing, hot water cylinders and electrical switchboards. Replacement of these components is on a like for like basis, and while the asset is maintained to a reasonable standard, there is no increase in standards to reflect current standards and services expected in new builds. The Asset Management Plan forecasts renewals expenditure to total $7.2million over the coming 10 year period, with this renewals programme aiming to maintain units at the current standard; it does not address the need for improvements and only replaces like for like.9 The table below shows the operating and renewals budget for the 2013/14 (actual) – 2024/25 period.

The Council maintains a housing reserve, which was established in 2012 with the sale proceeds of $3.603 million from the sale of three complexes. This cash reserve is for renewals expenditure. The balance at 2013/14 is approximately $3.3 million with interest allocated annually at approximately 5% p.a. Based on the cash surplus identified above it is not expected that the Council will need to access this fund in the 10 year period to 30 June 2025. 8.3 Capital Expenditure (to improve the standard of units) Capital works are separate to renewals and improve the standard of the stock, for example level access showers, installation of forced ventilation, improvements to car parking. The Council funds capital expenditure through debt.

9 It is likely the spread of costs for renewals will smoothed to a more consistent year by year cost during the long term plan budget setting process.

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The condition of the housing portfolio was assessed in 2013/14 along with Property Quality Statements (PQS). The PQS identified areas that should be improved to bring the stock up to a more modern standard.

In addition to the annual renewal programme funded by the sale of properties in 2012, an estimated cost of $1.7 million over the next 10 years has been included in the Asset Management Plan to implement the following improvements10:

installing level access showers (in lieu of baths or raised shower cubicles/trays) *

installing external power points and providing space for mobility scooters *

installing extract fans to bathrooms (vented externally) where no ventilation currently exists

installing extracts fans or range hoods to kitchen areas (vented externally) where no ventilation currently exists

replacing standard power points with Residual Current Devices (RCD’s) in wet areas (laundries and bathrooms etc)

installing security chains and peepholes to external doors and security stays to windows.

installing thermal curtains/drapes to windows

installing double power points to the kitchens

additional car parking

*denotes items applicable to housing for older persons Even if the Council agrees $1.7 million capital expenditure (which adds an additional operating cost for financing of $561k cumulative over the 10 year period), it is not possible to achieve the Housing New Zealand new build standards for social housing due to more fundamental issues such as inability to retrofit insulation to walls and costs of double glazing. It is estimated that double glazing alone would cost $2.9 million.

A Housing New Zealand suspensory loan of $480,000 was taken out in 2006 for 20 years against 13 Graham Street to upgrade the complex. It is interest free for a 20 year period, thereafter Housing New Zealand has first opportunity to purchase the property (at current market rate) if the Council decided to sell. Housing New Zealand has previously indicated it has little interest in purchasing existing complexes and will instead concentrate on new builds. If the Council sells the complex prior to termination of the 20 year period, either on the open market or to a sympathetic provider, the loan will need to be repaid plus interest. The Council could consider further increasing existing levels of service. Levels of service fall into two broad categories:

Physical improvements to the assets (accessibility, amenity, health and safety)

Quality improvement in social service provided (‘wrap-around’ services)

10 The Council has not yet approved any capital expenditure for the next 10 year period.

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Potential Options

The Council is considering whether to continue to deliver social housing for older persons and set out

below are the options.

Option 1 – Status Quo (continue to provide the service in the same way) This option proposes that the Council continue to deliver the service and the housing for older persons properties are retained. The operation, management and maintenance would continue to be provided by the Council in the same was as it currently is. Option 2 – Contract out service (continue to own properties but lease them and the service to a third sector provider) This option proposes that the Council retains ownership of the social housing land and buildings and

leases the properties to a sympathetic provider. The sympathetic provider would be responsible for

the operation, management and maintenance of the properties and would provide all tenant

management and welfare services.

Option 3 – Retain the Service with Partial Sale of Properties (continue to provide the service with changes) This option proposes that the Council continue to deliver the service with sale of some of the properties that are no longer appropriate as Council-owned housing for older persons (although they may be appropriate as social housing for others). The remaining properties would be retained and operated by the Council as housing for older persons in the same way as it currently is. Option 4 – Cease the Service and Sell the Properties (cease to provide the service) This option proposes that the Council would cease to provide the service and would exit the sector. All the Council owned properties would be sold. There are three sub-options.

Option 4A Sale on the Open Market to maximise the financial return to the Council. This option means the properties would be placed on the open market for sale with vacant possession on a “best and highest use” basis intended to maximise the sale proceeds. Option 4B Sale to a sympathetic social housing provider. This option means the properties would be sold to a social housing provider on the condition that they remain in social housing (whether for older persons or others) for a specified period.

Option 4C A combination of options A and B. This option means the entire property portfolio would be offered for sale to sympathetic social housing providers in the first instance for ongoing use as social housing. The properties that are not sold to sympathetic social housing providers would then be placed on the open market for sale with vacant possession on a “best and highest use” basis intended to maximise the sale proceeds.

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Option 1 – Status Quo (continue to provide the service in the same way)

This option proposes no change to the existing service. The operation, management and maintenance would continue to be provided in-house as it is now. The vacant land adjoining the Sullivan Crescent complex could be subdivided and sold on the open market with the intention of maximising the return.11 The Council could review its criteria and assessment processes to ensure those most in need have access to the older persons housing. The criteria and assessment processes could align with the more stringent ones applied by MSD which includes periodic review of tenancies and requires more evidence around assets and income.

How Does this Option Respond to the Issues?

The issues identified in this Options Paper would not be addressed, apart from ensuring Hamilton’s social housing stock is in part not diminished

Consequences of this Option

The Council would need to commit to a debt funded capital expenditure programme of at least $1.7million in the Long Term Plan to address the housing standards deficiencies

Rentals would need to be increased to maintain a cost neutral operating position

Option 2 – Contract out service (continue to own properties but lease them and the service to a third sector provider)

11 The estimated value of this land is $380,000

Key Points:

The Council continues to provide housing for older persons services

The portfolio is retained and management continued in-house

Some service level improvements would need to be made

Does not address the issues identified in this Options Paper apart from ensuring in part that Hamilton’s social housing stock is not diminished

A review of the eligibility criteria and ongoing assessment of social need could be undertaken to focus the service on those most in need

Rentals would need to be increased to maintain a cost neutral operating position

Key Points:

The Council no longer provides housing for older persons services directly

The entire portfolio is leased to a sympathetic social housing provider

The property portfolio is retained in Council ownership

Potential for some service level improvements to be made

Does not address the issues identified in this Options Paper apart from ensuring in part that Hamilton’s social housing stock is not diminished


The social housing provider carrying out the service is likely to want to offer the housing as social housing instead of housing for older persons only

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This option proposes that the Council retains ownership of the housing for older persons land and

buildings but leases them to a sympathetic provider12. The sympathetic provider would be responsible

for the operation, management and maintenance of the properties and would provide all tenant

management and welfare services.

A sympathetic provider could access the Government Income Related Rent Subsidy if they are a

registered accredited Community Housing Provider and provided they make the housing available for

social housing for all who meet the Ministry of Social Development criteria. They would not be eligible

to access Government capital funding (SHU funding) for stock they do not own.

The sympathetic provider leasing the properties would seek a financial return (funded by the Council

or the tenant) and while the model provides potential extra benefits to the tenant like wrap-around

service, these same benefits could be provided by the Council directly through adjustments to existing

levels of service.

How Does this Option Respond to the Issues?

The issues identified in this Options Paper would be partially addressed: - Hamilton’s social housing stock remains largely intact and could be expanded if the Council’s

housing is made available for social housing - There would be a potential improvement in service levels available to tenants – including “wrap

around” services. Consequences of this Option

This option changes the purpose of Council’s current housing for older persons stock, and extends the service to provide social housing to those who meet the Ministry of Social Development criteria, rather than just housing for older people.

The change in focus will impact current tenants that do not meet the social housing needs assessment criteria managed by Ministry of Social Development.

This model can be successful, if a sympathetic provider gradually changes the mix of tenants over a period of time to ensure their social housing needs comply with the needs assessment guidelines, and to ensure those who meet the assessment criteria are supported through access to the income related rent subsidies. The timeframe for transition from existing tenants to a new tenant mix could be protracted.

This model would demonstrate Councils commitment to providing social housing to the wider community, and assisting central governments objectives to building the third sector, under the social housing reforms.

This option does not release the Council from its ongoing financial commitment to a debt funded capital expenditure programme of at least $1.7million in the Long Term Plan to address the housing standards deficiencies

Irrespective of a change to providing the housing for all social housing, rentals would need to be increased by the contracted service provider to maintain a cost neutral operating position

12

The Christchurch City Council has issued a Statement of Proposal that reflects this intended structure, but it is subject to government

confirmation.

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Option 3 – Retain the Service with Partial Sale of Properties (continue to provide the service with changes)

This option means the properties owned by the Council would be categorised on the basis of their suitability as housing for older persons and those not considered suitable in the long term would be sold on the open market or to sympathetic providers. The remaining properties would be retained as housing for older persons and the service would be operated as it currently is. The Council has sold a number of complexes in recent times when it has become apparent that the costs of maintenance and renewal have become uneconomic. There remain a small number of complexes that are no longer ideally suitable as housing for older people (although they may be suitable for other social housing). These complexes contain multi-storey units or are built on sloping sites, and there are also a small number of complexes that contain very few units and therefore do not have the same economy of scale as larger complexes.

The criteria applied in 2012 to identify those complexes not suitable as housing for older persons would be applied to the current portfolio. This is an analysis of the specific property’s fitness for purpose with particular regard to:

Age and Location

Size

Suitability and Amenity

Cost

Proximity to Services (shops, medical care, transportation)

Based on the criteria, 6 sites (5 complexes and 1 vacant site) with an approximate current market value of $8million would be placed on the market for sale. The vacant land adjoining the Sullivan Crescent complex could be subdivided and sold on the open market with the intention of maximising the return.13 The Council could review its criteria and assessment processes to ensure those most in need have access to the older persons housing. The criteria and assessment processes could align with the more stringent ones applied by MSD which includes periodic review of tenancies and requires more evidence around assets and income. How Does this Option Respond to the Issues?

The issues identified in this Options Paper would be partially addressed: - Hamilton’s social housing stock remains largely intact

13 The estimated value of this land is $380,000 but if sold to a social housing provider it may be less

Key Points:

Some of the portfolio would be sold some would be kept

Sale on the open market or to sympathetic providers

Portfolio categorised to identify properties to be sold

Properties sold with either vacant possession or tenants in place

Hamilton’s social housing stock remains largely intact

The Council rentals for the remaining complexes would need to be increased to maintain a cost neutral operating position

Sale proceeds could be used to repay debt or used to improve existing stock or build in growth areas


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- There would be operational and capital financial savings to the Council Consequences of this Option

Non government social housing providers may be successful purchasers and be able to improve the complexes sold to a standard sufficient for social housing uses

Financial outcomes - Net sale proceeds available to repay debt or fund capital improvements - Operational interest savings resulting from lower debt

The Council would still need to commit to a debt funded capital expenditure programme of at least $120,000 per annum ($50,000 reduction due to 6 sites sold) in the Long Term Plan to address the housing standards deficiencies in the remaining complexes

The Council rentals for the remaining complexes would need to be increased to maintain a cost neutral operating position

Option 4 – Cease the Service and Sell the Properties (cease to provide the service)

This option means the Council would sell the entire portfolio of properties and would cease providing the service. There are three sub options to consider.

Option 4A - Sale on the open market to maximise the financial return to the Council

Option 4A means the Council would cease providing the service and the properties are sold on the open market for the highest prices to maximise the financial return to the Council. A property consultant would be appointed in accordance with Council’s professional procurement policy and the properties marketed through a public “Expressions of Interest” process. An example of this option is the recent sale of the Te Aroha Street complex on the open market to the highest bidder. The property was sold with vacant possession on a “best and highest use basis” intended to maximise the financial benefit to the Council.

Key Points:

The Council no longer provides housing for older persons services.

The entire portfolio sold on the open market for the highest price.

Properties sold with vacant possession.

Progressive sale over an 18 month period.

Hamilton’s stock of social housing will be reduced.

The Housing Renewal Fund would no longer be required and the funds would be available to the Council for other purposes or to repay debt

Sale proceeds could be used to repay debt

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Option 4B - Sale to a sympathetic social housing provider

Option 4B means the Council will cease providing the service and the properties are sold to social housing providers with a contract stipulation that the properties must remain in social housing for a specified period of time (either housing for older persons or for general social housing). This will be achieved through an encumbrance on the Certificate of Title. The Council will consult directly with social housing providers and agencies to determine sector capacity to purchase and a property consultant would be appointed in accordance with Council’s professional procurement policy to market the properties to the sector through a public “Expressions of Interest” process. Council may choose to consider a variety of payment and settlement options where there is a quantifiable benefit. If sale to a sympathetic provider encumbers the property with binding obligations the sale price may reflect those requirements. The sale price to a sympathetic provider may vary depending on whether the provider is accredited or not, and consequently has access to the Income Related Rent Subsidy provided by the Government. The properties will be marketed to sympathetic providers to allow Council maximum flexibility to negotiate the best possible outcome within the range of constraints. Option 4C - Combination of Options 4A and 4B

Option 4C means the Council will cease providing the service. The entire property portfolio would be marketed to sympathetic social housing providers over a six month period in the first instance. The

Key Points:

The Council no longer provides housing for older persons services.

The entire portfolio sold to a sympathetic social housing provider with contract stipulation to maintain as social housing.

Sale proceeds would reflect a sale to a sympathetic social housing provider.

Properties would be sold with existing tenants in place.

Progressive sale over an 18 month period.

Hamilton’s stock of social housing is not reduced.



Key Points:

The Council no longer provides housing for older persons services

The entire portfolio would be sold to sympathetic providers in the first instance with existing tenants in place

Properties not sold to social housing providers would be sold with vacant possession on the open market

Progressive sale over an 18 month period

Hamilton’s stock of social housing may be reduced



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properties would be marketed with existing tenants in place. Council could allow sympathetic providers some flexibility in future use and development of the units – such as demolition and rebuild, or on-sale and consolidation on other sites – provided that the ongoing provision of social housing was maintained at existing levels or increased levels. Those properties that are not transferred to sympathetic providers would then be progressively sold on the open market over a twelve month period. The properties would be offered on the open market with vacant possession on a “best and highest use” basis intended to maximise the sale proceeds. The process and terms outlined in Options 4A and 4B above apply. An example of this option is the recent sale of the River Road, Johnson Street and Ascot Reid Ryan properties. The three properties where marketed together through a public “Expressions of Interest” process on the open market. Two of the properties sold to the highest bidder and the Johnson Street property sold to a sympathetic provider. How Does Option 4 Respond to the Issues?

Sale to social housing providers addresses the issues identified in this Options Paper: - There is a high likelihood that social housing available in Hamilton will increase - Wrap around services will be provided - The Council’s financial challenges are addressed

Sale to the open market would partially address the issues identified in this Options Paper: - The Council’s financial challenges are addressed - Social housing available in Hamilton would decrease

Consequences of Option 4

Existing tenants may be affected depending on who purchases

The Council would no longer provide housing for older persons and sale proceeds could be applied for other uses or to repay debt

Sale to social housing providers provides opportunities to grow social housing available in Hamilton and for investment to occur in the social housing sector

Sale to the open market does not assist in meeting social housing needs in Hamilton

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Financial Outcomes from Option 4 The attached table highlights the a) operating, b) debt and c) domain endowment fund impact of the 3 options.

Notes:

1 The agreement with Housing New Zealand allows for the payment of interest on the HNZC Loan should the property be sold within the 20 year period from March 2007. For the purpose of this exercise the financial analysis reflects a conservative approach and includes an interest payment of $300k across all three options.

2 The operating impact is the impact on a per annum basis. 3 Domain Endowment Fund does not impact the overall operations of Council as it a payment

from one Council Activity to another; Council would be better off by $37k per annum by the interest received on investing the proceeds from the sale of Graham Street.

4 The City Parks maintenance contract would positively impact Council’s operations to the extent that the service could be optimised and the City Park overall costs are reduced. The reduction in costs is assumed in the above table.

5 The Annual Corporate Overheads allocated to the Housing Activity is $250k, this represents 1% of total overheads. The impact of not owning the Social Housing would be negligible on these costs and they would not reduce significantly.

6 The Estimated Sale Proceeds are based on capital value from the rating valuation (as at 1 September 2012). Option 4A is the current capital value of the portfolio. Option 4B is the current capital value less a 33% discount to a sympathetic provider – noting that the discount rate is for illustrative purposes only and will not necessarily apply, given the changes in the legislation allowing approved social housing providers access to income related rent subsidies and government SHU funding. Option 4C is the mid-point between Option 4A and Option 4B. The rating valuation was within 3% of the gross sale price achieved for the most recent sale of three Council-owned complexes (River Road, Johnson Street and Ascot Reid Ryan).

('000s)

Net Sale Proceeds

Estimated Sale Proceeds (Housing) 26,020 17,220 21,620

Estimated Sale Proceeds (Sullivan Cres Land) 380 380 380

Less: Repayment of the HNZC Loan on Graham Street (480) (480) (480)

Less: Repayment of the Interest on the HNZC Loan on Graham Street 1 (300) (300) (300)

Less: Selling Costs (including commission and other costs - based on 7.5%) (1,980) (1,320) (1,650)

Total Net Sale Proceeds 23,640 15,500 19,570

a) Operating Impact 2

Estimated Interest Savings if all proceeds used to repay debt (based on 6%) 1,381 893 1,137

Domain Endowment Lease 3 0 0 0

Domain Endowment Fund Interest (on the sale of Graham Street)3 37 37 37

City Park Maintenance Contract 4 120 120 120

Annual Corporate Overheads 5 0 0 0

Net Operating Positive/(Negative) Impact 1,538 1,050 1,294

b) Debt Impact

Total Net Sale Proceeds 23,640 15,500 19,570

Transfer of Net Sale Proceeds on Graham Street to Domain Endowment Fund (612) (612) (612)

Debt Positive/(Negative) Impact 23,028 14,888 18,958

c) Domain Endowment Fund Impact

Transfer of Net Sale Proceeds on Graham Street to Domain Endowment Fund 612 612 612

Domain Endowment Fund Positive/(Negative) Impact 612 612 612

Option 4A Option 4B Option 4C

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Factors to take into Consideration with Options

The following factors will need to be taken into account when considering the options. 1. Market Capacity Market capacity has not been tested. It is possible there will be a limited number of approved social housing providers capable of purchasing the portfolio as a whole. A more likely outcome is there will be a variety of potential purchasers for multiple or single properties. Independent advice from property sector experts indicates that the Hamilton market for multi-tenancy sites could absorb existing listings plus four diversified (type and location) Council properties every six months. The properties would be marketed progressively over an eighteen month period concluding in September 2016. 2. Tenant Occupancy During the Sale Process Properties sold to an open market purchaser are likely to require vacant possession. The minimum notice required under the Residential Tenancies Act is 90 days.

Options for re-housing current tenants depend on the assessment process of other social housing providers and the vacancy level within those providers. Council tenants may not be eligible with the Ministry of Social Development or other providers for rehousing because the Council’s social housing application process is not as comprehensive as the process adopted by the Ministry for registered community housing providers. Eligible tenants would take their place on the waiting list according to their need. Attachment 7 provides information about the Ministry of Social Development criteria and social housing waitlist process. There are a number of contract conditions that the Council could apply in the sale terms, for example, the Council can make a condition of sale on the open market a requirement to continue tenancy until there is a suitable alternative in place for the current tenant. The Council can work with other sympathetic providers such as Sunnyingdale or Abbeyfield to provide accommodation. Properties sold to a sympathetic provider would be sold with existing tenancies. During the 2012 sale process, properties were offered for sale on the open market with vacant possession and no nominated market price through an Expressions of Interest process. This process allowed Council to capture the broadest range of market interest and consider a variety of potential purchase proposals – from sale to a sympathetic provider to sale to a developer. The Council rehoused tenants in the sale properties to other Council owned units over a 12 month period of time.

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INDEX OF ATTACHMENTS Attachment 1 Housing for the Older Person Asset Summary Pg 22 Attachment 2 Housing Locations Map Pg 23 Attachment 3 Summary of Housing for the Older Person Portfolio Pg 24-66 Attachment 4 Cost of the Service to the Tenant Pg 67-68 Attachment 5 Market Rents – Hamilton Pg 69 Attachment 6 Social Housing Glossary of Terms, and Roles & Responsibilities Pg 70-71 Attachment 7 Allocation of Social Housing Pg 72-73 Attachment 8 Hamilton Population Growth Pg 74-75

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ATTACHMENT 1 Housing for the Older Person – Asset Summary

Location Suburb Land Value Improvements Value Capital Value

No. Of Units Year Built

Condition Rating Category

169 Bankwood Rd Chartwell $490,000 $910,000 $1,400,000 19 1985 2 3

187 Clarkin Rd Clarkin $720,000 $880,000 $1,600,000 27 1987 2 3

52 Comries Rd Chartwell $1,000,000 $2,000,000 $3,000,000 36 1989/1976 2 3

16 Crosher Silverdale $1,650,000 $800,000 $2,450,000 35 1976 2 2

29 Dinsdale Rd & 26 Rothwell St Dinsdale South $675,000 $870,000 $1,545,000 18 1986/1989 2 1

41 Donny Ave Chartwell $350,000 $300,000 $650,000 6 1986 2 2

185 Sandwich Rd Bryant $290,000 $570,000 $860,000 9 1991/1977 3 3

24 Gibson Rd Dinsdale North $770,000 $805,000 $1,575,000 26 1977 3 3

13 Graham St & 19 Graham St Hamilton East $915,000 $2,390,000 $3,305,000 40 1966/1978 2 2

8 Korimako St Frankton Junction $720,000 $505,000 $1,225,000 18 1984 2 2

81 Livingstone Ave Nawton $540,000 $1,260,000 $1,800,000 34 1980 3 1

46 Matai St Maeroa $405,000 $545,000 $950,000 12 1992 2 3

310 Peachgrove Rd Enderley $380,000 $770,000 $1,150,000 20 1979 3 3

22 Stokes Cr Maeroa $285,000 $375,000 $660,000 8 1976 2 3

1 Sullivan Cr Claudelands $760,000 $1,890,000 $2,650,000 19 2011 1 2

9 Walker Tc Dinsdale North $143,000 $247,000 $390,000 4 1976 2 2

30 Yvonne St Melville $425,000 $775,000 $1,200,000 13 1981 2 3

$10,518,000 $15,892,000 $26,410,000 344

17

Condition Grade Key 1. Property is kept to a high quality standard and condition 2. Property is kept to a good standard 3. Property is in average condition 4. Property is in a fair condition 5. Property is in a poor condition

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ATTACHMENT 2 Housing Locations Map

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ATTACHMENT 3 Summary of the Housing for Older Persons Portfolio

Summary of Housing for the Older Person Stock

Number of Complexes 17 (note 19 street locations)

Number of Units 344

Net Income Summary 2013/14 Financial Year

Building Valuation 26,300,000

Gross Income 1,979,000

Current Operating Expenses 1,212,000

Depreciation (non cash) 980,000

Net Income/(Deficit) (213,000)

The portfolio is fully tenanted and there are 9 people currently on the waiting list.

The rents are standardised across the city regardless of location, quality or proximity to services.

Portfolio Overview Whilst the stock varies in age (from 1966 through to 2011), the units are structurally sound and are kept to a reasonably good condition and standard. 19 modern units were constructed at Sullivan Crescent in 2011. 13 Graham Street was modernised in 2007 with the interiors gutted, new wall linings and new bathroom, laundries and kitchens installed. All exterior windows and doors were replaced as well as the exterior cladding. Recently insulation was replaced at some complexes where the contractors were able to access the relevant areas e.g. under units which had timber floors or within accessible ceiling spaces. While the existing units meet the building act requirements at the time of when they were built, they do not compare with today’s requirements in terms of accessibility, insulation and ventilation requirements and double glazing etc. The majority of the units need some form of modernisation. This includes installation of ventilation to the bathrooms and kitchen areas, replacement of baths/shubs with level access showers, installation of RCD units (residual current devices) into wet areas (bathrooms and laundries), scooter access parking and associated external power point connection, ramps and level access footpaths to front and rear of the units and additional car parking requirements.

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The summary of all complexes is outlined in the table below.

Site Units Commentary Valuation

Bankwood Road 19 Built 1985. Hardiplank construction, aluminium windows, corrugated iron roof. All double bedroom size. Close to Westfield Shopping Centre, Chartwell and good bus service to city.

$1,400,000

Clarkin Road 27 Built 1987. Hardiplank construction, aluminium windows, corrugated iron roof. Situated on a rear site in Clarkin Road. Easy access to Westfield Shopping Centre via a good bus service to Chartwell and city... All double bedroom size.

$1,600,000

Chequers Ave & Comries Road

36 Comries built 1976 and extended to include Chequers 1989. Back to back complexes. New insulation to ceiling and underfloor installed in 2013 for units 23 to 26. Chequers Ave - Hardiplank construction, aluminium windows, and corrugated iron roof. Comries - Brick veneer, aluminium windows, corrugated iron roof. Close to Westfield Shopping Centre, Chartwell and good bus service including the orbiter. A mixture of single and double bedroom sizes.

$3,000,000

Crosher Place 35 Built 1976. New trough section roofs and ceiling insulation installed. Block walls between tenancies. Possible potential to be able to build some more units on the site. No common area for tenants to congregate. Bedroom suitable for single to king single size bed only. Good bus service to city.

$2,450,000

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Dinsdale Rd & Rothwell Street

18 Dinsdale built 1986, Rothwell built 1989. Back to back complexes – both complexes hardiplank construction, aluminium windows, corrugated iron roof. All large sized single bedrooms to accommodate individuals or couples. Elevated and steep site. Not suitable for persons with restricted mobility. Close to Dinsdale Shopping Centres and bus stops. Shortage of parking – some land / road opportunity to develop additional carparking.

$1,545,000

Donny Ave 6 Built 1986. Attractive complex of six units; one stand alone. Situated in a quiet street in the heart of Queenwood. Three rear units have gully aspect. Four carports. Stucco like construction some with a brick feature. 4 resident carports. Unique site.

$650,000

Sandwich Road & English Street.

9 Sandwich built 1976, English built 1991. Back to back complexes. Both Hardiplank construction and aluminium windows, mixture of corrugated iron and decramastic roofs. All large sized single bedrooms to accommodate individuals or couples. Close to Sandwich Road Shopping Centre and The Base. New insulation to ceilings and underfloor installed in 2012.

$850,000

Gibson Road 26 Built 1977. Hardiplank construction, aluminium windows, decramastic roof. Elevated site, some units below road level and not facing north meaning some units do not get any or get minimal sun during the day. Mixture of small and large sized single bedrooms. New insulation to ceilings and underfloor installed in 2012.

$1,475,000

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13 & 19 Graham Street

40 13 Graham built 1966, 19 Graham 1978. Both complexes next to each other spread over 3 titles. Access to 19 Graham Street car park is from 13 Graham Street property. 13 Graham Street is on leasehold land. 13 Graham Street units upgraded and modernised in 2007. Provides for good accessibility. There are 2 units that are 2 bedrooms. Suggest that if considered for sale that both properties are sold as 1 lot (option to use as a mixed tenancy site). 19 Graham Street a mixture of 2 storey and single level units. Mixture of single and double bedroom sizes. Some distance from shops with bus service accessed from an adjacent street. New insulation to 19 Graham Street ceilings in 2012.

$3,305,000

Korimako Street 18 Built 1984. Hardiplank construction, aluminium windows, corrugated iron roof. Shortage of parking – land opportunity available to extend carpark spaces. Potential to sell or develop land where Unit 18 is positioned. Unit 18 on separate title. All large sized single bedrooms to accommodate individuals or couples. Close to Dinsdale Shopping Centres, Schools and bus stops

$1,225,000

Livingstone Ave 34 Built 1980. Mixture of double and

single storey units. Double storeys are

hard to tenant because of accessibility.

Block wall between double story

tenancies. Good prospects for mixed

age tenancy. Concrete block

construction. Double story units set

below Waimarie Street road level and

not facing north meaning some units

do not get any or get minimal sun

during the day. All large sized single

bedrooms to accommodate individuals

or couples. 7 resident carports. Large

communal (lockable) storage shed and

garden. Close to Grandview Shopping

Centre, Western Community Centre,

schools and bus stops. New insulation

installed to ceilings in 2012.

$1,800,000

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Matai Court 13 Built 1992. Hardiplank construction,

aluminium windows, corrugated iron

roof. 7 resident carports. All large sized

single bedrooms to accommodate

individuals or couples.

$950,000

Peachgrove Road 20 Built 1979. Brick veneer, aluminium

windows, corrugated iron roof. Parking

at a premium. Close to Five Cross

Roads Shopping centre and easy access

to Westfield Shopping Centre via a

good bus service including the Orbiter.

New insulation to ceilings in 2012.

$1,150,000

Stokes Cr 8 Built 1976. Brick veneer, aluminium

windows and decramastic roof. All

large sized single bedrooms to

accommodate individuals or couples.

New insulation installed in ceilings in

2012.

$660,000

Sullivan Crescent 19 Built in 2011. 19 Modern units.

Undeveloped land approximately

2900m2, potential to subdivide and sell

off surplus land or room to build

another 10-11 units on the site.

Resource Consent expires in 2015.

Handy to 5 Cross Roads, new

Countdown shopping centre to be built

across the road. 2 accessible units.

Good sized bedroom. Good bus service

including the orbiter.

$2,650,000

Walker Terrace 4 Built 1976. Brick veneer, aluminium

windows, corrugated iron roof. Close

to Dinsdale Shopping Centres, Schools

and bus stops. New insulation installed

in ceilings in 2012. Unique site

$390,000

Yvonne Street 13 Built 1991.Hardiplank construction,

aluminium windows, corrugated iron

roof. All large sized single bedrooms to

accommodate individuals or couples.

$1,200,000

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The following pages outline an overall summary of the sites. Each site has been given a condition grade rating in terms of the standard and condition of the site. The majority of the sites have a condition grade of 2. The condition grade as follows:

Condition Grade Key 1. Property is kept to a high quality standard and condition 2. Property is kept to a good standard 3. Property is in average condition 4. Property is in a fair condition 5. Property is in a poor condition

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Asset Name: Bankwood Road, 19 Units

Physical Address: 169 Bankwood Road Year Built: 1985 Condition Grade: 2 Building Valuation: $ 1,400,000 Commentary: Hardiplank construction, aluminium windows, corrugated iron roof. All double bedroom size. Close to Westfield Shopping Centre, Chartwell and good bus service to city. No room for adding any more units.

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Asset Name: Bankwood Road, 19 Units

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Asset Name: Clarkin Road, 27 Units

Administrative Area: Housing Assets Physical Address: 187 Clarkin Road Year Built: 1987 Condition Grade: 2 Capital Value $ 1,600,000 Commentary: Hardiplank construction, aluminium windows, corrugated iron roof. Easy access to Westfield Shopping Centre via a good bus service to Chartwell and city. All double bedroom size. No room for adding any more units.

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Asset Name: Clarkin Road, 27 Units

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Asset Name: Comries/Chequers Avenue, 36 Units

Administrative Area: Housing Assets Physical Address: Chequers Avenue/52 Comries Road Year Built: 1989/1976 Condition Grade: 2 Valuation $ 3,000,000 Combined Value Commentary: Comries built 1976 and extended to include Chequers 1989. Back to back complexes. Chequers Ave - Hardiplank construction, aluminium windows, and corrugated iron roof. Comries - Brick veneer, aluminium windows, corrugated iron roof. Close to Westfield Shopping Centre, Chartwell and good bus service including the orbiter. A mixture of single and double bedroom sizes. No room for adding any more units. New insulation to ceiling and underfloor installed in 2013 for units 23 to 26.

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Asset Name: Comries/Chequers Avenue, 36 Units

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Asset Name: Crosher Place, 35 Units

Administrative Area: Housing Assets Physical Address: 16 Crosher Place Year Built: 1976 Condition Grade: 2 Valuation $ 2,450,000 Commentary: Built 1976. New trough section roofs, ceiling insulation installed and bathrooms modernised in the last 3-4 years. Block walls between tenancies. Possible potential to be able to build some more units on the site. No common area for tenants to congregate. Bedrooms suitable for single to king single size bed only. Good bus service to city.

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Asset Name: Crosher Place, 35 Units

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Asset: Dinsdale Road, 13 Units

Rothwell Street 5 Units

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Asset: Dinsdale Road, 13 Units Rothwell Street 5 Units

Administrative Area: Housing Assets Physical Address: 29 Dinsdale Rd & 26 Rothwell St Year Built: 1986 (Dinsdale) 1989 (Rothwell) Condition Grade: 2 Valuation $ 1,545,000 (Combined value) Commentary Dinsdale built 1986, Rothwell built 1989. Back to back complexes – both complexes hardiplank construction, aluminium windows, corrugated iron roof. All large sized single bedrooms to accommodate individuals or couples. Elevated and steep site. Not suitable for persons with restricted mobility. Close to Dinsdale Shopping Centres and bus stops. Shortage of parking – some land / road opportunity to develop additional carparking. No room for adding any more units.

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Asset:Dinsdale Rd/Rothwell St

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Asset Name: Donny Avenue, 6 Units

Administrative Area: Housing Assets Physical Address: 41 Donny Avenue Year Built: 1986 Condition Grade: 2 Valuation: $ 650,000 Commentary Attractive complex of six units, one stand alone. Situated in a quiet cul-de-sac in a high valued area off River Road. Three rear units have gully aspect. Four carports. Stucco like construction some with a brick feature. No room for adding any more units. Unique gully site.

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Asset Name: Donny Avenue, 6 Units

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Asset Name: English Street/Sandwich Road, 9 Units

Administrative Area: Housing Assets Physical Address: 20 English Street/185 Sandwich Road Year Built: 1991/1977 Condition Grade: 3 Valuation $ 850,000 Combined Value Commentary Back to back complexes. Both Hardiplank construction and aluminium windows, mixture of corrugated iron and decramastic roofs. All large sized single bedrooms to accommodate individuals or couples. Close to Sandwich Road Shopping Centre and the Base. No room for adding any more units. New insulation to ceilings and underfloor installed in 2012.

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Asset Name: English Street, 3 Units

Asset Name: Sandwich Road, 6 Units

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English St/Sandwich Rd – 9 Units

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Asset Name: Gibson Road, 26 Units

Administrative Area: Housing Assets Physical Address: 24 Gibson Street Year Built: 1977 Condition Grade: 3 Valuation $ 1,475,000 Commentary Hardiplank construction, aluminium windows, decramastic roof. Elevated site, some units below road level and not facing north meaning some units do not get any or get minimal sun during the day. Mixture of small and large sized single bedrooms. Potential to add more units, however due to the elevated nature of the site, costs to build and accessibility could be an issue. New insulation to ceilings and underfloor installed in 2012.

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Asset Name: Gibson Road, 26 Units

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Asset Name: 13 Graham Street

Asset Name: 19 Graham Street

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Asset Name: 13 & 19 Graham Street, 40 Units

Administrative Area: Housing Assets Physical Address: 13 & 19 Graham Street Year Built: 1966 (13) 1978 (19) Condition Grade: 2 Valuation $ 3,305,000 Commentary 13 Graham built 1966, 19 Graham 1978. Both complexes next to each other spread over 3 titles. Access to 19 Graham Street car park is from 13 Graham Street property. 13 Graham Street is on leasehold land. 13 Graham Street units upgraded and modernised in 2007. Provides for good accessibility. There are 2 units that are 2 bedrooms. Suggest that if considered for sale that both properties are sold as 1 lot (option to use as a mixed tenancy site. 19 Graham Street a mixture of 2 storey and single level units. Mixture of single and double bedroom sizes. Some distance from shops with bus service accessed from an adjacent street. Complex could suit mixed tenure. New insulation to 19 Graham Street ceilings in 2012.

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Asset Name: 13 & 19 Graham Street, 40 Units

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Asset Name: Korimako Street, 18 Units

Administrative Area: Housing Assets Physical Address: 4 Korimako Street Year Built: 1984 Condition Grade: 2 Valuation $ 1,225,000 Commentary Hardiplank construction, aluminium windows, corrugated iron roof. Shortage of parking – land opportunity available to extend car-park spaces. Potential to sell or develop land where Unit 18 is positioned. Unit 18 on separate title. All large sized single bedrooms to accommodate individuals or couples. Close to Dinsdale Shopping Centres, Schools and bus stops.

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Asset Name: Korimako Street, 18 Units

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Asset Name: Livingstone Avenue, 34 Units

Administrative Area: Housing Assets Physical Address: 81 Livingstone Avenue Year Built: 1980 Condition Grade: 3 Valuation $ 1,800,000 Commentary Mixture of double and single storey units. Double storeys are hard to tenant because of accessibility. Block wall between double story tenancies. Good prospects for mixed tenure. Concrete block construction. Double story units set below Waimarie Street road level and not facing north meaning some units do not get any or get minimal sun during the day. All large sized single bedrooms to accommodate individuals or couples. 7 resident carports. Large communal (lockable) storage shed and garden. Close to Grandview Shopping Centre, Western Community Centre, schools and bus stops No room for adding any more units. New insulation installed to ceilings in 2012.

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Asset Name: Livingstone Avenue, 34 Units

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Asset Name: Matai Court, 12 Units

Administrative Area: Housing Assets Physical Address: 46A Matai Street Year Built: 1992 Condition Grade: 2 Valuation $ 950,000 Commentary Hardiplank construction, aluminium windows, corrugated iron roof. 7 resident carports. All large sized single bedrooms to accommodate individuals or couples. No room for adding any more units.

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Asset Name: Matai Court, 12 Units

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Asset Name: Peachgrove Road, 20 Units

Administrative Area: Housing Assets Physical Address: 310 Peachgrove Road Year Built: 1979 Condition Grade: 3 Valuation $ 1,150,000 Commentary Brick veneer, aluminium windows, corrugated iron roof. Parking at a premium. Close to Five Cross Roads Shopping centre and easy access to Westfield Shopping Centre via a good bus service including the Orbitor. No room for adding any more units. New insulation to ceilings in 2012.

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Asset Name: Peachgrove Road, 20 Units

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Asset Name: Stokes Crescent Flats, 8 Units

Administrative Area: Housing Assets Physical Address: 22 Stokes Cres Year Built: 1976 Condition Grade: 2 Valuation $ 660,000 Commentary Brick veneer, aluminium windows and decramastic roof. All large sized single bedrooms to accommodate individuals or couples. No room for adding any more units. New insulation installed in ceilings in 2012.

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Asset Name: Stokes Crescent Flats, 8 Units

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Asset Name: Sullivan Crescent, 19 Units

Administrative Area: Housing Assets Physical Address: 1 Sullivan Cres Year Built: 2011 Condition Grade: 1 Valuation $ 2,650,000 Commentary 19 Modern units. Undeveloped land approximately 2900m2, potential to subdivide and sell off surplus land or room to build another 10-11 units on the site. Resource Consent expires in 2015. Handy to 5 Cross Roads, new Countdown shopping centre to be built across the road. 2 accessible units. Good sized bedrooms. Good bus service including the orbiter.

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Asset Name: Sullivan Crescent, 19 Units

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Asset Name: 9 Walker Terrace, 4 Units

Administrative Area: Housing Assets Physical Address: 9 Walker Tce Year Built: 1976 Condition Grade: 2 Valuation $ 390,000 Commentary Brick veneer, aluminium windows, corrugated iron roof. Close to Dinsdale Shopping Centres, Schools and bus stops No room for adding any more units. New insulation installed in ceilings in 2012. Unique site.

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Asset Name: 9 Walker Terrace, 4 Units

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Asset Name: Yvonne Court, 13 Units

Administrative Area: Housing Assets Physical Address: 30 Yvonne Street Year Built: 1981 Condition Grade: 2 Valuation $ 1,200,000 Commentary Hardiplank construction, aluminium windows, corrugated iron roof. All large sized single bedrooms to accommodate individuals or couples. No room for adding any more units.

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Asset Name: Yvonne Court, 13 Units

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ATTACHMENT 4 Cost of the Service to the Tenant

The definition of affordable housing used by the Centre for Housing Research Aotearoa New Zealand (CHRANZ) is that housing is affordable when a household spends no more than 30% of its gross income on housing costs, whether for rent or mortgage. Social housing is a form of affordable housing.

HCCs current rent structure Number Bedrooms Rent (Weekly)

One double bedroom $115 (single occupancy)

One double bedroom $139 (couple occupancy)

One single bedroom $ 99 (single occupancy)

Two bedroom unit (special criteria applies) $168

See Attachment 5 – Hamilton Market Rents. Information is sourced from The Ministry of Business and Employment who provide statistics on market rent for each area.

Comparison with other local authority providers

The range listed for some local authorities reflects different rents for different locations in the city. HCC has a single tier system. We have not compared the quality or size of the units with those HCC offers.

Local Authority Rent (weekly)

Wellington City Council (it should be noted that WCC provides a range of social housing from youth to elderly)

$140 -$215

Palmerston North City Council

$107 (single occupancy, double bedroom) $89 (single occupancy, single bedroom)

Tauranga City Council $110 - $129 (single occupancy) $135 - $150 (couple occupancy)

Rotorua District Council $101 - $118 (single occupancy) $126 - $148 (couple occupancy)

Cost to tenant

The cost to tenants can vary depending on the provider they are housed with. The following comparison is for a single person receiving national Superannuation only ($366.94 net per week). The accommodation supplement can also vary as Work and Income have 4 zones across the city. For the purpose of this exercise the zone for Dinsdale has been used as all providers have units in that area.

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Provider Rent charged Accommodation

Supplement Net Rent to tenant

HNZC $91 No additional support $91

HCC $115 $19 additional support $96

Other community provider $175 $61 additional support $114

Accommodation Supplement

The Accommodation Supplement is a weekly payment which helps people with their rent, board or the cost of owning a home, and is administered through Work and Income.

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ATTACHMENT 5 Market Rents – Hamilton

The Ministry of Business Innovation and Employment provides statistics on

market rents for each area. For the July 2013 to December 2013 period the

following information is available for Hamilton.

The average rental for the area has been taken in each case.

Area Market Rent (average rent)

1 bedroom flats/houses

Fairfield / Fairview Downs $187

Claudelands $190

Dinsdale South /Frankton * $145

Dinsdale North /Nawton $234

Hamilton East/University $179

Te Kowhai/Pukete/Queenwood $198

*Much greater number of older bedsit type accommodation

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ATTACHMENT 6 Social Housing Glossary of Terms & Roles and Responsibilities

Terms Definition

Accommodation Supplement (AS)

The AS is a weekly payment that assists families and individuals with costs towards their rent, board or owning a home. This is means tested and available to both beneficiaries and non beneficiaries.

Community Housing Provider (CHP)

CHP means a housing provider (other than HNZC and a local authority) that has, as one of its objects, the provision of social or affordable rental housing.

Class 1 registration.

Class 1 registration allows for CHP’s to enter into a contract with MSD to access IRRS.

Housing New Zealand (HNZ) or HNZC (Corporation)

HNZ is the government housing agency and currently manages all state owned residential tenancies. It houses those most in need for the period of that need.

Income Related Rent Subsidy (IRRS) The IRRS is a subsidy available to class one registered community housing providers who have entered into a contract with MSD committing to house high need clients ( assessed as A or B under the social allocation system).

Income Related Rent (IRR)

IRR is the subsidy that was administered by HNZC where all HNZ tenants were assessed on an individual basis and charged and income related rent. This has been superseded by the IRRS.

Ministry of Business, Innovation and Employment (MBIE)

MBIE came into existence on 1 July 2012. It integrates the functions of the former Department of Building and Housing, Ministry of Economic Development, Department of Labour and the Ministry of Science and Innovation. It is the regulatory authority for community housing provision and will set performance standards and manage any non compliance.

Ministry of Social Development (MSD)

The MSD has a contractual relationship with Class 1 CHP’s for the purpose of accessing eligibility for IRRS. The ministry has a triage role in processing and assessing applicants for HNZ and class 1 registered CHP’s housing.

Social Housing Unit (SHU) The SHU is a semi autonomous body with MBIE. Its purpose is to increase the supply of social and affordable housing in NZ by working with organisations (including funding of) that will deliver significant growth in the social and affordable housing arena.

Social Allocation System (SAS) The SAS is the process used to determine housing priority. SAS has been transferred from HNZ to MSD. There are five categories under SAS : Affordability – income over likely rent in the private sector. 1 - 4 ratio Adequacy – does the current accommodation meet the council standard? Can only be a 1 or a 4 Suitability - measures overcrowding against a health standard. 1 - 4 depending on level Accessibility – covers barriers to accessing the private market like bad tenancy record, discrimination, 1 - 4 Sustainability – covers why they cannot stay where they are includes but not limited to, eviction, disability access, rising debt and other social issues. 1 - 4. This is the most subjective of the

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categories. To be an ‘A’ you would need a 4 supported by a 3 and be ‘at risk’ within 7 days. To maintain a ‘B’ you would have to have a least one 3 supported by a 2.

Roles and responsibilities

The Ministry of Social Development, Housing New Zealand and registered community housing

providers are responsible for the following functions under the new Social Housing Reforms:

Ministry of Social Development Housing New Zealand and Community

Housing Providers

Managing all social housing applications, including:

assessing eligibility

assessing a person’s need for a house

managing the housing waitlist

supporting people with a serious housing need who can’t be referred immediately to a housing provider

helping people find the right housing option for their situation

calculating and reviewing income-related rent

referring people to approved social housing providers

paying income-related rent subsidies to housing providers

fraud investigations and legal actions

recovery of debt from underpaid income-related rent

reviewing decisions on eligibility, needs assessments and income-related rent

tenancy reviews.

Tenancy management including:

matching prospective tenants to houses

starting and ending tenancies

preparing and managing tenant agreements

tenant liaison and landlord duties

charging rent (based on income-related rent or market rent as appropriate)

tenant transfer

collecting rents, debt for overdue rents and damage charges.

Buying, selling and developing properties.

Management and maintenance of houses

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ATTACHMENT 7 Allocation of Social Housing

All clients that are assessed and meet the eligibility criteria and who are placed on the social housing waitlist for social housing are referred to the Centralised Unit Housing (CUH) that is managed by the Ministry of Social Development. The CUH will contact those on the waiting list every 10 or 30 days depending on their priority rating (The priority rating is based on their individual needs assessment completed by the Case Manager Housing) to provide an update on the social housing availability. A client can only be placed into social housing if they are assessed and meet the eligibility criteria. There are however social housing providers that will take self referrals, however these providers may not have accreditation from the SHU, and therefore will not be able to access the Income Related Rent, or Income Related Rent Subsidy. In those situations the tenant will still be eligible for the Accommodation Supplement (AS). Housing New Zealand allocate housing based on the match of the client’s needs and the availability of an appropriate vacant property that matches their needs. Community Housing Providers (CHPs) operate slightly differently, as the CHP will advise the CUH when they have a property available to rent, and the Ministry of Social Development will provide a client to match the available property. Some of the CHPs have preferred tenants (ie mental health, or people with health and disability issues); therefore the Centralised Unit Housing will provide a list of potential tenants directly to the CHP from the waitlist. The Community Housing Provider then arranges to meet the prospective tenant and if successful, the tenancy is confirmed and the Centralised Unit Housing then arranges the Income Related Rent (IRR) and Income Related Rental Subsidy (IRRS). Social Housing Waitlist The social housing waitlist is people waiting for Housing New Zealand and other social housing provider properties at a given point in time. The number of people on the waitlist and their priority rating is subject to change, as people come on and off the waitlist and as their circumstances change.

The social housing waitlist includes people assessed as eligible for social housing who are ready to be matched to a suitable property (housing register). It also includes tenants currently in social housing that have requested a transfer to another social housing property in a different location or because there is a change in the number of bedrooms they require (transfer register).

The housing waitlist will be published on a quarterly basis. Waitlist numbers will be reported by priority (A or B), by region (territorial local authority or local board for Auckland) and by the number of bedrooms applicants are assessed as requiring.

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Terms and definitions

Priority A clients People considered ‘at risk’ and include households with a severe and persistent housing need that must be addressed immediately. The household is unable to access and/or sustain suitable, adequate and affordable alternative housing.

Priority B clients: People who have a ‘serious housing need’ and include households with a significant and persistent need. The household is unable to access and/or sustain suitable, adequate and affordable alternative housing.

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ATTACHMENT 8 Hamilton Aging Population Growth Recent data from the 2014 Review of Demographic and Labour Force Projections for the Waikato Region for the Period 2013 - 206314 illustrates the significant growth in the number of older persons. Demographic make up implications from the information presented are:

There is projected to be a significant increase in the number and proportion of older persons in the future

There is over 130% increase in the number of 65+ year by 2033 (from 18,776 in 2013 to 43,567 in 2033)

There will be greater numbers and proportions older people that need to be supported in the future. – Dependency ratio becomes more challenging over time

Likely that more services are required for older people as they will make up an increased proportion of future population

Likely to greater demand for more localised provision of services and pressure on contracting catchment sizes for some public services

Maori and Asian populations are growing fast

There will be more people dying as the population ages By 2033, 21.4 per cent of Hamilton City’s population is projected to be aged 65+ years, up from 11.3 per cent in 2013 (Figure 3.9 and Table 3.6) (medium projections). By 2063 the proportion is projected to reach 33 per cent. Across the projection period the 65+ year age group shifts from contributing the lowest number per age group, to the highest (Table 3.6) (see Appendix D.2).

Figure 3.9: Age-sex structure (percentage at each age), 2013 and 2033, Hamilton City, medium projections

14

Jackson, N.O., Cameron, M and Cochrane, B. (2014)

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Table 3.6 also shows that the ratio of those aged 65+ years to those aged 0-14 years will increase from 0.53 (53 elderly per 100 children) in 2013 to around 1.34 in 2033, and 2.58 (258 elderly per 100 children) by 2063 – Hamilton City ageing somewhat faster than the Waikato District.

Table 3.6: Projected medium baseline numbers and change by broad age group, Hamilton

City

Between 2013 and 2033, numbers aged 0-14 years are projected to decline by 1,029, and numbers aged 65+ years to increase by 24,106. However, it is the period 2033 to 2063 where the contribution to growth at 65+ years is most significant, offsetting decline at both 0-14 and 15-39 years. The contribution to growth at 40-64 years is positive across both periods but declines from 46.1 per cent (2013 to 2033) to just 11 per cent (2034-2063), whilst at 65+ years the contribution doubles. The contribution to growth at 85+ years is again remarkable, with numbers increasing by 685 between 2013 and 2033, accounting for 1.6 per cent of growth, and by 6,059 between 2034 and 2063, accounting for 19.8 per cent of growth.