The Christchurch City Council has agreed to lend $25 million dollars to the Ōtautahi Community Housing Trust to build 85 new social housing units.
The loan will be rates-neutral, meaning it won’t require any rates funding, and the units could expect to be tenanted in 12 to 18 months.
Chief Executive of OCHT Cate Kearney said the trust was really pleased.
“What this means is the council are backing us to get quality housing for people who are really in need.”
Kearney said OCHT had the land and was “keen to build as many homes as we can”.
Council gave $30 million to the trust last year, and the money was used to build four complexes, two which are completed and a third due to be completed in June.
Christchurch Mayor, Lianne Dalziel, supported the loan saying it was ‘'vital that we unlock the door for OCHT to do the job they have proved so capable of doing’'.
Likewise, Deputy Mayor Andrew Turner said it was “an opportunity to make a significant social and economic impact, keep construction companies in business and provide jobs”.
However, it was also revealed that the loan would bring the council’s debt to its ceiling.
The council's current net debt ratio was 250%, and the loan to OCHT would bring it to 240%, leaving only $65 million left for the future.
General Manager of Finance and Commercial, Carol Bellette, said it left her with ‘'significant concerns’'.
“Sitting at 240% or higher is not a financially prudent position to be sitting in. We can’t access Government agency funds if we’re above that limit.”
Councillor Aaron Keown echoed the concern saying “I am very concerned about our headroom. There will be something around the corner”.
One of the greatest impacts on the debt was the upcoming stadium build, due to start next year, with Councillor Melanie Coker noting it was effectively ‘'stadium vs. social housing'’.
Council has allocated $253 million to the stadium, according to Christchurch NZ.
However more than 400 council units were lost in the Christchurch earthquakes, and according to the housing register, at the end of last year 910 people were eligible and waiting for social housing in Canterbury.
Head of Facilities, Property and Planning Bruce Rendall said it produced a “no-cost solution to ratepayers and gets some jobs going”.
Former mayoral candidate, John Minto, who advocated strongly for social housing during his mayoral candidate, said he was delighted council had finally made the commitment.
“They should have re-built social housing 10 years ago. It’s a disgrace that it’s been left this late. I’m pleased that the pressure myself and others were able to bring on the election campaign has meant we’re in this position now”.
The units will be built to a 6-star standard and cost around $272,000 each.