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A new way forward for affordable and Social Housing in Nelson: Nelson City Council

A proposal to sell Council-owned land to Kāinga Ora has the potential to create 175 affordable and social homes for Nelson.

Pending agreement at a full Council meeting on Thursday 26 August, Nelson City Council will consult the public on a proposal to sell council-owned land in the city centre to Kāinga Ora to provide a potential 175 new homes in a high-quality affordable and social housing development.

The development, if it goes ahead, will be one of the largest mixed-use developments outside of Auckland, Wellington and Christchurch.

The consultation will seek the community’s views on the sale of 69 to 101 Achillies Ave and 42 Rutherford Street. Less than 50% of the 175 properties will be social housing, with the remainder providing affordable housing. The ground floor of the buildings will be set aside for commercial or community activities.

If, following community feedback, Council decides to sell the land, Kāinga Ora will then complete its due diligence process before it finalises the purchase of the property.

Nelson Mayor Rachel Reese says Council consulted on housing and intensification as a priority in the 2021-31 Long Term Plan. This included a plan to partner with central government to support intensification and an increase in the supply of housing.

“Hundreds of submissions to our Long Term Plan 2021/31 supported housing as a priority and this is an important step toward achieving that goal.”

Based on 2020 data, house prices in Nelson have risen 88% in the last five years, and rents have increased by more than 30% over that same time frame.

The average Nelsonian spends about 38% of their household income on their rent or their mortgage. That percentage is higher than the income to housing costs ratio in Auckland.

“The knock-on effect is that we are getting to a point where our businesses want to grow, but they can’t attract skilled staff or even retain skilled staff in this region because of the cost and supply issues with housing,” says Mayor Reese.

“Kāinga Ora are well placed to provide the affordable housing Nelson requires and they are keen to partner with us. The economies of scale that they can bring to the table are important in an economy where construction costs are rising rapidly.”

Kāinga Ora owns and manages about 1,620 state homes in the Nelson and Tasman areas.

Regional Director Kāinga Ora Julia Campbell says her organisation is committed to providing more homes of a variety of types in Nelson and across the region.

“Our partnership with Nelson City Council forms part of that work, and we’re thrilled to be working with them to look at providing housing solutions that meet the needs of the community.”

Should the sale go ahead, Campbell says Kāinga Ora would engage with local stakeholders and the community to keep them well-informed throughout the course of any development.

Specific designs and concepts would be created once the sale was approved, but “any development partnership between Kāinga Ora and the Nelson City Council will seek to provide features that enhance and give back to the community”.

Mayor Reese says the proposed development would bring a lot of benefits to Nelson’s city centre.

“By increasing the number of people who live in or close to our city centre, we not only ease the affordability crisis, but also bring people closer to the services they regularly use and their workplace.”

Council’s preferred option is to sell the properties to Kāinga Ora at market value, and proceeds from the sale of the properties would be used to pay down debt. However, the consultation also outlines other options, such as selling the land on the open market or retaining the land.

How to take part in the consultation:

Consultation will open on 30 August, 2021. To provide feedback you can either visit: shape.nelson.govt.nz/kainga-ora-consultation from 30 August, or pick up a hard copy of the consultation document at Council’s Customer Service Centre and public libraries.

Consultation on Te Ara ō Whakatū will also open on 30 August, 2021. Council will publicise more details on this consultation shortly.

Background information

Housing in Nelson

  • Nelson is currently experiencing high demand for housing, including inner city living. Nelson is also experiencing unprecedented housing unaffordability and increasing need for housing assistance.
  • Although Nelson rent and house prices are slightly lower than national medians (4.7% and 2.4% respectively), household incomes (recorded for Nelson) are 17% below the national median. This results in a higher level of unaffordability for both renters and property purchasers.
  • Analysis of available household income data from the 2018 census and residential house sales suggests that most households who don’t own a home are not able to purchase a house in Nelson, even at the lower quartile price point. 40% of renters in Nelson are expected to find servicing a loan prohibitive due to their income only being enough, or in some cases not enough, to cover the cost of day to day living expenses. These Nelsonians are likely to be lifetime renters, without any intervention to create affordable housing.
  • Although not official statistics, according to a 2018 research report[1], more people, per 10,000 people, were also living in temporary accommodation in Nelson than anywhere else in New Zealand.
  • A growing number of people continue to register for public(social) housing support. At March 2021, 264 people in Nelson were registered on the Social Housing Register[2], most of those assessed as priority A (applicants who are considered at risk and includes households with a severe and persistent housing need that must be addressed immediately).
  • This is up from 171 people in March 2020 and 139 people in March 2019. The Register also reports that the majority of those who are listed require a one-bedroom dwelling.

Frequently Asked Questions:

Who is Kāinga Ora?

Kāinga Ora – Homes and Communities is a Crown agency that brings together the people, capabilities and resources of KiwiBuild, Housing New Zealand, and its development subsidiary HLC. Kāinga Ora was formed on 1 October 2019 and has two key roles: being a world-class public housing landlord and working in partnership to enable, facilitate and build urban development projects of all sizes.

What is affordable housing?

There is no universal definition of affordable housing, however in the case of this proposal, affordable housing is housing, including social housing, that is appropriate for the needs of: very low, low and moderate-income households in Nelson.

Common housing types and terms:

Public (social) housing – Housing provided to an individual or a family who is eligible for the income-related rent subsidy (IRRS), for as long as they need it.

State housing – Is a type of public housing. This is provided by Kāinga Ora, with dedicated staff who look after its state housing customers and the homes they live in.

Affordable rental – Long-term rental accommodation, provided at discounted rents. Currently, Kāinga Ora only provides rental accommodation to people eligible for IRRS (public housing), or who were eligible for IRRS when they first rented the home.

Market affordable homes – Homes produced to sell at KiwiBuild price points or other affordable housing products. Includes land sold to builders with a requirement to build affordable housing within a set timeframe.

IRRS – The income-related rent subsidy (IRRS), where the Ministry of Social Development helps pay a portion of the tenant’s rental payment.

How many residential units will be created?

Preliminary planning has earmarked potentially 175 homes across both sites. However, it is important to remember that Kāinga Ora has not made any commitment to purchase either of the properties. The Nelson City Council consultation process must first take place to help Council understand community views about whether or not to sell either property. If the decision is made to sell, Kāinga Ora would then need to complete due diligence to determine whether the sites are suitable for a housing development, before deciding whether to purchase the properties. The final terms of any sale would then come back to Council for approval.

If Kāinga Ora was to purchase the properties, it would then begin planning the development, working up designs and establishing timeframes for construction. Should any development proceed, Kāinga Ora has advised Council that it would engage with stakeholders and the community to keep people well-informed throughout the design and construction process.

How many of those will be for social housing?

It is too soon to provide a specific breakdown of what could be built on the site should Council decide to sell the properties and Kāinga Ora purchase them after completing due diligence. Kāinga Ora would look to provide a mixture of both social and affordable housing options. Kāinga Ora has agreed that if any development were to go ahead, less than 50 per cent of the development would be for social housing. The remainder could be made up of one or more of a range of housing types, based on the needs of the community, and this would be determined through the planning stages.

Who will live in the social housing units?

It is too early to say who will live in these homes. However, it is important to remember Kāinga Ora customers are already our neighbours, their children attend our schools and they are members of our sports teams and already contribute to our communities.

Of crucial importance to the well-being of Kāinga Ora customers and our communities is the process of matching customers with homes. By making sure any new home is the best fit for any customer – and by providing continued support once they are in their home – Kāinga Ora can support them to live well in their home and community.

Who will live in the affordable housing units?

It is too early to say who will live in these homes. Kāinga Ora will be looking to partner with local housing providers and iwi.

How much will the Council properties be sold for?

Should Council decide to sell the properties to Kāinga Ora, Council will be seeking a market value.

What will Council do with the sales money?

Council will use any proceeds from any sale of the properties to pay down debt.

What happens to existing tenants of those sites?

Should Council decide to sell the sites, we will work with our tenants to provide support through the process.

 When will Kāinga Ora start building, and when will the buildings be complete?

Kāinga Ora has not made any commitment to purchase either of the properties. The Council public feedback process must first take place to assist the Council’s decision on whether or not to sell either property. If the decision is made to sell, Kāinga Ora would then need to complete due diligence to determine whether the sites are suitable for a housing development, before deciding whether to purchase the properties.

Providing more homes to meet the needs of the Nelson region is a priority for Kāinga Ora. If Kāinga Ora was to purchase the properties, it would begin planning the development, working up designs and establishing timeframes for construction. Should any development proceed, Kāinga Ora would engage with stakeholders and the community to keep people well-informed throughout the design and construction processes.

There are currently 12 leased carparks and 24 carpool parks, located on the site at 69 to 101 Achilles Avenue.  What will happen to these?

The 12 leased car parks would be removed and replaced with housing.  Leasing carparks is not a particularly efficient use of city centre land.  The future location of the carpooling will be determined under the Parking Strategy.

Where will the residents park?

The Council is no longer able to require on site carparking in any area of the city due to Government direction in the National Policy Statement on Urban Development (NPS UD).  The Nelson City Council Residents Parking scheme does not allow permits for City Centre residents. The development sites are in a central city location that is supported by a network of active transport connections, and public transport. Significant investment is allocated for the city centre to improve safety and efficiency of active transport and the public transport network from 2023, prior to the expected completion time of this development.

Kāinga Ora will assess the car parking demand for the development. While there is no specific design for the sites yet, they intend to provide some car park spaces for the Achilles’ Avenue site, but not for all residential units.  The housing development on 42 Rutherford Street will likely be a carparking free development. Both development sites will include secure covered provision for bikes and micro-mobility devices. Affordable housing necessitates that valuable land for housing cannot feasibly be dedicated to parking spaces for all units.

What about flooding?

The site is located within the river flood and coastal inundation area.  Any design for development on the sites will need to meet Council and Government requirements for minimum ground and floor levels.

 What will the buildings look like?

Examples of Kāinga Ora developments of all sizes and types can be found on its website. Links to some significant developments can be found by following these links:

https://kaingaora.govt.nz/developments-and-programmes/what-were-building/greys-ave/

https://kaingaora.govt.nz/developments-and-programmes/what-were-building/mount-cook-wellington/

While it is too early to discuss specific designs and concepts, any development partnership between Kāinga Ora and the Nelson City Council will seek to enhance the attractiveness of the city.

As shown in the May 2021 Housing Dashboard, published on the Ministry of Housing and Urban Development website, more than 2,600 Kāinga Ora homes are currently under construction across New Zealand. This figure does not include the thousands more in consenting, procurement and feasibility stages, and the number is constantly changing as projects are completed and others begin.

Kāinga Ora does not just build public (state) housing. The above figure includes affordable homes for sale, and Kāinga Ora is constantly looking at opportunities to meet the demand for more housing all across New Zealand.

What will be on the ground floor?

Planning would not begin until after any property purchase, but the Council has rules around what can operate on a ground floor in the central city. Residential living is not permitted, so spaces generally comprise commercial, office space or community facilities in these locations. Any Kāinga Ora development in the city centre would require careful consideration around the inclusion and placement of non-residential activities, including communal open spaces. While the exact nature of these activities is to be determined, the proposals would reflect the central city environment and matters such as servicing, access and planned upgrades to surrounding streets. In addition to the more commercial activities, Kāinga Ora would consider incorporating some flexible community spaces, facilities for its staff, customers, and community partners.

Kāinga Ora Design Statement

 Nelson CBD Sites: Design Statement

In collaboration with the Nelson City Council, Kāinga Ora has developed high-level concepts for two exciting development opportunities in central Nelson. These projects present an opportunity to deliver a total of about 175 homes for people with a range of housing needs, along with the potential for a range of community spaces and commercial uses.

Due to the wide-ranging needs of the community, Kāinga Ora has opted for a mixed-use concept which caters to each site and its surrounding area. Should either proposal go ahead, any development would create high-quality, mixed-use residential environments that have sustainability and community wellbeing at the forefront.

It should be noted, however, that Kāinga Ora is yet to make any final decisions surrounding the purchase of either site. Should the Nelson City Council opt to sell the land to Kāinga Ora following consultation, Kāinga Ora would still need to complete important due diligence work before making any final purchase decisions. For this reason, any figures and features included in this document are, at this stage, indicative only.

Mixed housing types

These developments would be an asset to both the central city and wider area, providing a range of housing options at a density and scale while reflecting with the existing character of the community. While further work is required to develop the site design and housing mix, any development would incorporate a mix of types, from one- through to three-bedroom homes. Kāinga Ora would also seek to provide social and affordable housing, to meet the wide-ranging housing needs of Nelson residents. Kāinga Ora anticipates it would build about 125 homes at the Achilles Avenue site and about 50 on Rutherford Street.

Should they go ahead, these developments would provide a unique living environment that would be well-integrated into the surrounding area, contributing to the vitality of the central city while aligning with the aspirations of Nelsons City Centre Spatial Plan. Given the unique nature and location of the sites, an emphasis would be placed on ensuring the proposed buildings were appropriate in scale, form and appearance. The sites present a significant opportunity to create landmark buildings that could range from five to eight storeys. The concepts would be created with environmental conditions and neighbouring properties in mind, particularly with respect to ensuring surrounding streets benefit from a good level of sunlight, and differences in floor-level heights between the street and buildings are well managed.

Communal spaces

Careful consideration will be given to the inclusion and placement of non-residential activities within the proposals, including communal open spaces. While the exact nature of these activities is to be determined, the proposals will reflect the central city environment and matters such as servicing, access and planned upgrades to surrounding streets. In addition to the more commercial activities, it is also proposed that Kāinga Ora would incorporate some flexible community spaces and potential facilities for its staff, customers and community partners.

Kāinga Ora has already begun giving consideration to a number of other features that would continue to be a key part of any planning, should any development proceed. Some of these include minimising on site car parking, creating a highly-accessible living environment, managing the impact of increased floor-levelheights, allowing for a range of amenity spaces and integrating a broad array of sustainability and wellbeing initiatives into the development.

 [1] Amore, K., & Howden-Chapman, P. (2020). Severe housing deprivation in Aotearoa New Zealand, 2018. Wellington: University of Otago. Retrieved April 7, 2021, from https://www.hud.govt.nz/assets/News-and-Resources/Statistics-and-Research/2018-Severe-housing-deprivation-estimate/Severe-Housing-Deprivation- 2018-Estimate-Report.pdf

[2] https://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/housing/index.html#LatestresultsndashnbspDecember20201

 

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