$1m a year for cheap city homes

Plans by the Auckland City Council to spend $1 million a year on social housing are receiving a mixed response from ratepayers and business groups who believe housing should be left to the Government.

"I would suggest that the council seriously consider staying out of the housing business and make sure that new developments in this area are of high quality, not urban slums for the next decades," Glendowie resident Mrs Dawn Garbett said in a submission on the council's budget.

After the John Banks-led council sold all the city's pensioner and social housing for $83 million, the City Vision-Labour-led council is implementing an election promise to increase the stock of affordable housing in Auckland.

The council plans to spend $1 million a year in partnership with Housing New Zealand and housing groups. It has no plans to own or administer rental property but it could provide loans to housing groups and carry some of the development risk.

The housing plan has been panned by business groups, including the Auckland Chamber of Commerce, Heart of the City and the Employers and Manufacturers Association, which believe housing is the responsibility of central Government.

Chamber of Commerce chief executive Michael Barnett said the worst thing the council could do was to bring back social services that duplicated existing Government programmes, while Heart of the City chief executive Alex Swney said the level of housing assistance was a "drop in the bucket relative to the size of the problem".

Many ratepayers also oppose the plans, although others, such as Michael Tritt, of Mt Eden, support new community housing initiatives.

Housing Lobby spokeswoman Sue Henry said: "Housing is not a core service of council. It is a responsibility of Government. End of story."

But other social agencies, including Housing NZ, Just Housing Trust and the Auckland District Council of Social Services, are backing the plan.

The council of social services wants Auckland City to change the zoning rules to set aside areas of affordable housing in major developments.

Deputy Mayor and City Vision leader Dr Bruce Hucker said $1 million from the council could translate into a $9 million capital investment in a joint venture with Housing NZ or public and private sector housing groups, making a "real difference" to increasing the stock of affordable housing.

Citizens & Ratepayers Now leader Scott Milne said the $1 million could be tied up for 15 years to pay the interest on a $9 million housing loan.

Meanwhile, C & R Now failed yesterday to get officers to do a comparison of Auckland's proposed 9.7 per cent rates increase with the rates increases of other major cities. The report will be done for next year's budget-setting meeting in September.

"Hundreds of people have contacted the council vehemently objecting to the massive rates increase proposed," Mr Milne said. "When we asked for the comparison the mayor and the Labour left simply stuck their heads in the sand and said it was too hard to get the information within two weeks when the council finalises its annual plan."

Housing plans

* $1 million a year to increase affordable housing in the city.

* Developing partnerships with Housing New Zealand and housing groups.

* Possible use of council land.

* Possible loans to housing groups or carrying some development risk.

* No plans to own or administer pensioner or rental housing.