Wellington Mayor Tory Whanau discusses airport sale failure with Newstalk ZB’s Wellington Mornings host Nick Mills

• Wellington City Council has stopped the sale of its 34% share in the airport.
• The long-term plan will have to be amended and that could involve significant cuts to capital spending.
• It’s the second significant loss Mayor Tory Whanau has suffered this year after the Reading Cinemas deal was also killed.

Wellington Mayor Tory Whanau says “everything is on the table” to find up to $600 million of cuts after the failed airport sale – including Wellington City Council’s social housing portfolio.

Last week, the council killed the sale of its 34% share in the airport, with one councillor saying it was the “dirtiest politics” she had been involved with.

Whanau supported the sale, which was designed to help solve two serious financial risks: the council’s $2.6 billion under-insurance problem and the lack of diversity in its investment portfolio.

The long-term plan will need to be amended now that the sale is off the table.

Between $400m and $600m could be cut from the council’s capital spending to create additional debt headroom to respond to insurance risks.

Speaking to Newstalk ZB Wellington Mornings host Nick Mills this morning, Whanau said she could not predetermine which projects would be cut, but everything was on the table.

When pressed, she said that could include reducing the council’s social housing or selling ground leases.

On social housing, Whanau said: “That might be an option now, unfortunately. Certainly not what I wanted, but if we want to be able to insure our city we have to seriously look at that.”

Whanau said providing social housing was a commitment the council had made and that was important to her.

“I would prefer not to sell our homes for our most vulnerable and the Government would have to be willing to buy it as well.”

She said the council’s $1.8b investment in water infrastructure and the Golden Mile project were non-negotiable.

Whanau then said she was not prepared to sell the social housing.

“It’s on the table, but I’m not going to let it happen.”

She then clarified: “What I’m saying is, I will fight tooth and nail to keep our water, to keep the Golden Mile and actually to keep social housing but I understand I’m just one vote.”

The council recently decided to establish a community housing provider after its city housing portfolio ran into financial trouble.

In 2021, there were warnings the council’s social housing arm would be insolvent by June 2023 if nothing changed – a reality that called into question whether the council should be a provider.

This was resolved by establishing a community housing provider to which 1800 properties in the council’s portfolio are leased.

The provider, Te Toi Mahana, is now responsible for running and providing tenancy management for those properties and about 3000 tenants. The council retains ownership of most of the portfolio and the trust operates it.

Wellington City Council spent more than $500m in its recent long-term plan to upgrade the portfolio to fulfil a 2007 deal with Helen Clark’s Labour Government.

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.