15 Aug 2017

Iwi in running for Auckland affordable housing land

10:14 am on 15 August 2017

A contentious deal over Auckland Council-owned affordable housing land has been widened to include four possible buyers, after a spat over the price.

A state house in Northcote

Photo: RNZ / Claire Eastham-Farrelly

The New Zealand Housing Foundation, the country's biggest community housing developer, had been about to start on the $140 million project in Wiri, when it complained the asking price for the council-owned land was too high.

The foundation was proposing to build 290 homes at the 5.1ha site in Barrowcliffe Place, including a mix of rental, market, and assisted first-home-buyer dwellings, for a consortium it led.

Neither the foundation nor the council's development agency, Panuku, will comment on progress, after the pair spent eight months in negotiation.

Auckland mayor Phil Goff said Panuku was now also talking to three iwi groups who were potential buyers.

"I think the four potential buyers came about because the conglomerate of buyers at the beginning decided they each wanted to put separate bids in," said Mr Goff.

The mayor was guarded on whether the sales process to date had gone well.

"I think that both Panuku and the housing provider will look back on their experience in this regard, and say there are better ways of doing this."

There appeared to have been considerable tension, after suggestions that Panuku had significantly raised the asking price.

Phil Goff

Auckland mayor Phil Goff Photo: RNZ / Claire Eastham-Farrelly

Panuku Development Auckland is a council-owned company, operating at arm's length from politicians selling surplus council land and undertaking urban regeneration projects.

Ironically, at the same time that the initial deal was stalling, both Panuku and the Housing Foundation were taking part in the Mayoral Taskforce on Housing.

Mr Goff said he was confident the sale process was now going well, and with the agency set up at arm's length from politicians, it would be wrong for councillors to get involved in questions of price.

"What we are saying to Panuku is, here are the strategic objectives, but it's not right that council-elected representatives will get down into the detail of those negotiations," said Mr Goff.

The Housing Foundation told RNZ in June that the asking price for the site had swung in a range between an earlier valuation of $8m and a new market price valuation of $24m, for land inherited from the former Manukau City Council.

Panuku had begun talks in September last year with the Housing Foundation, and the pair subsequently signed an initial agreement about their roles leading up to a sale.

'We don't balance the budget simply by selling off the family silver'

When asked about progress since the June rift, Panuku referred RNZ to councillor Chris Darby, who chairs the planning committee to which the agency reports.

Mr Darby said the agency would settle on a price that did allow the affordable housing the council wanted.

"There is a discount involved to achieve that strategic outcome of affordability, the great design etc, but ultimately a fair value will be arrived at. Our ratepayers also expect that to be important as well," Mr Darby said.

Manukau ward councillor Daniel Newman, in whose patch the development lies, has also been in discussion with Panuku about Barrowcliffe Place since the public comments.

Mr Newman said the political message to Panuku had not been clear, with the council too focused on how much it could gain from Panuku selling land.

"We don't balance the budget simply by selling off the family silver. There are other tools available and also the opportunity to cut our cloth if we can't achieve the revenue targets that we require," he said.

Panuku revealed its plans to rejuvenate central Manukau, including Barrowcliffe Place in December 2015. It's not clear when a deal over the residential land will be finalised.

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