Manukau mayor eyes housing boost

Manukau City Council has started talks with Government and non-profit agencies aimed at large-scale housing projects to kick-start the city's depressed house-building industry.

Mayor Len Brown hopes to pull together projects that could double the city's pensioner housing, create new emergency housing and build affordable housing for low-income first-home buyers on state and council land.

Housing Minister Phil Heatley has given his blessing to the talks and plans to back them up with a long-awaited "Gateway" scheme to help first-home buyers build houses on state land, due to be launched in October.

A spokesman said the Cabinet was also due to consider on August 3 whether to increase the cap on Welcome Home loans from $280,000 to "probably somewhere between $320,000 and $350,000", which could help finance the affordable housing.

Manukau has been hit harder than anywhere else by the collapse of the home-building market. New dwelling consents fell 67 per cent in the two years to May, from 1606 in the year to May 2007 to just 532 in the latest year. The nationwide fall was only 48 per cent.

Mr Brown has hired former Housing Minister Mark Gosche to convene a series of meetings over the past three months with Housing NZ, the Ministry of Social Development, Counties Manukau District Health Board and non-profit groups including the NZ Housing Foundation, Monte Cecilia Trust, Habitat for Humanity and the Salvation Army.

Mr Brown met Housing NZ chief executive Lesley McTurk in Wellington 10 days ago and yesterday visited a 70-home, $25 million Housing Foundation shared-equity project in West Auckland financed jointly by Housing NZ and commercial sources.

He said he hoped to develop similar joint ventures in Manukau.

"We are looking at two or three large projects in the Manukau community where we might be able to pull together collaboration of all those organisations with Housing NZ to see if we can do a multi-focused development with private affordable housing, public housing and housing for the elderly," he said.

He said the council and Housing NZ explored a scheme last year to demolish two council pensioner housing blocks in Otara and Manurewa and rebuild more than twice as many units for $30 million to $40 million.

That scheme fell over in March when Housing NZ found the cost of building the proposed apartment-style blocks would have been more than their market value under the council's policy of charging pensioners rent of only 25 per cent of their income.

But Mr Brown said he still wanted to pursue the idea of building more pensioner housing on vacant land around the council's 17 existing pensioner housing villages.

He said the 515 existing units were built with cheap government loans in the 1970s and the council could not afford to build any more, but he hoped Housing NZ could.

"We had agreement that we would put up the land and they would use the land to double the size of those properties," he said. "I'd be very keen for us to reinstitute that. Clearly it's a matter of the Government making its priorities. I thought it was a brilliant project - there will be ongoing discussions."

Housing NZ Auckland operations manager Celia Patrick said there could be scope for joint ventures using the corporation's Housing Innovation Fund for community housing, which got a boost in the May Budget from $12 million to $20 million a year.

Although local bodies were able to access this fund in the past, she said the criteria had been changed this month to favour loans to "third-sector" non-profit groups rather than local bodies except in places where no third-sector groups existed.

"It's early days, but I certainly see some opportunities in Manukau City to work with the council and with other organisations," she said.

"Housing NZ might be able to provide some funding through the Housing Innovation Fund. We might be able to provide land under the Gateway strategy."

The National Party promised before the last election to provide "Gateway" state land for first-home buyers to build affordable housing, allowing them to defer paying for the land for up to 10 years.

A spokesman for Mr Heatley said the final version of the scheme was likely to allow homeowners to buy the land after five years.

No money has yet been allocated to the Gateway scheme, but the Budget included an "indicative capital cost" of developing land for the scheme of $30 million to $48 million in the two years to June 2011 and the same amount again in the following two years.

BUILDING PLANS

* Two or three large projects for affordable housing joint ventures.
* Double existing council pensioner housing.
* More emergency housing.