Affordable housing gets a boost
December 2 2019 by Julie Scott, Executive Officer Queenstown Lakes Co
Affordable housing gets a boost. Around a year ago I wrote an article for the LWB noting we were developing our new assisted ownership programme, Secure Home. I’m pleased to report we successfully launched this new housing model in February, and now have six happy households occupying their new homes in Shotover Country.
These new homeowners bought into their properties at the cost of house construction, with prices ranging from $320k to $400k. They then signed up to a 100 year lease with ground rent set at 1.5% of market value (averaging $84 per week). This rent is adjusted annually with inflation (CPI) for the term of their lease. When they want to sell, they must sell back to the Trust at original price plus CPI for the period they have been in the property. Any agreed improvements they have made during that time are also factored into the resale price.
We will then on sell the home to the next household on our waiting list at the same price we just bought it back for, with a new 100 year lease put in place. Thus affordability is maintained in perpetuity for the first, as well as subsequent households.
Through linking the cost of the home and the ongoing ground rent to inflation, rather than market land values, creates a secondary market – one controlled by a not-for-profit Trust and not subject to the volatility of the open market. It gives the households certainty of their outgoings and provides a stepping stone to independence over time. Essentially households get all the privileges of home ownership except the ability to make large capital gains. It’s a nest – not a nest egg.
A highlight for us this year was Council resolving to transfer a large piece of land in Arrowtown across to the Trust at nil cost. This was a real milestone and demonstrates Council’s commitment to the issue of housing affordability in the district. We expect to build around 70 units on this site and have the unique benefit of being able to create a comprehensive development from scratch.
During the course of the last 12 months we signed agreements with several developers, where they committed to provide up to 12.5% of their sections to the Trust as part of their Special Housing Area requirements with Council. This will go some way towards our big, hairy, audacious goal of 1000 homes by 2028!
As at today we have 580 households on our waiting list, made up of 919 adults and 575 children. So we have no shortage of local singles, couples and families seeking housing assistance. Our greatest challenge is to scale up the Trust to help them all.
Queenstown Lakes Community Housing Trust