17 Oct 2016

Christchurch social housing rents to rise

7:59 am on 17 October 2016

Higher rents are on the way for some tenants of Christchurch's new social housing provider after the council handed over 2300 properties.

A state house in Northcote

Photo: RNZ / Claire Eastham-Farrelly

The hike applies to new tenants and comes as the council's 2300 homes are put under the management of a charitable trust.

Currently council tenants are charged just over half what they would pay for a private rental.

While things will not change for the current tenants, new tenants will be asked to pay 70 percent of the current market rate - meaning a unit going for $220 a week at present would increase to $280 a week.

New tenants who qualified for the government's income related rent subsidy, reserved for those on the very lowest incomes, would avoid the rent hike.

The council set up the trust so it could access the subsidy, something the government was unwilling to pay to the council directly.

The subsidy would only be available to the higher-paying new tenants - meaning the trust would receive more income from them, via the subsidy, than it did from its existing tenants.

St John of God Hauora Trust regional manager Sarah Hillier

St John of God Hauora Trust regional manager Sarah Hillier Photo: RNZ / Conan Young

Regional manager Sarah Hillier at social agency St John of God Hauora Trust said many people were already struggling to get by. Rents in the city were already too high and she did not want to see council housing go the same way.

"I think any increase would start to put a strain on. We see a lot of people already struggling to provide the basic needs for themselves and their children."

She said social agencies should not be using market rents as a benchmark when they are way beyond what many can afford.

"So what would be further compromised is the fact that our young people don't visit the doctors for themselves. The food they eat is also a challenge."

The young people her agency helped were in particular need of affordable council housing, she said.

"They tend to live more in, sort of, overcrowded situations as opposed to going off and renting properties - or live in garages with strips of insulation at the bottom of the garage, because it's quite a big space for them to be in.

"But it's cold and there's no access, often, to bathroom facilities."

The trust, which began operating two weeks ago, had yet to take on any new tenants.

One of its current tenants, Nafisa Ahmadzadah, shares a two-bedroom unit with her husband and young daughter.

Despite her husband having a job, she said the $200 they paid each week was as much as they could afford.

"There won't be any [money] left once we pay the rent, the bills and everything ... we can barely manage."

Another two-bedroom council flat is home to Kamila Abdurhman her husband and their two young children.

"We can't afford more than $220 [per week]."

Ms Abdurhman, said with high prices in the private rental market, they had nowhere else to go.

"It will be expensive for us because it's only my husband working and we have two kids and I'm studying and have to pay for my study."

The chief executive of the newly established Ōtautahi Community Housing Trust, Cate Kearney, said the $60-a-week increase was still lower than what others were charging.

"We have worked with Community Housing Aotearoa and their advice and other people's advice is that we're coming in lower than what other social housing landlords might use as an estimate."

Ōtautahi Community Housing Trust chief executive Cate Kearney.

Ōtautahi Community Housing Trust chief executive Cate Kearney. Photo: RNZ / Conan Young

Ms Kearney said there would be no effort to move on its current tenants.

"That's not at all the purpose of the trust being established and our aim and working with our tenants," she said.

"So we would hope that the tenants that we have had pass over to us from city council will be happy with us as their landlord - and as vacancies come up, we'll then look at new tenants."

Labour housing spokesperson Phil Twyford said that because the government's subsidy would only be available to new council tenants it would do little to help fund the building of much-needed social housing in Christchurch.

"National's hell-bent on selling off state houses. They've basically sent a signal to councils that it's not councils' job to be providing housing.

"We think that's really retrograde. The government needs to do more in terms of providing decent affordable housing, councils need to do more, and the community needs to do more."

Ōtautahi Community Housing Trust is due to be registered as a community housing provider on 21 October, at which point new tenants would be eligible for the income-related rent subsidy.

Get the new RNZ app

for ad-free news and current affairs