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Lucky modest-income earners will be able to buy their first homes for only three-quarters of their values under a new scheme to be funded by Auckland City ratepayers.
The city council's affordable housing scheme, detailed for the first time yesterday, will allow families earning household incomes of $50,000 to $90,000 a year to share ownership of their houses with the New Zealand Housing Foundation.
The first seven two-storey houses, including some of three, four and five bedrooms to accommodate large families, will be built on the corner of Denny Ave and William Blofield Ave in Mt Roskill.
The council will invest $9 million to help fund the Housing Foundation's share of a total of 100 houses across Auckland in the next five years to help modest income earners into the city's overheated housing market.
The controversial plan, originally signalled in the current council's first annual plan after the 2004 council elections, has come to fruition just a week before the voting papers for this year's council elections go out next Friday.
Former mayor John Banks, who is seeking to win his old job back from incumbent Dick Hubbard, said in yesterday's Herald that he would scrap the scheme if elected.
The chair of the council's community development and equity committee, Cathy Casey, said yesterday that the scheme would be "a drop in the ocean." Estimates are that there will be an extra 93,000 households in the 10 years to 2016.
But she said it was "a demonstration project" which would show it was feasible to build affordable housing in the city.
The Housing Foundation, initiated by a $1 million-plus investment by Warehouse founder Stephen Tindall's Tindall Foundation, has already built a handful of houses in Manukau on a "rent-to-buy" basis where buyers pay rent for five years, then get the increased market value of the house as a free deposit on buying the house.
It is also developing 70 houses in West Coast Rd, Glen Eden, which will be offered on either a "rent-to-buy" or the "shared ownership" basis being promoted in Auckland City.
Foundation director Brian Donnelly said shared ownership was proving more popular because it meant families could have their names on the title from day one.
He said families buying under shared ownership would have to provide a small deposit of 3 to 5 per cent of the market value.
They would have to have a good credit history and would need to be able to pay at least $500 to $600 a week on current interest rates.
