"The Government has made it really clear that their focus is on affordable housing. The Government is doing everything they can and they want council to do everything they can," she said.
But Howick councillor Dick Quax was not convinced.
"In terms of the council acting as a guarantor for any kind of loans, it doesn't sit comfortably with me because that is not the business that ratepayers expect their money would be spent on," he said.
Community Housing Aotearoa co-chair Warren Jack said the bonds were needed because developers in special housing areas were required to earmark part of their land for "affordable" housing, but community groups willing to build such housing did not have the money to buy the land.
"The funding is to finance the purchase of the land until the house is developed. By that time, hopefully the organisation has been able to get its funding mechanism in place," he said.
Special housing area regulations define "affordable" housing as costing less than 30 per cent of the median Auckland household income for a buyer with a 10 per cent deposit and a 30-year mortgage at current two-year fixed interest rates. At the moment that works out at around $340,000.
Allowing $200,000 to build a 100-square-metre house, that means the land has to be priced at only around $140,000, which means that $30 million would finance land for about 214 homes. Developers are assumed to accept such a low price for the land in the "affordable" part of each area as the condition for getting special housing area status, giving them fast-track consents for the rest of the area.
However the proposal recognises that people moving into the houses would get a windfall gain if the market value of the land was above $140,000. Under the proposal, that gain would go to the community housing groups rather than to individual homeowners.
ASB Community Trust chief executive Jennifer Gill said there was a growing trend internationally for philanthropic trusts to invest in social enterprises such as housing bonds, rather than simply maximising returns on their funds. Her trust has an investment portfolio worth over $1 billion, but her board has not yet considered the proposal.
Tindall Foundation special projects manager Trevor Gray said his foundation was funded largely from shares in The Warehouse gifted by company founder Sir Stephen Tindall, so it did not have large cash funds available to invest. But the foundation backed the NZ Housing Foundation so housing bonds would be "an area of interest to us".
Housing bonds
Q: What is a housing bond?
Housing bonds have been used in Britain, the Netherlands, Switzerland and the United States. The NZ bonds would be issued for two to three years, paying investors a low interest rate, to fund housing for those on low incomes. Q: Who would issue the bonds?A company owned by Community Housing Aotearoa (CHA), representing 82 non-profit housing providers.
Q: Who would buy them?
Initially philanthropic trusts; eventually the general public.
Q: Would taxpayers' money be at risk?
No taxpayers' money would be invested, but CHA is asking Auckland Council to guarantee a fifth of the first $30 million issued to encourage other investors.
