Target of 1000 new units in Wellington's apartment conversion scheme

Te Aro, Wellington. Photo / Mark Mitchell

Wellington City Council (WCC) wants to set a target of having 1000 new units either delivered or under contract, over the next five years, in its apartment conversion scheme.

Under the Te Kāinga programme, the council enters into long-term leases with commercial building owners and developers to provide new affordable housing for essential and key workers.

WCC leases the apartments from the building owners and rents them out at less than market rate. The model is cost neutral to the council and has no impact on rates.

Rent increases are kept to a minimum and only to ensure the programme continues to have no impact on ratepayers.

This means the apartments remain more affordable than private market rentals over
time, giving tenants added financial certainty as well as security of tenure.

The first project in the programme, Te Kāinga Aroha, welcomed its first
tenants on March 5 this year.

It provides 52 apartments in the central city, 6 of which are one-bedroom units, 27 two-bedroom units, and 19 three-bedroom units.

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Council officials have reported in upcoming agenda documents for a social, cultural and economic committee meeting that four other projects have been agreed and bring the current number of units in the pipeline up to 339.

Furthermore, the scheme has moved beyond an apartment conversion project with the council fielding a "significant interest" in new build proposals.

With multiple project proposals being developed in the market, council officials have recommended a target is set of 1000 units either delivered or under contract over the next five years.

Wellington City councillor Fleur Fitzsimons. Photo / Mark Mitchell

Housing partnerships portfolio leader councillor Fleur Fitzsimons said Te Kāinga was a ground-breaking way for the council to ensure affordable rentals in Wellington.

"A target of 1000 homes will put the council well down the path of creating a secondary market of affordable housing in Wellington. It will help limit other rent increases in the private market."

Covid-19 showed the importance of key workers living in Wellington City, Fitzsimons said.

"Wellington will need a large number of working people to fix our infrastructure and build more homes, they must be able to live and work in our city, this scheme will help.

"This has to be just the beginning of the council taking a much more active role in the housing market in Wellington."

Officials said the range of conversions and new build proposals provided an opportunity for council to deliver a mix of alternative housing options such as live/work units in future developments.

"This approach would support the delivery of commercial facilities at
ground floor street level and could provide much needed support for the arts and retail
sectors.

"Through new build developments there is an opportunity to achieve greater
accessibility and sustainability outcomes than have been possible through building
conversions."