Community Housing Rents to Rise
Published on 06 September 2023
Tenants in Waitaki District Council-owned community housing units will see rent increases from November.
Council owns 90 units in Palmerston, Hampden and Ōamaru. The new weekly rents will range from $145 for a bedsit in Dacre Street to $229 for a one-bedroom unit in the popular Reed Street complex. The Council will charge the new rents at 85% of the market rent, assessed in the 2022/23 fiscal year. Most community housing tenants qualify for accommodation supplement from the Ministry of Social Development (MSD) to help pay rent.
The adjustment to rents is necessary to create equity of rent charged across the community housing units in the Waitaki District. Lower than average rents in the past could have inhibited the development of much needed affordable and social housing in the district.
Tenants housed within the last year are already renting at 75% - 80% of market valuation and rent increases will take place on their 12-month anniversary of assuming tenancy. Longer-term tenants will see larger rises having paid lower than average rents in the past.
Council has been working with MSD and will hold three Drop-In Sessions for tenants at Community Housing complexes in Ōamaru and Palmerston, following notification of the new amount.
Setting rents at 85% of market value will reduce the need to subsidise community housing through rates, and offset escalations in costs, in line with council policy. It will also enable Council to continue to invest in the properties and ensure they meet modern standards desirable for our tenants.
Rental income from the units will reach $980,000 with all units occupied. Depreciation, rates, and insurance for the 90 units costs $883,000 per year, without including property management and general maintenance costs.
On the new rent amounts Chief Executive Alex Parmley said, “Rent increases are not something we take pleasure in. It is necessary so we can maintain and improve the properties and ensure a quality of life for current and future tenants.”
Council will be making small annual increases from 2024 and aligning rents to 85% of market valuation every few years. Property owners, including Council, are required to notify tenants 60 days before any rent increase, and rents can only be increased once in every 12-month period.