POLICY 5. Affordable public rental housing

For a peoples’ Christchurch – Decisions by us, for us, made here

    (a) Build 1,000 affordable council rental (or rent to own) homes in the next term of council
    (b) Require property speculators and property developers to pay the added value of land they own
    when council zoning changes result in increased land value (“betterment” charges)
    This will provide tens of millions to be invested in additional affordable, high quality council rental
    (or rent to own) properties
    (c) Establish a “Bill of Rights” for Christchurch tenants in rental accommodation
    (d) Pressure the government to allow Christchurch City Council to impose rent controls while the city rebuilds.
    (e) Require new developments of more than 10 homes to have a minimum of 50% of affordable homes in the development

Minto for Mayor Solution (a)

(a) Build a minimum of 1,000 affordable council rental (or rent to own) homes in the next term of council.

What would this look like?
Affordable public housing is a core responsibility of local government. Christchurch City Council owns many hectares of land much of which would be suitable for housing. Other land would be acquired as needed. These 1,000 homes would be built by the council utilizing cheaper rates for borrowing, cheaper building supplies through bulk-buying arrangements and reduced compliance costs. These homes would set the standard for affordable living in Christchurch.

What would it cost?
Approximately $200 million would be borrowed over three years and paid back by council tenants in rent (or rent to own) options. This income would also fund reinvestment for building additional affordable rental homes.

Why don’t we just leave it to the private sector?
The private sector has failed to provide the homes Christchurch needs. They have built no affordable homes (in the sense that those who need homes can afford them) in the city for the past decade because developers make bigger profits building large houses ($500,000 up) on small sections (eg Wigram) which are well out of reach of most families wanting to rent or buy.

What are the benefits?
Christchurch City is already thousands of houses short for its existing population. This program will directly address this need as well as having the flow-on effect of bringing down rents across the city as the supply of affordable rental properties increases.

Minto for Mayor Solution (b)

(b) Require property speculators to pay the added value on land they own when council zoning changes result in increased land value

What would this look like?
Currently property speculators and developers buy land on the city’s rural outskirts and within the Christchurch urban area and “land-bank” it while waiting for the value to increase through council zoning changes. This policy would mean that any increase in the value of the land through changes to council zoning would be charged to the developer as a “betterment fee” when the land is developed.
Note: Before 1953 betterment fees were charged regularly at 50% of the increased land value and were pivotal to housing development. They were used for example to develop almost the entire Hutt Valley in the decade following the Second World War. They can do the same thing for the housing crisis facing low-income families in Christchurch now.

What would it cost?
Nothing – it would do the opposite – bring in additional revenue to council.

Why not leave the profit to the speculator?
The speculator or developer has done literally nothing to justify receiving the unearned income which accrues as a result of a council decision to rezone land. Christchurch Council residents should benefit rather than speculators or developers. “Betterment” fees are commonplace overseas and were in New Zealand till compulsory fees were abolished by National in 1953

What are the benefits?
This would collect tens of millions of additional funding each year for further council investment in affordable housing.

Minto for Mayor Solution (c)

(c) Establish a “Bill of Rights” for Christchurch residents in rental accommodation

What would this look like?
This would be drawn up in consultation with tenants and would cover issues such as tenure; rent and “Warrant of Fitness” standards. For example Christchurch Council could draw up WOF criteria, rate rental properties A to F (as we do for commercial food outlets such as cafes) and publish the results on-line with listed improvements required as appropriate.

What would it cost?
No extra cost – to be accommodated within current council work priorities.

Why not leave the market to itself?
Families are at the mercy of “the market” because of the dire shortage of affordable rental housing. The market loads costs onto low-income families whose income is constrained not by the value of their contribution to society but by having their work valued by “the market”. This is becoming more desperate as the government evicts families from state houses.

What are the benefits?
Encouraging better housing for families and lower rents where these are desperately needed. Better housing for low income families means better health for children and families, better educational outcomes etc.

John Minto / Mayoral Candidate

Minto for Mayor Solution (d)

(d) Pressure the government to allow Christchurch City to impose rent controls till Christchurch’s housing affordability crisis is over

What would this look like?
Rents in Christchurch are too high with families across all parts of the city paying more than 30% of their income in rent. These high rents are caused by a shortage of affordable rental housing across the city. This policy would require the council to set a rentals policy and allow tenants to request a council evaluation of the rent they are being charged. The council would have the ability to reset the rent if it is outside the council’s rental policy guideline. This policy could reduce rents in Christchurch by up to 20%.

What would it cost?
No additional cost.

What are the benefits?
This would allow tenants to receive an independent evaluation of the rent they pay and have it fixed in cases where it is too high. This would also drive many “property investors” out of the housing market which in turn would lower rents and the price of houses themselves. Currently approximately half the houses sold in Christchurch are bought by property investors rather than first home buyers.

Minto for Mayor Solution (e)

(e) Require all new developments of more than 10 homes to have a minimum of 50% of affordable homes in the development

What would this look like?
Requirements like this are a typical feature of areas overseas where affordable housing is an issue.

What would it cost?
No additional cost.

Why not leave it to market forces to decide the affordability of property?
The market is the problem. It has produced no affordable houses in Christchurch for at least the past decade.

What are the benefits?
Self evident.

John Minto / Mayoral Candidate