Lorraine Moon, June Brown and Trish Turney say Auckland Council has sold its share in their homes with no forewarning. Photo / Sylvie Whinray
Retirees say Auckland Council is attempting to sell its stake in millions of dollars of inner-city land in secret. Critics say it raises questions about local government transparency ahead of the mayoral elections. Ben Leahy investigates
June Brown is one of up to 150 older residents blindsided by what some are calling a "top-secret sell-off" of retiree units by Auckland Council.
The normally bubbly 99-year-old is anxious about her future after receiving a "bolt-out-of-the-blue" letter from the council on June 1 saying the local body had decided to sell its "equity" share in her Sandringham home.
Brown and most of the other retirees bought their units from the council's Own Your Own Home scheme at a 20 per cent discounted rate.
When they move out, their contracts state they must sell back to the council at the same discounted rate so the units can be on-sold to other retired people in need.
It's a 50-year-long social housing scheme that includes 150 units in 14 locations across the city and aims to provide retirees with affordable ownership options.
Yet Auckland councillors last month voted to end the council's participation in the scheme.
The meeting was conducted entirely behind closed doors. Homeowners weren't warned it was taking place. No documents justifying the decision have been publicly released.
In short, homeowners know nothing about which organisation will take over the scheme or how it would work in the future, Brown said.
"We don't know who they are," she told the Herald, while clutching a coffee mug, her voice rising with the stress.
"We've not even been given a hint of who they might be."
The retirees say the uncertainty potentially threatens their financial futures, with many having most of their life savings tied up in their houses.
The council argues the decision will not affect the homeowners' day-to-day lives and their existing contracts will be honoured by whichever organisation takes over the scheme.
It said the Own Your Own Home scheme was no longer popular, and the council's recent decision to sell its stake would save money for ratepayers and potentially allow more suitable housing options to be built across the city.
However, critics have blasted the council for its "lack of respect" shown to the retirees by failing to consult with them before the decision.
Keeping the matter behind closed doors also "smacks of bad governance" and opened the council to criticism that it was trying to avoid scrutiny by pushing a potentially unpopular proposal through in secret, the critics said.
June Brown still bubbles with energy at 99 years old.
Her zest for life is fuelled by sayings like: "There's always something good around the corner".
Yet her life has been a long struggle to get ahead.
She got her first job as a sewing machinist at 13 years old in 1936, has raised five children largely on her own and broke both her arm and her back in the past year.
Spending most of her life in state housing in Sandringham, first as a child, then a mother, it was only due to careful saving and frugal living that she could finally, at more than 60 years old, afford to buy her first home - an ex-state house in Taupō.
However, after she became sick about 16 years ago, her doctors advised her to move away to somewhere warmer.
Coming back to Auckland, she heard through a friend about the Own Your Own scheme, one of the few affordable options open to her, given Auckland Council was able to sell her home to her at 80 per cent of its market value.
Her unit in Sandringham is one of 28 units on Coyle St. She loves it.
The other owners are all independent but caring, she said. They're not always on each others' doorsteps visiting, but they keep an eye on one another and give help when needed.
Most of the residents are women who've had to fight hard to scrape together savings for retirement.
Fellow Coyle St resident Lorraine Moon and her former husband used to run deep-sea fishing vessels. But when they divorced in 1985, Lorraine got only a share in their house.
Trish Turney is a single mum who lost money when her first home was found to be leaky.
Paying between $400,000 to $500,000 for their units about three to four years ago, they said the Own Your Own scheme was a godsend.
Units in retirement villages typically sold for much higher than that and included ongoing payments that neither Turney nor Moon could afford.
The Herald spoke to six Own Your Own Home owners, spread across two locations in Sandringham and Mt Albert.
All said they heard about the scheme by word of mouth. They'd never seen it advertised.
Turney believed, with Auckland in the middle of a housing crisis, the scheme would be popular if people knew about it.
But she accused Auckland Council of deliberately keeping the scheme quiet and not investing in it.
She said when retirees died or moved out of their units, the units could sit empty for years without the council spending money to maintain them or advertise them as being back for sale.
She feared the council was "secretly" planning to sell its stake to the Government's Kāinga Ora.
That way, once the current homeowners left or died, the units could be bowled to make way for more intensive housing.
But it also raised more questions about whether Kāinga Ora or a different owner would tenant the vacant units in the meantime and to whom, what would happen to the value of their homes when it was time to sell and whether the new equity owner would be a trustworthy partner.
Turney said there was no way to know because the council had given them very little information.
Homeowners had only received two letters this month. These said the council had decided to sell its stake in the scheme and this would happen through an "off-market, two-stage expressions of interest process".
There are 150 units in the council's Own Your Own Home scheme spread across 14 locations in Auckland's north, west, south and inner central region.
The land they occupy is worth millions of dollars.
A council spokeswoman said it undertook an "internal value for money assessment" on the Own Your Own Home scheme and found it was no longer "fit for purpose".
She said 54 of the scheme's units were currently unoccupied.
The council now plans to sell its ownership of those 54 vacant units, its buy-back rights to the units owned by the retirees and any other equity it has in the scheme.
Council general manager of assets and delivery Marian Webb said in the letter to homeowners that Auckland's housing issues have changed substantially since the scheme was introduced in the 1970s.
"A diverse mixture of smaller units, cheaper housing and rental options are now required to meet the needs of older Aucklanders," she said.
"Furthermore, new retirement homes which offer wrap-around services have become more appealing."
Webb said the rights of the retirees would continue unchanged with "an enormous amount of work" going into finding a suitable socially-minded organisation to take over the scheme.
The council spokeswoman also said the council had made its decision to sell its stake in the scheme behind closed doors for two reasons.
That was to "allow time to engage with the current" homeowners and because they contained details of the council's "commercial strategy".
She also said the council did not notify the homeowners before the decision was taken because it was not required to by law.
Former longtime councillor and chairman of the Auckland Regional Council Mike Lee said Auckland Council effectively owned the units in partnership with the retirees and had a "moral obligation" to consult with them before making a decision.
Its actions showed a lack of respect, he said.
"There's a saying 'as safe as houses', but not, evidently, if you are in partnership with Auckland Council," he said.
Dr Andy Asquith, a former Massey University local government specialist and now adjunct research fellow at Curtin University in Perth, said the way the council had handled the manner "smacks of bad governance".
He said it could exacerbate a lack of faith in local government ahead of the upcoming mayoral elections.
"One of the principles of good governance is transparency and there has been zero transparency here," he said.
Associate professor Dean Knight from Victoria University of Wellington's Law Faculty said local governments did have the authority to keep discussions, minutes and documents confidential.
For instance, a local government body may choose to do this if it decided to buy a service or asset and believed that making the information public beforehand might drive up the price it would have to pay.
However, keeping a matter confidential must be weighed against the public interest in it, Knight said.
"If this has come as a bolt-out-of-the-blue for residents and their houses and that's causing concern and upset and grievance, that type of thing would suggest there is a strong public interest in the proposal," Knight said.
He said that could lead to concern that if a council is "too quick" to withhold details of proposals because there is a sniff of "commercial sensitivity" about them, they could be accused of trying to avoid democratic scrutiny of their actions.
Ninety-nine-year-old Brown puts it another way.
"It's already done and they're trying to shut us up," she said.
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