pA l m e R S t o n n o R t H C i t y C o u n C i l
AGENDA
Community development
Committee
9am, Monday 9 November 2015
C OU N C I L C H A M B E R | F I R S T F LO O R | CI V I C ADM I NI S TR ATI ON
B U I L D I N G | 3 2 T H E S Q UAR E | PALM ER S TO N NO RTH
M E MBE RSH IP
Lew Findlay (Chairperson)
Adrian Broad (Deputy Chairperson)
Rachel Bowen
Vaughan Dennison
Duncan McCann
Billy Meehan
Annette Nixon
Bruno Petrenas
Aleisha Rutherford
Tangi Utikere
Grant Smith (Mayor)
Agenda items, if not attached, can be viewed at:
pncc.govt.nz | Civic Administration Building, 32 The Square
City Library | Ashhurst Community Library | Linton Library
Paddy Clifford
Chief Executive, Palmerston North City Council
Palmerston North City Council
W pncc.govt.nz | E info@pncc.govt.nz | P 356 8199
Private Bag 11034, 32 The Square, Palmerston North
ref # 5995511
PALMERSTON NORTH CITY COUNCIL
COMMUNITY DEVELOPMENT COMMITTEE
9 November 2015
ORDER OF BUSINESS
Apologies:
1.
Notification of Additional Items
Pursuant to Sections 46A(7) and 46A(7A) of the Local
Government Official Information and Meetings Act 1987, to
receive the Chairperson’s explanation that specified item(s),
which do not appear on the Agenda of this meeting and/or the
meeting to be held with the public excluded, will be discussed.
Any additions in accordance with Section 46A(7) must be
approved by resolution with an explanation as to why they
cannot be delayed until a future meeting.
Any additions in accordance with Section 46A(7A) may be
received or referred to a subsequent meeting for further
discussion. No resolution, decision or recommendation can be
made in respect of a minor item.
2.
Public Comment
To receive comments from members of the public on matters
specified on this Agenda or, if time permits, on other Committee
matters.
(NOTE:
If the Committee wishes to consider or discuss any issue
raised that is not specified on the Agenda, other than to
receive the comment made or refer it to the Chief
Executive, then a resolution will need to be made in
accordance with clause 1 above.)
3
ref # 5995511
3.
Deputation – Palmerston North Community Services Council
(Pages 6-12)
To consider a deputation from Community Services Council to
present their Field Education Placement project on Short Term
and Emergency Housing for Youth.
4.
Deputation – Public Health Services, MidCentral Health
(Pages 13-22)
To consider:
5.
(i)
A deputation from Public Health Services, MidCentral
Health to request that Council bans the sale of sugar
sweetened beverages from its main building and
community events. (Attached)
(ii)
Memorandum, dated 29 October 2015, entitled “Sugar
Sweetened Beverages – Deputation from MidCentral
Health, by the Acting Manager Venues, Wes ten Hove.
(Attached)
Confirmation of Minutes
(Pages 23-25)
To confirm as a correct record the minutes of the ordinary
meeting of 12 October 2015 [Part I Public]. (Attached)
6.
Social Housing Strategy Options for Delivery
(Pages 26-131)
Report, dated 22 October 2015, from the Strategy and Policy
Manager, Julie Macdonald. (Attached)
7.
Natural Burial Cemetery Site Selection
(Pages 132-164)
Report, dated 29 October 2015, from the Leisure Assets Officer,
Brian Way and the Parks & Property Manager, John Brenkley.
(Attached)
8.
Committee Work Schedule
(Page 165)
Committee Work Schedule, dated November 2015. (Attached)
9.
Exclusion of Public
That the public be excluded from the following parts of the
proceedings of this meeting, namely Agenda item …..
The general subject of each matter to be considered while the
public is excluded, the reason for passing this resolution in
relation to each matter, and the specific grounds under Section
48(1) of the Local Government Official Information and Meetings
Act 1987 for the passing of this resolution are as follows:
4
ref # 5995511
General subject of each
matter to be considered
Reason for
passing this
resolution in
relation to
each matter
Ground(s) under
section 48(1) for
the passing of
this resolution
This resolution is made in reliance on Section 48(1)(a) of the
Local Government Official Information and Meetings Act 1987
and the particular interest or interests protected by Section 6 or
Section 7 of that Act which would be prejudiced by the holding of
the whole or the relevant part of the proceedings of the meeting
in public are as follows:
Also that persons listed below be permitted to remain after the
public has been excluded for the reasons stated.
Chief Executive (Paddy Clifford), Chief Financial Officer (Grant
Elliott), General Manager, City Enterprises (Ray McIndoe),
General Manager, City Future (Sheryl Bryant), General Manager,
City Networks (Ray Swadel), General Manager, Customer
Services (Peter Eathorne), General Manager, Libraries and
Community Services (Debbie Duncan), Human Resources
Manager (Wayne Wilson) and Strategic Communications
Manager (Mark Torley) because of their knowledge and ability to
provide the meeting with advice on matters both from an
organisation-wide context (being members of the Council’s
Management Team) and also from their specific role within the
Council.
Legal Counsel (John Annabell), because of his knowledge and
ability to provide the meeting with legal and procedural advice.
Committee Administrators (Carly Chang, Rachel Corser and
Penny Odell) and Governance and Support Team Leader (Kyle
Whitfield), because of their knowledge and ability to provide the
meeting with procedural advice and record the proceedings of
the meeting.
[add officers who are authors of reports or their substitutes]
because of their knowledge and ability to assist the meeting in
speaking to their report and answering questions, noting that
they will be present at the meeting only for the item/ that relate to
their respective report.
[add third parties, e.g. consultations who are authors of thir d
party reports being considered] because of their knowledge and
ability to assist the meeting in speaking to their report and
answering questions, noting that such person/s will be present at
the meeting only for the items that relate to their respective
report.
.
*
*
5
*
*
*
$$"!%#
!"#
!#*!"")
'$#%$!(
2(.+2(.' )+,('-('" !-6(+'2(-!+'" !-6%"/"' "'%&+,-('(+-!62(.
0"%%'-(!()-!-2(.!/,(&0!+-(,%)6,.++'-%2-!"-2)+(/",
'(,',.+&+ '2!(.,"' (+2(.' )()%8
6(++' (+,(',6
2(.' )+,('",'(-%-(6(+!((,,'(--(,-20"-!-!"+"&&"-(+1-'
&"%26-!,("%,+/","'-!"-2+(+-(,$-!-2(.' )+,('-((',"+
,%)"' ('+"',;(.!,(+-(,$(-!+*.%%2"'*.-!(.,"' ()-"(',"'
-!,'(,+/"-!-(.%&--!"+!(.,"' ',8
.+ ! "
+,+!+,.%-+(&-!''.%
!(,-2-!%&+,-('
(+-! (&&.'"-2 +/", (.'"% "' )+"% DBCG8 +' ( ,("% ",,., 0+
"'-"",!/"' ," '""'-"&)-('-!0%%"' ('.&+(-!%"'-,
-!- ,(. !- -! ,+/", ( -! '.&+(., '", "' --'' - -! (+.&6
"'%."' 7
•
(.,"' 6,!(+->-+&'&+ '2(&&(-"('
•
•
%(!(%6 ,.,-' .,6 (&,-" /"(%'6 ' ,1.% .,6 ,("%
",(%-"('6 ,-" & ' ",+"&"'-"('6 /.%'+% (&&.'"-",6 !%-! '
0%%"' '(&,.+"-2'&)%(2&'-6
•
'*.-.'"' '!%%' "' 0(+$"' '/"+('&'-,(+)+(/"+,
•
,,-().%"-+',)(+-6
.-"(''-+"'"' ())(+-.'"-",C
/+% '('> (/+'&'- (+ '",-"(', 0"-!"' -! (&&.'"-2 ,-(+ --' -!
(+.& %(' 0"-! +)+,'--"/, ( -! %&+,-(' (+-! "-2 (.'"% ' %(%
&+, ( +%"&'- -( ",.,, ' )+"(+"-", -!, +.++'- ,("% ",,.,8
(.,"' 0,"'-""--!(+.&-(-!",,.6-!-06,,,2'"/+,"-2
("%(+$,-.'-,60(.%,$-(+,,8
•
#
6
!&+(+%"&'-(+%&+,-('(+-!
"',>%%(02+,,-!
!(.,"' ",,. "' %&+,-(' (+-! 2 ,--"' -!- :!(.,"' 6 , 0 %% $'(06 ",
(&"' ' .- ",,.;9;"- (&, (0' -( (' 0(+6 "',.+"-2906 ,
(+ '",-"(',6!/-(0(+$%(-!++-,.))(+-"' '0(+$"' (+)()%-( "/
-!&!()'())(+-.'"-",(+-!.-.+;8D
!).+)(,(-!! "",-(+,+!-!1-'-(-!!(.,"' "',.+"-2'!(&%,,',,",,.(+
2(.' )()% "' %&+,-(' (+-! 0"-! )+-".%+ (., (' -!"+ ,!(+- -+& '
&+ '2 (&&(-"(' ',8 --', - -! %#$&
"'-""-!(%%(0"' ,.&&+2(",,.,(+!(.,"' 7
• !'-(&)",,.,')+(/"+,6'"'/,-" -%-+'-"/,
•
-!+'(%%-"'(+&-"('
•
.%"-2(!(.,"' -(+,,
•
(&&.'"-2',-(%(($-
•
•
+"-+"(+-!!(.,"' %",-
(($-1",-"' "'+,-+.-.+0"-!'<"%="'('++'(.&'-8E
#(
,-+--!)+(#-0"-!,-+' -!,,)+(#-)%',('!+)
(% ( !%-!6 -!- "'%. &"1 &-!(, ))+(! 0"-!"' 2(.-!
/%()&'-+&0(+$8
' -! ( -! +,+! 0 ('.- ,-$!(%+ '%2,", .,"' ,&">
,-+.-.+ #!%&" &# 32 " "!% !%!" "' %&+,-(' (+-!6
"'%."' ,+/", 0"-! )+"&+2 "'-+,- "' ,+/" %"/+2 (+ 2(.' )()%6
%-+'-"/.-"(')+(/"+,6!(.,"' )+(/"+,6'-0(+$"' +(.),'!.+!,
"'%&+,-('(+-!81)'-!"'-+/"0)+(,,-("'%."'-+/"0,0"-!
+)+,'--"/, ( -! "-2 (.'"%6 "-2 (.'"%%(+,6 ' &&+, ( )+%"&'- -(
)+(/"0"+)(%"-"%('-1--(-!",,.8
.+"' -! ( -! +,+! 0 ('.- 45 "$!%(" #!%&"
)- +(& -! :%&2 (.-! -0(+$; ,.+/2 0"-! 2(.' )()% ' "'
!
!!
"
$
7
%-+'-"/ .-"(' 0"-! 5 #!#% $# !%!"8 !, ,.+/2, 0+
('.- !+"' -( -! -!", +&0(+$ ?"+',,6 .-('(&26 '- +"-26
,.%-,6(0,('6DBBH@6-!((-!",'-!((('.-
?0"-! )+-".%+ (',"+-"(' -( "'(+& (','-6 /(%.'-+2 )+-"")-"(' '
('"'-"%"-2@8
.+"' -! ( -! +,+! 0 ('.- ,&">,-+.-.+ "'-+/"0,
0"-! !"%6 (.-! ' &"%2 ?@6 (.,"' 0 %' (+)(+-"(' ?@6 -!
0%'(%"'-!"'",-+2(("%/%()&'-?@8
!(-!+,+!"'%.+/"0(.++'-&"+,+!'
' "'- +-"(' ( )(%"26 0"-! )+-".%+ (., (' +,+! +%-"' -( !(.,"' "',.+"-2'2(.' )()%"'%&+,-('(+-!'"'(-+(0%'8
#"
1+ "#"$"!&!!$
<' ,"3 "-, %%= ", '(- ("' -( 0(+$ (+ /+2('6 0!"! ", 0!2 +&0(+$+,,"' 2(.-!!(.,"' ',",+*."+60"-!"+"' %/%, ( ,.))(+- (+ 2(.' "'"/".%, 0"-!"' 2(.-! /%()&'-
+&0(+$ -!- +( '",, -! /%. ( 2(.' )()% "' (-+(
0%'8
2+ %!#$" $!
• (/+'&'- .'"' !' , + +*."+ "' (++ -( +,,
+,(.+""'",(+,("%,+/")+(/"+,8
•
•
(&&.'"-2 (+ '",-"(', + 0(+$"' "' ('-+- (&)%"'- ,"%(,
0!"! !/ ' ,' -( "&)- (' "'"/".%;, ', '
1)+"',0"-!"'-!,("%,-(+8
!+ ", ' .+ '- ' -( +,, -! ",,. ( !(.,"' )+"/-"('
"' '(.-(&(0"+,2,-&""%.+,8
3+ !%"!#
•
•
•
(%%(+-"(' ", ' "' (++ -( .%%2 .%"% -! ', ( 2(.' )()%6 +*."+"' -! ,.))(+- ( '-+% (/+'&'- '", "'
%&+,-(' (+-!6 %(% (/+'&'-6 ,("% ,+/",6 ,!((%,6
' "-I',&'0!'.6'"0"8
!(%",-" (%%(+-"/ &(% ( + ' ,.))(+- ", ' -(
)+(/" 0+)>+(.' ,+/" -( 2(.' "'"/".%, 0!( +*."+
8
!(.,"' 0"-!"' -"&+& 0!+ -! 2(.' )+,(' ", ,-"%% ()' -(
+"/"' ,.))(+-8
4+ "#" !( 24 $! "#! ! $ -" ##
.
•
,-%",!&'- ( G>H +((& DF !(.+ &+ '2 ,.))(+-
(&(-"(' (+ 2(.' )()% 0"-! ,("% 0(+$ ' 2(.-! 0(+$
,.))(+-8
•
'+((&,-,"(++",",(&&(-"('8
•
.))(+- %" ,$"%%, ' /%., +"-"% -( &"'-"'"' 0%%"' -(
)+)+2(.' )()%(+.%-!(('"')''8
5+ "#"!"##!$
• +(&&' ' "-"('% G>H +((& -+',"-"('% !(.,"' 6 (+
2(.' )()%-!-'!(.,"' "',&">"')''-'/"+('&'-8
• (+ 2(.' )()% 0!( +*."+ ,(& /(2 ,.))(+-6 -( %"/
"')''-%2 "' ' '/"+('&'- -!- %%(0, -!& -( /%() -!"+
%",$"%%,'-+',"-"('"'-(.%%"')''8
6+ ,"#"#""
• >,-%",!&'- ( !%-!26 ,.))(+-"/6 ' )(,"-"/ +%-"(',!"),
0"-! )+'-,6 0!'. ' ,.))(+- '-0(+$, 0!+ +$(0' "'
-!+%-"(',!")&2!/(.++-!+(. !(.',%%"' '/(2
,+/",0"-!"'-!!(.,"' "'"-"-"/8
•
+$(0' "' 0!'. +%-"(',!"), ", ., (+ !" ! '.&+ (
2(.' )()%"' !(.,"' )+"/-"('8+(&&'-!.,(
-! !'. ." ))+(! (+ -! /%()&'- ( ,-+(' .%-.+%
"'-"-2 ' ,', ( %(' "' ' -( )+(&(- )(,"-"/ &'-%
!%-!'0%%"' 8
7+ "#" ! "" $" ! ($ &# # %
#(#&!$#(
• -",+(&&'-!-&(+,,"%!(.,"' -(2(.' )()%0!(
+ 0'-"' -( %"/ "')''-%2 0"-!"' -! (&&.'"-2 ", /"%%
(+ -! +(.) ( 2(.' )()% 0!( + .'% -( ," ' -''2
+&'-,-.++'-8
• :+"'%2'%(+;!&", "/'&(+/%()&'-'.'"' 9
•
- ", +"-"% -( +,, -! ",+"&"'-"(' 2(.' )()% "'
%&+,-('(+-!1)+"'0!',$"' ,("%!(.,"' ')+"/-
+'-%(&&(-"('8
8+ "#"#%"!(!$!$
•
/(- -! ,-%",!&'- ( ' :/",(+2 +(.); ?.,"' -!
(')-.%+&0(+$",.,,2(''("(-!)'(&
(.'-"('6 - -! %&2 (.-! -0(+$@ 0!+ +%/'-
)+(,,"('%+)+,'--"/,( '",6(+1&)%7-!,+/",(
!%-!6 &'-% !%-!6 !(.,"' 6 #.,-"6 .-"('6 %(!(% ' +. "-"('6-!"'",-+2(("%/%()&'-'-!)+-&'-(
'-+'% "+, 0"%% &- 0"-! 2(.' )()% ' -!"+ /(-, -(
)+(/"+ .%+/"6,.))(+-6,+/",'"'(+&-"('8
10
.  $ ($
.
%!
*!! $ !%$
. !! !! %$ &!!
$!($!' !$ ! +
.
$!($!
!
% !!% " $!
!!&
.  !($!%!
!!(% !
!"%
.  (&!($ .
!!
!!'!" !! $
!%! ""
!
. &($!
.
$! !(!
'
'!" $$! . "$* $!*
.
%($+
%
"
- ! " .
.
% !! % $! ($
($ & !$ !
! !(
!
. ( .
. $!(""-$"*
.
(!*%$!*
!*
""%"
* . $!! &!
&$!
.  &$$! $!
$!
($&& !- !
" &!!&$
. "&!!$!$
. !$
" &&(
(
%$
11
!,
! " $!
,(
$!
!,
$!%
%
!"
#
#
!"
!
!
$!(
12
Banning the sale of sugar sweetened beverages on
Palmerston North City Council premises
1.
Summary
MidCentral DHB asks that the Palmerston North City Council ban the sale of
Sugar Sweetened Beverages (SSBs) from its premises and major Council run
community events. SSBs include soft drinks, sports drinks, energy drinks,
fruit drinks, flavoured milk and other beverages that contain added caloric
sweeteners.
The risk to health of drinking beverages with high-sugar content has led to
calls for Government departments and other organisations to ban the sale of
sugar sweetened beverages on all their premises.
MidCentral DHB banned the sale of SSB’s from all their premises from April
2015 and issued a challenge to other organisations to do the same. All DHB’s
will be SSB-free by the end of this year. . Nelson City Council and Marlborough
District Council have introduced SSB bans to varying degrees. These policies
are about taking a leadership role in the community and role-modelling
healthy beverage policies.
The New Zealand Medical Association considers that setting food and
nutritional standards for school canteens and public services, including
hospital cafeterias, could be a powerful means of changing eating habits.
We contend that this could be an element in a multifaceted strategy against
the obesity epidemic. (1)
Rising consumption of sugary drinks has been a major contributor to the
obesity epidemic. The New Zealand Medical Association (NZMA) states:
“Rising consumption of sugary drinks has been a major contributor to the
obesity epidemic and New Zealand has one of the highest consumption of
sugary sweets in the western world”
Recommendation: That PNCC bans the sale of sugar sweetened beverages on
its main premises and at Council major community events while limiting sale
of fruit juices to 250 ml servings.
2.
Purpose
That PNCC bans the sale of sugar-sweetened beverages and limits sale of fruit
juices to 250 ml servings at its main premises and events to:
• Improve health of staff;
• Support DHBs, councils and other organisations who are restricting
access to SSBs to promote health
• Role-model creation of environments that make “the healthy choice the
easy choice” for staff and community
•
3. Palmerston North City Council taking the lead
Banning SSBs
Page 1
13
June 2014
Reducing the availability of SSBs fits with the City Vision:
Palmerston North is a leading city in the quest to become
environmentally sustainable. (2) …
Sustainability means having a healthy environment that is clean and
safe. It means having a strong economy with lots of jobs. It means
having a caring community where people look after each other. It
means having lots of leisure opportunities.
Palmerston North City Council already has policy for its “Celebrating
Community” events of encouraging those events to be smokefree and to
provide healthy options for food and drink.
By not supplying sugar-sweetened beverages on site PNCC demonstrates to
staff and the public that we can help create a healthy environment. Research
indicates that healthy food and beverage policies are effective in promoting
healthy choices. The NZMA considers that
“Setting food and nutritional standards for school canteens and public
services, including hospital cafeterias, could be a powerful means of
changing eating habits. We contend that this could be an element in a
multifaceted strategy against the obesity epidemic. (1)
This policy is also about PNCC taking a leadership role in local community
and it is hoped that other organisations will adopt similar policies.
We know that education alone will not be as successful in changing behaviours
as education coupled with environmental change. Changing the environment
leads to behaviour change. A supportive environment helps people make the
healthy choice and many New Zealanders are struggling to do this (for
example more than a quarter of New Zealanders adults are pre-diabetic) (3).
If people cannot gain easy access to unhealthy food and drink that they are
more likely to take the available healthy alternative-“Making the healthy
choice the easy choice”.
The ban on sales would not prevent staff or visitors bringing their own drinks
nor would it prevent them from adding sugar to their own drinks. (A 600 ml
soft drink contains between 16 and 20 teaspoons – far more than is typically
added to a cup of coffee). The sale of 250 ml fruit drinks (which although high
in sugar contain other nutrients) would continue.
4.
Why reduce access to sugar sweetened drinks
The NZMA states:
Existing approaches to tackling obesity in New Zealand are not doing
enough. New Zealand is now the fourth most obese country in the OECD,
with nearly two thirds of adults either overweight or obese (68%). The
obesity rate in children continues to increase.
Obesity is a preventable risk factor for the development of various noncommunicable diseases such as type 2 diabetes, heart disease and several
Banning SSBs
Page 2
14
June 2014
cancers, and is associated with a huge financial burden on the healthcare
system, as well as indirect costs to society. (1)
“Most experts believe that increasing obesity levels are due to living in an
increasingly ‘obesogenic’ environment – one that promotes overconsumption of food and drinks and limits opportunities for physical
activity,” Ministry of Health. (4)
SSBs are a leading risk factor for many non-communicable diseases especially
obesity, type II diabetes and tooth decay. Over the past decade, the
consumption of sugar sweetened beverages has dramatically increased both
globally and in New Zealand. Besides having no nutritional value, SSBs
displace healthier beverage options. SSBs are cheap, readily available and
accessible, and are one of the most widely advertised products, particularly to
children, adolescents, and low income groups.
New Zealand has one of the highest consumption rates of sugar in the western
world (5). SSBs are the leading source of sugar for New Zealand
children (6). SSBs include soft drinks, sports drinks, energy drinks, fruit
drinks, flavoured milk and other beverages that contain added caloric
sweeteners.
Fruit juices (unlike fruit drinks) do not contain added sugar, however they are
high in natural sugar and it is recommended that fruit juice intake should be
limited.
5.
Other Councils have banned the sale of SSBs from their premises.
Feedback from Nelson City Council and Marlborough District Council
identified few problems when introducing their SSB policies. The Nelson City
Council policy (included in Appendix One) does not go as far as the
Marlborough District policy (Appendix Two) which bans the sale of SSBs from
events where Council is the major funder.
The Nelson City Council Officer, who helped prepare the policy, Susan MooreLavo, said the policy had not met many problems since being introduced. She
is available to talk to council officers should they want more details. The
policy does not cover all Council premises as there were practical issues
preventing this (eg contractual obligations, private businesses). Some
contractors had voluntarily followed the Council lead, for example the
contracted pool operator had voluntarily introduced a similar ban (although
they still sold sports drinks). They also had voluntary compliance from their
major event, “Opera in the Park.
Similarly most community groups have been “pretty compliant” even though
the policy is voluntary for community groups. The Council is working with a
few sports groups around reducing the selling of SSBs as a fundraising
initiative.
Banning SSBs
Page 3
15
June 2014
The Council policy has meant that the Council does not purchase or supply
sugar sweetened drinks. This means Council-funded community events (eg
holiday programmes in the library) and vending machines in Council’s main
buildings are SSB-free. Organisations on other Council premises have
voluntarily changed their vending machines to be SSB-free. Nelson
Councillors had accepted having water, fruit juice and artificially sweetened
drink served with alcohol.
The Nelson mayor has championed the policy, with her most recent comment
at the time of writing (Nelson Mail, 21 Oct0ber) encouraging other Councils to
follow their example:
“… imagine the difference you could make to the health of the children in your
city," she said, also challenging other mayors”
Feedback from Nelson City Council seems to be that Councillors have received
favourable comment on the policy and little negative feedback (although
Councillors have not been contacted in researching this submission).
Marlborough District Council Democratic Services Manager, Mike Porter said
the main problem with the new Sugar Sweetened Beverages Policy had been
that some Councillors were “missing their gin and tonic” because artificially
sweetened tonic was not available in small bottles.
Initially the policy had brought some scathing comment via social media but
this had died down quickly and the policy was becoming the new norm, he
said. Mr Porter is available to talk to council officers should they want more
details; and thought that Marlborough being more cohesive than other centres
had meant they could introduce a ban on Council funded events more quickly.
6.
Recommendations
We recommend
1.
Palmerston North City Council to ban the sale and serving of Sugar
Sweetened Beverages (SSBs) from its main premises and only supply
fruit juice in 250 ml servings (glasses or packets)
2. Ban the supply supply of sugary drinks from Council funded events,
initially on a voluntary basis but working over 2 – 3 years towards
full compliance.
Banning SSBs
Page 4
16
June 2014
Bibliography
1. New Zealand Medical Association. Tackling Obesity. s.l. : NZMA, 2014.
2. Council, Palmerston North City. City Vision, .
http://www.pncc.govt.nz/yourcouncil/our-vision/.
3. Prevalence of diagnosed and undiagnosed diabetes and prediabetes in New
Zealand: findings fromt eh 2008/09 Adult Nutrition Survey. Kirsten J Coppell, Jim I
Mann, Sheila M Williams, Emmanuel Jo, Paul L Drury, Jody C Miller, Winsome
R Parnell. ll, s.l. : New Zealand Medical Journal, 2013.
4. Health, Ministry of. Obesity questins and answers. http://www.health.govt.nz/ourwork/diseases-and-conditions/obesity/obesity-questions-and-answers.
5. Sugar sweetened beverages, obesity, diabetes and oral health: a preventable crisis.
R, Beaglehole. s.l. :
http://fizz.org.nz/sites/fizz.org.nz/files/6%20Sugar%20Sweetened%20Beverages,%20
Obesity,%20Diabetes%20and%20Oral%20Health.pdf, accessed October 2015, 2014.
6. Health, Ministry of. Ministry of Health. NZ Food NZ Children: Key results of the
2002 National Children's Nutrition Survey. Wellington: Ministry of Health; 2003.
(http://www.moh.govt.nz/notebook/nbbooks.nsf/0/658d849a2bac7421cc256dd9006cc7
ec/$FILE/nzfoodnzchildren.pdf, access. 2003.
7. Healthy Food Procurement Policies and Their Impact. Mark L. Niebylski 1,
Tammy Lu 1, Norm R. C. Campbell 1,*, Joanne Arcand 2, Alyssa Schermel 2,
Diane Hua 3, Karen E. Yeates 4, Sheldon W. Tobe 3, Patrick A. Twohig 5, Mary
R. L’Abbé 2 and Peter P. Liu. 2014, International Journal of Environmental
Research and Public Health, pp. 2608-2627.
8. Health, Ministry of. New Zealand Health Survey: Annual update of key findings
2012/13. Wellington : Ministry of Health, 2013.
9. —. Tracking the Obesity Epidemic . Wellington : Ministry of Health, 2004.
10. Ryall, Tony. Healthy Families NZ: Registrations of Interest open.
beehive.govt.nz. [Online] 14 March 2014. [Cited: 20 March 2014.]
http://beehive.govt.nz/release/healthy-families-nz-registrations-interest-open.
11. Depatment of Helath, Vicitoria State Government. Healthy choices: Healthy
eating policy and catering guidelines for workplaces. Helath Together Victoria.
[Online] 2013. [Cited: 2014.]
http://docs.health.vic.gov.au/docs/doc/98AEED275E377BC0CA257BFF007D3005/$
FILE/Healthy%20Eating%20Policy%20and%20Catering%20Guide%20for%20Work
places_27%20Sept%202013.pdf.
12. Changes in water and beverage intake and long-term weight. A Pan1, 2, VS
Malik1, T Hao3, WC Willett1,3,4, D Mozaffarian1,3,4,5 and FB Hu1,3,4. s.l. :
International Journal of Obesity (2013) , 2013, Vols. 37, 1378–1385.
13. Ministry of Health. Food and Nutrition Guidelines for Health Adults.
Wellington : Ministry of Health, 2003.
14. Center for Disease Control. The CDC Guide to Strategies for reducing the
consumption of. s.l. : Center for Disease Control, 2010.
15. A cross-sectional analysis of patterns of obesity in a cohort of working nurses and
midwives in Australia, New Zealand, and the United Kingdom. Fiona E. Bogossiana,
, , Julie Hepwortha, Gary M. Leongb, d, Dylan F. Flawsa, Kristen S. Gibbonsa, c,
Christine A. Benefera, Catherine T. Turnera. 6, s.l. : International Journal of
Nursing Studies, 2012, Vol. 49.
Banning SSBs
Page 5
17
June 2014
Appendix One: Nelson City Council Sugar Sweetened Beverages Policy
Objective
This policy supports the health of staff, visitors, and elected members at Nelson City Council
workplaces through the provision of healthy beverage choices.
Definition
A Sugar Sweetened Beverage (SSB) is any beverage that has had calorific sweetener, usually
sugar, added prior to sale. The main categories of sugary drinks include soft drinks/fizzy
drinks, sachet mixes, fruit drinks, cordials, flavoured milks, cold teas/coffees, and
energy/sports drinks.
Background
There is a growing awareness of the association between free sugars and a number of health
related conditions including obesity, poor dental health, and serious medical conditions such
as type-2 diabetes. SSBs are recognised as being one of the leading contributors of sugar to
the diets of New Zealanders .
The World Health Organisation recommends that free sugars should contribute to no more
than 10% of total energy intake, equivalent to approximately 12 teaspoons of sugar per day
for an average adult. Britain has recently introduced new guidelines which halve this limit to
no more than 5% of total energy intake. As a guide, one can of “fizzy” drink contains 10
teaspoons of sugar.
Nelson City Council is well positioned to positively influence the health behaviours of its
staff, elected representatives, and visitors, and to model good health behaviours for the wider
community.
In 2013, the Nelson Marlborough District Health Board became the first Health Board in the
country to implement a policy limiting access to SSBs. Nelson City Council wishes to support
this important initiative in our community.
Principles
This policy is based on the following principles:
•
•
Nelson City Council is a role model for the community and supports initiatives that have the
potential to impact positively on the health of the community.
Nelson City Council is a workplace which is concerned for the wellbeing of its staff and
considers that it is important to create an environment that makes healthy drink choices the
easier choice for not only staff, but also for elected members and visitors.
Healthy Beverage Policy
1. Nelson City Council will ensure that when providing beverages which it has purchased,
only those which have not had sugar added to them at pre-point of sale will be available for
consumption at the following Council workplaces:
•
•
Civic House
Nelson City Council Libraries
Banning SSBs
Page 6
18
June 2014
•
Broadgreen House.
2. This policy applies to the provision of beverages to Nelson City Council elected members,
staff, visitors and volunteers including:
•
•
•
•
•
Work related meetings for staff, elected members, and visitors
Workshops and training events
Conferences and visiting speaker events
Council meetings for elected members and staff
Social functions for staff or visitors funded by Council.
3. Council managed vending machines will provide only those beverages allowed under this
policy.
4. Information related to this policy including a list of healthy beverage choices and
information related to why this policy has been implemented, will be available on the Nelson
City Council website. Links will also be provided to relevant information including health
information.
Outside of Policy Scope
This policy does not apply to hot beverages (tea, coffee or milo), beverages that are already
subject to an age restriction, or to beverages that are brought from home for personal use or to
share for personal celebrations.
Healthy Beverage Choices
The following beverages are accepted as alternative choices and are supported under this
policy:
•
•
•
•
Water
100% Fruit Juice
Unsweetened milk
Artificially sweetened or zero sugar soft drinks.
Neslon city council policy (http://nelson.govt.nz/council/plans-strategiespolicies/strategies-plans-policies-reports-and-studies-a-z/sugar-sweetenedbeverages-policy, accessed Sept 2015)
Banning SSBs
Page 7
19
June 2014
Appendix Two
Sugar-Sweetened Beverages Policy (February 2015)
Purpose
The purpose of this policy is to give effect to Marlborough District Council’s support
for initiatives that contribute to the improved health of the community.
The policy reflects the Council’s decision to adopt a position of a role model in
providing a workplace where healthy beverage choices are provided.
Background
Marlborough shares the nationwide trend toward increased health-related conditions
including poor dental health, obesity and serious medical conditions such as Type-2
Diabetes. Sugar-sweetened beverages have been identified as a key contributor to the
sugar content of the New Zealand diet and, thus, a factor influencing this health trend.
In 2013, the Nelson Marlborough District Health Board implemented a policy limiting
access to sugar-sweetened beverages. The Marlborough District Council endorses this
policy.
This also links with Council’s Community Outcome in the Draft Long Term Plan
2015 – 2025:
“Health - A healthy and safe community that thrives on positive relationships between
all people, where opportunities for a better life abound.”
Policy
Council as a matter of policy will ensure that:
• within the Council workplace, it will offer for sale or supply only such
beverages which have not had sugar added. The policy will apply to beverages
provided for work-related meetings and workshops for staff, elected members
and visitors and for council-hosted social functions.
• at public events where it is the primary funder, it will be a requirement that
only healthy alternatives to sugar-sweetened beverages be provided for supply
or sale.
• Council will actively promote and advocate adoption of the sugar-sweetened
beverages policy to organisers of events and functions at Council-owned
venues and facilities.
Definition
A sugar-sweetened beverage is any beverage that has had calorific sweetener, usually
sugar, added. Sugary drinks include soft drinks/fizzy drinks, sachet mixes, fruit
drinks, cordials, flavoured milks, cold teas/coffees, and energy/sports drinks. This
policy does not apply to hot beverages (eg tea, coffee), beverages that are already
subject to an age restriction, or to beverages that are brought from home for personal
use or to share for personal celebrations. Beverages accepted as alternative choices
and supported under this policy are water, fruit juice with no added sugar,
unsweetened milk, sugar-free soft drinks.
The policy to be reviewed in March 2017.
Banning SSBs
Page 8
20
June 2014
TO
Chairperson and Committee Members
Community Development Committee
OF 9 November 2015
DATE
MEETING
DATE
29 October 2015
SUBJECT
SUGAR SWEETENED BEVERAGES – DEPUTATION FROM MID-CENTRAL
HEALTH
____________________________________________________________________________________________________
Recommendation(s) to Committee
That the Committee considers the information contained herein and determines any further
response.
Issue
To minimise risk to public health, MidCentral DHB has asked that the Palmerston North City Council ban
the sale of Sugar Sweetened Beverages (SSBs) from its premises and major Council run community
events.
Background
SSBs include soft drinks, sports drinks, energy drinks, fruit drinks, flavoured milk and other beverages
that contain added caloric sweeteners.
MidCentral DHB has recommended:
1. Palmerston North City Council to ban the sale and serving of Sugar Sweetened
Beverages (SSBs) from its main premises and only supply fruit juice in 250 ml
servings (glasses or packets)
2. Ban the supply of sugary drinks from Council funded events, initially on a voluntary
basis but working over 2 – 3 years towards full compliance.
The following commentary is based on an initial assessment of operational impacts should the Council
wish to vary from status quo (which has no restrictions)
SSB policies similar to that operated by Nelson City Council and Marlborough District Council would
have only minor implications in terms of Venues revenue, subject to:
•
existing contractual obligations being allowed for, and
21
-2-
•
the policy applying only to Council organised or primarily Council funded events and
activities
If shifting from the status quo, the Council can be mindful of similarities with the supply of alcohol for
example, requiring low alcohol/non-alcoholic beverages. There are also parallels with the Council’s
Smokefree policy whereby the Council is seeking to encourage the desired behaviour with prominent
advertising but short of coercive enforcement.
Qualifications:
Contract Obligations –
Council has contract obligations relating to 3 vending machines (B&M Centre, Arena 2 and 3). This
contract provides for preferred supplier status and signage in the concourse of both the Stadium and
Arena. Some non SSB drinks are part of the current supply
Catering Contract
The existing catering contract will shortly be subject to re-tender. This creates an opportunity for the
Council to assert any new direction through the proposed terms and conditions.
If SSB policy restrictions and prohibitions were to apply only to Council organised/primarily funded
events, revenue implications are assessed to be minor, if any, assuming offset with the equivalent
purchase of alternative products.
The Council should be mindful of implications on staff workplace effects and the choices staff may make
on an individual basis. HR advice will assist if changes to the workplace/cafeteria are contemplated.
Third Party Hirers/Users
We are not privy to any direct sponsorship or supply contract terms between BBS suppliers and our key
sports bodies or other users.
Other Considerations
Depending on the potential application to non-Council funded events, there may be issues around the
amount of offset through alternate product purchases, tolerance of BYO SSBs with potential security
staffing or enforcement implications.
Wes ten Hove
Acting Manager Venues
City Enterprises
22
Palmerston North City Council
Minutes of the Community Development Committee Meeting [Part I Public], held in the
Council Chamber, Civic Administration Building, Palmerston North on Monday
12 October 2015, commencing at 9.02am
Members
Present:
Councillor Lew Findlay (in the Chair), The Mayor (Grant Smith) and Councillors
Rachel Bowen, Adrian Broad, Vaughan Dennison, Duncan McCann, Annette
Nixon, Bruno Petrenas, Aleisha Rutherford and Tangi Utikere.
Non
Members:
Councillors Susan Baty, Leonie Hapeta, Jim Jefferies, and Chris Teo-Sherrell.
Apologies: Councillors Ross Linklater and Billy Meehan.
Councillor Jim Jefferies left the meeting at 9.58am during consideration of
clause 47. He entered the meeting again at 10.01am during the conclusion of
clause 47. He was not present for clause 47.
(NOTE: Voting was determined by way of electronic vote.)
44-15
Apologies
The COMMITTEE RECEIVED the apologies.
Clause 44-15 above was carried 13 votes to 1, the voting being as follows:
For:
The Mayor (Grant Smith) and Councillors Susan Baty, Rachel Bowen, Adrian Broad, Vaughan
Dennison, Lew Findlay, Leonie Hapeta, Jim Jefferies, Duncan McCann, Annette Nixon, Bruno
Petrenas, Aleisha Rutherford and Tangi Utikere.
Against:
Councillor Chris Teo-Sherrell.
45-15
Deputation – Ian Argyle and Don Rix
In his deputation Mr Rix stressed the significance of the name ‘Moturimu.’ He
read a newspaper extract from the Manawatu Standard dated 26 August 2006
which also described the early history of the area. In conclusion, Mr Rix urged
the Committee to give serious consideration to changing the name of the
Gordon Kear Forest back to ‘Moturimu.’
Mr Argyle followed and stated that the name meant so much to them. He had
been disappointed when the name changed and had not been part of any initial
consultation. He stated that it was the birth of a new forest and should have the
original name.
It was also noted that Mr Rix and Mr Argyle would be happy to have part of the
area named ‘Moturimu.’
The COMMITTEE:
45.1
RECEIVED the deputation for information.
23
Community Development, 12 October 2015 – Part I
Ref # 5950072
- 2 45.2
RECOMMENDS:
.1
That the Council acknowledge the submission of the Kear
family and not support the deputation of Mr Ian Argyle to
change the name of the Gordon Kear Forest to Moturimu
Forest.
.2
That officers engage with Mr Argyle and Mr Rix with a view to
using the name Moturimu for some part of the upper Scotts
Road area.
Clause 45-15 above was carried 14 votes to 0, the voting being as follows:
For:
The Mayor (Grant Smith) and Councillors Susan Baty, Rachel Bowen, Adrian Broad, Vaughan
Dennison, Lew Findlay, Leonie Hapeta, Jim Jefferies, Duncan McCann, Annette Nixon, Bruno
Petrenas, Aleisha Rutherford, Tangi Utikere and Chris Teo-Sherrell.
46-15
Deputation – Destination Manawatu
Representing Destination Manawatu Mr Lance Bickford made a deputation
providing an overview of the events being held as part of the Agri Investment
Week 2016.
It was noted that adding vibrancy to the city was important and it was more
about intensity than size. The core events mentioned were the NZ Ewe’s Milk
Conference, Future Farms Conference, Agribusiness Investment Showcase
and the Central District Field Days, along with a number of support events.
Mr Bickford described one of the support events ‘Plate of Origin’ challenge in
which local restaurants partner with another region in New Zealand to produce
a plate of food to be judged alongside other entries. He described the ambition
of creating the biggest week of the year and was hopeful to get people on
board. He discussed creating linkages so that investors see a greater
opportunity to invest in the Agribusiness sector. In conclusion Mr Bickford noted
that Destination Manawatu valued Palmerston North City Council as a partner.
The COMMITTEE RECEIVED the deputation for information.
Clause 46-15 above was carried 14 votes to 0, the voting being as follows:
For:
The Mayor (Grant Smith) and Councillors Susan Baty, Rachel Bowen, Adrian Broad, Vaughan
Dennison, Lew Findlay, Leonie Hapeta, Jim Jefferies, Duncan McCann, Annette Nixon, Bruno
Petrenas, Aleisha Rutherford, Tangi Utikere and Chris Teo-Sherrell.
47-15
Confirmation of Minutes
Councillor Jim Jefferies left the meeting at 9.58am.
The COMMITTEE RESOLVED that the minutes of the meeting held on
14 September 2015 [Part I Public] and [Part II Confidential] be confirmed as a
correct record, subject to the above amendment.
Clause 47-15 above was carried 13 votes to 0, the voting being as follows:
24
Community Development, 12 October 2015 – Part I
Ref # 5950072
- 3 For:
The Mayor (Grant Smith) and Councillors Susan Baty, Rachel Bowen, Adrian Broad, Vaughan
Dennison, Lew Findlay, Leonie Hapeta, Duncan McCann, Annette Nixon, Bruno Petrenas,
Aleisha Rutherford, Chris Teo Sherrell and Tangi Utikere.
Councillor Jim Jefferies entered the meeting again at 10.01am.
48-15
Committee Work Schedule
The COMMITTEE RECEIVED its Work Schedule, dated October 2015.
Clause 48-15 above was carried 14 votes to 0, the voting being as follows:
For:
The Mayor (Grant Smith) and Councillors Susan Baty, Rachel Bowen, Adrian Broad, Vaughan
Dennison, Lew Findlay, Leonie Hapeta, Jim Jefferies, Duncan McCann, Annette Nixon, Bruno
Petrenas, Aleisha Rutherford, Tangi Utikere and Chris Teo-Sherrell.
The meeting finished at 10:04am.
Confirmed this 9th day of November 2015
Chairperson
25
TO
Chairperson and Committee Members
Community Development Committee
DATE OF
MEETING
9 November 2015
FROM
Julie Macdonald, City Future Unit
DATE
22 October 2015
SUBJECT
SOCIAL HOUSING STRATEGY OPTIONS FOR DELIVERY
____________________________________________________________________________________________________
Recommendation(s) to Council
1. That the Council receives the ‘Social Housing Working Group Report October 2015’
(attached as Appendix One).
2. That the Council endorse the Status Quo Option for the continued operation of social
housing according to the provisions in the 10 Year Plan.
3. That the Council continues to actively explore opportunities to increase the growth in
social housing in Palmerston North, through direct provision or partnership with others.
4. That the ‘Social Housing Working Group Report October 2015’ is endorsed as the
fulfilment of the review required by Section 17a of the Local Government Act 2002.
Issue
In March 2015 the Council adopted the Social Housing Strategy. This Strategy committed Council to the
ongoing support and delivery of social housing, and also to supporting “the increase in social housing in
Palmerston North”. The Strategy also stated Council’s intention that “delivery mechanisms are
investigated and publicly consulted on and a recommended delivery option is proposed in 2015/16”.
The Council also resolved that “the Chief Executive be instructed to develop a report, within six months,
on delivery options for governance, funding and growing Council’s housing stock.” This report is the
outcome of that instruction.
Depending on which option or options the Council wishes to pursue, there may need to be a public
consultation process. This will be necessary unless option one (status quo) is the sole preferred option,
as social housing is a strategic asset. The Significance and Engagement Policy 2014 also states that:
In general, if Council is making a decision about a strategic asset it will use a greater degree of engagement
than it will for a non-strategic asset. In particular, the Council cannot transfer ownership or control of a strategic
asset unless it has first consulted with the community through a Long-Term Plan Consultation Document
(LG Act s97).
Ref: 5793382
26
-2Background
A working group was formed to meet the terms of reference. This group undertook the following tasks:
-
Development of criteria to assess future delivery options, including growth
Identification of assumptions of the analysis
Identification of options for future social housing delivery
Assessment of each option against the criteria
The criteria used to assess the options were as follows:
1.
2.
3.
4.
5.
6.
7.
8.
How well the Social Housing Strategy can be delivered
Financial implications
Ability to access Income Related Rent Subsidy and Community Housing Provider
registration
Social impact on the City as a whole
Impact on current and future tenants
Ability for Council to influence social housing delivery over time
Opportunity to benefit from partnerships with other contributors
Risks and barriers
The Social Housing Working Group Report informs the recommendations made to the Community
Development Committee.
Discussion
The report provides an analysis of a wide range of options for the future delivery of social housing. It
became clear during the course of this work that some of the options considered are not consistent with
implementation of the Council’s Social Housing Strategy, but these options have been included for
Councillors’ consideration to ensure a transparent process. While options involving the outright sale and
exit from social housing were disregarded because they were outside the terms of reference, options
which involve decreased Council control were considered.
The Working Group’s recommendation for the delivery of Council’s social housing is in keeping with the
analysis undertaken, and reflects the uncertainty around decisions about social housing in the national
context. It seems prudent to take a ‘wait and see’ approach to the changing national and local situation.
Council’s adoption of this recommendation would not preclude the consideration of operational changes
within the scope allowed by the Social Housing Strategy, and indeed a further report on the Council’s
desire for cost-saving in social housing will be provided by City Corporate later this financial year.
Conclusion
In the course of its research, the Working Group has explored the advantages and disadvantages of
each of the options and has reached a conclusion that the status quo (option one) is the option which
provides the best opportunity for the Council to fulfil its Strategy goals. This option also minimises the
risk, both to tenants, and to the ongoing provision of social housing in the City.
While Councillors have expressed the desire to increase social housing, it is clear that this cannot be
achieved within current funding arrangements without significant changes to the 10 Year Plan or the
delivery of the Strategy. These have both been publicly consulted on, and reflect the conclusions of
widespread discussion with stakeholders.
Julie Macdonald
STRATEGY AND POLICY MANAGER
27
-3-
Appendix One: Social Housing Working Group Terms of Reference
Background
The social housing working group has been formed to contribute to further work on social housing
determined by:
1. The Council (March) resolution “That the Chief Executive be instructed to develop a report, within six
months, on delivery options for governance, funding and growing Council’s housing stock.”
2. The Action from Driver 4 of the Social Housing Strategy (2015) which states “Delivery mechanisms are
investigated and publicly consulted on and a recommended delivery option is proposed in 2015/2016.
3. The requirement to review the cost-effectiveness of Council functions determined section 17A of the Local
Government Act.
Objectives
1. Identify potential social housing delivery options for the Council’s social housing.
2. Develop criteria to assess each option (e.g. cost effectiveness, outcomes for tenants).
3. Meet the requirements of section 17A of the Local Government Act.
4. Comply with section 97 of the Local Government Act.
5. Assess each option against the Social Housing Strategy (2015).
This assessment will be in two parts. The first is considering the social housing as it is, and the
second is considering the stated goal to increase the amount of social housing in Palmerston North.
6. Present the outcome of the review to the Community Development Committee in September 2015.
Scope
1. The scope of this review is the social housing currently delivered by the Council and defined by the Social
Housing Strategy (2015).
2. The review includes consideration of material from other local authorities that have considered the future
direction for their social housing.
3. The report produced by this Working Group will only partly fulfil the action contained in Driver 4 (above). It is
expected that this report will form the basis for a decision by the Council and a subsequent public
consultation process.
4. The activities of the working group will include discussions with stakeholders (e.g. HNZC, government
agencies, other local authorities, PNCC staff and social housing providers).
5. The scope does not include the recommendation of a delivery option.
28
Appendix One:
Social Housing Working Group Report
November 2015
29
Table of Contents
Appendix One: ........................................................................................................................................ 1
Executive Summary................................................................................................................................. 4
Part A: Terms of Reference and Context of Analysis .............................................................................. 7
1.
Purpose and Terms of Reference ................................................................................................ 7
2.
Context of the Review ................................................................................................................. 7
International context ...................................................................................................................... 7
New Zealand policy context ............................................................................................................ 8
Social context in Palmerston North ................................................................................................ 9
Palmerston North City Council social housing .............................................................................. 11
Other local authorities .................................................................................................................. 14
Part B: Options Identification, Assumptions and Criteria ..................................................................... 17
3.
Options for Future Delivery ...................................................................................................... 17
4.
Criteria for Analysis ................................................................................................................... 19
5.
Assumptions .............................................................................................................................. 20
Part C: Analysis of Options, Other Considerations and Next Steps ...................................................... 23
6.
Analysis of Options.................................................................................................................... 23
Table 2: Summary of Options’ Analysis......................................................................................... 24
A. Status Quo Option .................................................................................................................... 26
B. Trust Options ............................................................................................................................ 28
C. Council Controlled Organisation (CCO) Options ....................................................................... 31
D. Other Entity Options ................................................................................................................. 35
E. Other Options (Exit from Social Housing) ................................................................................. 40
7.
Other Considerations ................................................................................................................ 46
Legislative Environment ................................................................................................................ 46
Local Government Act 2002, section 17A ..................................................................................... 46
Asset Sales..................................................................................................................................... 47
Organisational Management ........................................................................................................ 48
Communication ............................................................................................................................. 48
Growth .......................................................................................................................................... 48
8.
Next Steps ................................................................................................................................. 49
9.
Conclusion ................................................................................................................................. 49
Appendix One: Social Housing Working Group Terms of Reference .................................................... 50
30
3
Appendix Two: International Context................................................................................................... 54
Appendix Three: Ministry of Social Development Criteria for Eligibility for Social Housing and the
Income Related Rent Subsidy ............................................................................................................... 71
Appendix Four: Social Housing Strategy ............................................................................................... 72
Appendix Five: PNCC Social Housing Financial Information ................................................................. 84
Appendix Six: Review of Other Council Housing................................................................................... 89
Appendix Seven: Legal Advice on Transfer of Assets.......................................................................... 103
Social Housing Working Group Report October 2015
31
4
Executive Summary
1. The Social Housing Strategy was adopted by the Council in March 2015. Driver 4 of the Strategy is
“To make the most effective use of resources in supporting the provision of social housing” and
includes an action to investigate future delivery mechanisms for social housing.
2. This report is in response to the Council directive (in March 2015) That the Chief Executive be
instructed to develop a report, within six months, on delivery options for governance, funding and
growing Council’s housing stock.
3. There is a national social housing reform programme underway, occurring as part of an
international trend towards privitisation and decreased public control.
4. The Government has announced that it will increase the current payment of 62,000 Income
Related Rent Subsidies (IRRS) to 65,000 by 2018, and so is looking to registered Community Housing
Providers (CHPs) to provide these new subsidised places. Local authorities are not eligible to become
CHPs, and so are therefore ineligible for the IRRS for their tenants.
5. The adoption of the Social Housing Strategy reflects the acknowledgment by the Council that
there is an ongoing need for social housing in Palmerston North, and that the provision by the
Council contributes to meeting this need.
6. The Council has indicated (through the Social Housing Strategy) that it wishes to support the
increase in social housing provision in Palmerston North.
7. The Council currently houses more than 500 tenants – providing means-tested subsidised rentals
for older people and people with disabilities, and some unsubsidised rentals for people on low
incomes. Up to 20 places in the former public housing are available at subsidised rates for people on
low incomes.
8. The Council is the second to largest social housing provider in Palmerston North (to HNZC), with
more social housing than the non-government social housing sector combined.
9. The Council’s 10 Year Plan shows that social housing has an operating shortfall which is funded
from wider rates. Significant planned capital expenditure is not forecast to be recovered from
tenants, and this position is not anticipated to change in the future.
10. Five groups of options are considered in this report for the future delivery of Council’s social
housing. They are:
A. Status Quo Option
Status Quo Option 1: Status quo – social housing services delivered in-house as currently determined
by the PNCC 2015/25 10 Year Plan
B. Trust Options
Trust Option 1: Establishment of a new trust/s to operate social housing, with Council retaining
ownership of housing assets
Social Housing Working Group Report October 2015
32
5
Trust Option 2: Existing trust/s to operate social housing, with Council retaining ownership of assets
C. Council Controlled Organisation (CCO) Options
CCO Option 1: Establishment of a Council Controlled Organisation, with Council retaining ownership
of housing assets
CCO Option 2: Establishment of a Council Controlled Organisation, with most or all housing assets
owned by the CCO (gifted or sold)
CCO Option 3: Establishment of a Council Controlled Organisation, with the housing assets owned by
the CCO and the land leased
D. Other Entity Options
Other Entity Option 1: Establishment of a company with most or all housing assets owned by a
Council-owned CCTO
Other Entity Option 2: Establishment of a CCTO, with the housing assets leased by the company from
the Council
Other Entity Option 3: Establishment of a Public Private Partnership to develop new social housing
and operate current housing
Other Entity Option 4: Establishment of a consortium
E. Exit Options (Exit from social housing)
Exit Option 1: Establishment of a trust/s to own social housing assets and deliver services, with
housing assets sold
Exit Option 2: Establishment of a trust/s to own social housing assets and deliver services, with
assets gifted to the trust/s
Exit Option 3: Existing trust/s to own social housing assets and deliver services, with housing assets
sold
Exit Option 4: Existing trust/s to own social housing assets and deliver services, with housing assets
gifted to the trust/s
11. The options were considered against eight criteria:
1. How well the Social Housing Strategy can be delivered
2. Financial implications
3. Ability to access Community Housing Provider (CHP) registration and Income Related Rent
Subsidy (IRRS)
4. Social impact on the City as a whole
5. Impact on current and future tenants
6. Ability for Council to influence social housing delivery over time
Social Housing Working Group Report October 2015
33
6
7. Opportunity to benefit from partnerships with other contributors e.g. UCOL, private,
alternatives, Community Corrections
8. Risks and barriers
12. The working group also made some assumptions for the purposes of carrying out the analysis.
Assumption 1: The Working Group assumed that the Council’s Social Housing Strategy is the starting
point for an assessment of options and will be the basis for future decision-making.
Assumption 2: The second assumption is that the current social housing strategy is currently
delivered efficiently and effectively, and that there are not significant savings that could be made
without a compromise on agreed levels of service.
Assumption 3: It is assumed that the provision of social housing is included in the Local Government
Act 2002 definition of the purpose of local government (s10).
Assumption 4: The fourth assumption made by the Working Group is that each of the options should
be assessed as being for the future of all of Council’s social housing.
Assumption 5: The Working Group has made the assumption that where a provider is eligible (for
example, a new or existing trust) the IRRS would only be available over time (for example, as tenants
left and new tenants arrived) rather than as a blanket change.
Assumption 6: It is assumed here that, in keeping with other objectives of the Strategy, any option
implemented (including the status quo) has the opportunity to maximise the rental income by
setting rents at levels allowed by the Social Housing Strategy.
Assumption 7: The last assumption is that the analysis carried out by the working group provides a
qualitative assessment of the options as far as they are able to be known at this stage. For this
reason the criteria are ‘standalone’ and are not weighted according to judgements about their
relative importance.
13. The analysis shows that growth of Council’s social housing is unlikely without significant changes
to the quality and type of social housing recently committed to by the Council through the Social
Housing Strategy.
14. There is a complex interaction between the extent to which the Council can directly influence
social housing outcomes, and the leveraging of support and resources from other sources.
15. There is no one option which is able to be positively assessed for all the criteria. There are risks
and negative aspects associated with all of the options, and so any future action by the Council will
require decisions to be made about how these criteria are to be balanced against each other.
16. Several other issues will need to be addressed by the Council should it wish to continue exploring
the development of a new operational model. These include implications of changed ownership on
Council equity and debt, the viability of each option (for example, the availability and capacity of
potential partner organisations), community views, and the fulfilment of current commitments to
tenants and the wider community.
Social Housing Working Group Report October 2015
34
7
Part A: Terms of Reference and Context of Analysis
1. Purpose and Terms of Reference
The Social Housing Strategy was adopted by the Council in March 2015. Driver 4 of the Strategy is
“To make the most effective use of resources in supporting the provision of social housing.” One of
the actions adopted by the Council under Driver 4 is:
Delivery mechanisms are investigated and publicly consulted on and a recommended delivery
option is proposed in 2015/2016.
After discussion of this Driver and Action, the Council further resolved:
That the Chief Executive be instructed to develop a report, within six months, on delivery
options for governance, funding and growing Council’s housing stock.
The Social Housing Strategy Working Group was convened by the Community Engagement Manager
of Library and Community Services to complete this work. The members are Victoria Blockley-Powell
and Peter Grey (Library and Community Services), John Brenkley (City Networks), Keith Allan (City
Corporate) and Julie Macdonald (City Future).
This team undertook the following tasks from April – September. Its terms of Reference, agreed
with the Chief Executive, are attached as Appendix One. The objectives of the Working Group were
to:
1.
2.
3.
4.
5.
Identify potential social housing delivery options for the Council’s social housing.
Develop criteria to assess each option (e.g. cost effectiveness, outcomes for tenants).
Meet the requirements of section 17A of the Local Government Act.
Comply with section 97 of the Local Government Act.
Assess each option against the Social Housing Strategy (2015).
This assessment will be in two parts. The first is considering the social housing as it
is, and the second is considering the stated goal to increase the amount of social
housing in Palmerston North.
6. Present the outcome of the review to the Community Development Committee in
September 2015.
Two Councillor workshops were held in September and October to present and discuss the findings
of the Working Group.
2. Context of the Review
International context
While the decisions about Palmerston North City Council housing are made within a nationallydetermined policy context, it is useful to consider the broader international context and recent
history. The Working Group commissioned a short summary paper to describe the social housing
experience in Australia and Europe. This paper, by Dr Christina Severinsen, is attached as Appendix
Social Housing Working Group Report October 2015
35
8
Two. The paper highlights the trend of social housing moving out of public ownership and control
across Western nations, as well as the diverse ways in which this has occurred. It seems clear that
the range of social housing stakeholders has increased. Severinsen (2015) notes that “when
considering different mechanisms for the provision of social housing, local authorities will need to
take into account the size and age of stock, the cost of managing and maintaining the housing, and
the level of political commitment to the sector” (p. 16). Social housing assets are commodities but
also a means to meet housing need and reduce inequality. The report also notes that measurement
of the effectiveness of social housing internationally is dependent on the efficiency of individual
providers, the mechanisms chosen for delivery, and the policy objectives which have been identified.
New Zealand policy context
The Government’s Social Housing Reform Programme is designed to “get more people into quality
social housing”.1 The reforms include the sale of Housing New Zealand Corporation (HNZC) houses to
registered Community Housing Providers (CHPs). These CHPs will be eligible to receive the Income
Related Rent Subsidy (IRRS), to top up their tenants’ rent payment to the market rate. Tenants will
typically pay around 25% of their income in rent. Initially there are sales of 1,000-2,000 houses
planned (with Invercargill and Tauranga the preferred regions), with further transfers if this is
successful.
The Government has announced that it will increase the current payment of 62,000 Income Related
Rent Subsidies (IRRS) to 65,000 by 2018, and so is looking to the CHPs to provide these subsidised
places. Local authorities are not eligible to become CHPs2, and so are therefore ineligible for the IRRS
for their tenants. Many of their tenants are instead among the far greater number (290,000) of New
Zealanders who currently receive the Accommodation Supplement. The Accommodation
Supplement is means tested, and is abated depending on the level of cash assets held. As a rough
indication of the application of the means testing, a single applicant will receive no Accommodation
Supplement once their cash assets are determined to be worth $8,100 or more.
To be part of the IRRS scheme social housing applicants must be screened and their housing need
assessed by the Ministry of Social Development (MSD). It is important to note that to be eligible for
the IRRS the criteria a tenant must meet includes income and asset criteria and “be at risk or in
serious housing need”. A registered CHP may only claim IRRS for applicants referred to them from
the social housing register managed by MSD. Criteria for eligibility for social housing and the IRRS are
attached in Appendix Three. MSD is unable to provide advice as to which (if any) of the Council’s
current tenants would be eligible for the IRRS because at present these tenants do not have a
housing need. This is one of the most significant difficulties in evaluating future social housing
options because the future outcomes (for tenants) of a transfer are impossible to gauge accurately.
The following diagram illustrates the housing continuum in New Zealand. At this stage, only 33
community housing organisations around the country are registered CHPs. A commentary by law
firm Chapman Tripp notes that “significant questions remain regarding how quickly the fledgling CHP
1
2
http://www.treasury.govt.nz/statesector/socialhousing
Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Act 2013.
Social Housing Working Group Report October 2015
36
9
sector will develop and whether it will have the financial capability to deliver on the Government’s
policy objectives.”3
Figure 1: Housing Continuum (source: Community Housing Aotearoa)
Social context in Palmerston North
The adoption of the Social Housing Strategy reflects the acknowledgment by the Council that there
is an ongoing need for social housing in Palmerston North, and that the provision by the Council
contributes to meeting this need. It is extremely difficult to accurately determine the level of social
housing need in Palmerston North, due to the changing social climate and population shifts. This
section briefly discusses social housing needs and population projections in the context of future
housing provision. Council has indicated (through the Social Housing Strategy) that it wishes to
increase social housing provision in Palmerston North.
Population projections
The population of Palmerston North is steadily increasing, and the population structure is also
changing. By 2043 people aged 65 years and over will make up around 20% of the City’s population.
3
Chapman Tripp. (18 February 2015). http://www.chapmantripp.com/publications/Pages/Social-Housing-along-and-winding-path-to-the-first-sales.aspx
Social Housing Working Group Report October 2015
37
10
Figure 2: Palmerston North City Population by Age Group (2013-base medium projections)
100,000
90,000
80,000
70,000
60,000
7,800
8,400
9,200
65
years
19,800 20,100
18,600
and
17,100
12,700 14,600
over
10,900
40 -
24,200 25,600 64
23,500 22,700 23,400
24,000
18,100 20,400 22,800 24,300
years
50,000
40,000
30,000
15 39
36,100
35,900
35,800
35,700
years
35,100 32,200 32,500 31,600 33,200 34,400
20,000
10,000
0 - 14
years
16,100 16,200 16,300 16,700 16,900 17,000 16,800 17,000 17,100 17,100
0
1996
2001
2006
2013
2018
2023
2028
2033
2038
2043
At present, the Council houses around 500 tenants, with a focus on older adults. A stable (i.e. not
increasing) supply of social housing in the City will mean that a decreasing proportion of the
population will have access to social housing in the future. However, it is important to note that
while the Palmerston North City Council is a relatively large provider of social housing in Palmerston
North, it provides only a small proportion of the total housing in Palmerston North (for around 0.6%
of the current population).
Social housing need
In addition to HNZC and the Council, there are several social and emergency housing providers in
Palmerston North. They are:
x
x
x
x
x
x
x
x
x
x
Manawatu Community Housing Trust
MASH Trust
Lutheran Homes Trust Board
The Manawatu Masonic Association Trust
Abbeyfield Palmerston North
Salvation Army
Shepherds Rest
Women’s Refuge
Camellia House
Te Aroha Noa Supported Housing for Youth Programme
Social Housing Working Group Report October 2015
38
11
Combined, these housing providers provide accommodation for fewer than 200 people, for varying
lengths of time, and for different kinds of need (including emergency accommodation). There is also
a range of support available in this housing, which ranges from relatively independent living to a
greater level of support and contact. There is, therefore, a relatively small social housing sector
beyond the two large providers – HNZC (which still has over one thousand properties) and the PNCC.
In the past few years there have been some significant research reports which help build a picture of
the social housing situation in Palmerston North. A Massey University Living Lab project investigated
housing insecurity in Palmerston North, primarily through interviews with representatives from
housing organisations. This research found that “whereas literal homelessness is a relatively
uncommon occurrence in Palmerston North, both advocates and providers emphasised that a
significant proportion of the population will experience some form of temporary housing insecurity
over their life-course, whereas at-risk groups may experience chronic or prolonged housing
insecurity.”4 Key components leading to housing insecurity include financial and family insecurity,
unsuitable or inadequate accommodation, drug and alcohol abuse, and barriers to entry in the
private market. The authors noted that housing insecurity is closely connected to social exclusion.
Both this research project, and a second Living Lab research report5, noted that one and two
bedroom housing is lacking in Palmerston North, and is the type of accommodation most in demand
by groups at risk of experiencing housing insecurity. Rental returns on this type of property make it a
less attractive investment, and so the market fails to meet tenant demand. The City’s changing
(ageing) population structure will no doubt influence demand for one and two bedroom housing in
future.
Palmerston North City Council social housing
Social Housing Strategy (2015)
In March 2015 the Council adopted a new Social Housing Strategy setting out the strategic direction
for the future (see Appendix Four). The Council previously had two types of housing – social and
public. Around a decade ago, the decision was made to designate the Council’s public housing as an
investment. Prior to that, the Council’s public housing (which was originally established as social
housing through government loans) was also considered part of the Council’s social housing delivery
and was targeted to vulnerable people on low incomes who needed affordable housing. The new
Strategy removed the public housing designation and amalgamated all Council housing into a social
housing portfolio, with the following types:
1. Subsidised social housing for older people and people with long term disabilities (311 units)
This housing currently accommodates around 320 people. The housing is situated in 16 locations
around the City. The rent for this housing is set at “no more than 30% of superannuation” for older
people and “no more than 30% of the Supported Living Payment” for people with disabilities and
long term illness. Tenants may qualify for the Accommodation Supplement if their assets are below
4
Hall, J., Jones, N., Ryland, D. Russell, M., Tucker, C. & Waldteufel-Irvine, R. (2013). Down and out in
Palmerston North? Social sector perspectives on homelessness and housing insecurity. Working Paper, Massey
University.
5
Rylan, D. and Tucker, C. (2014). Affordable One and Two Bedroom Housing Development in Palmerston North:
Incentives and Barriers. Working Paper, Massey University.
Social Housing Working Group Report October 2015
39
12
the asset threshold. Typically rent for a one bedroom unit is set at $94 per week (25% of the single
rate of superannuation).
If the tenant’s assets are over the threshold set by Work and Income then the tenant receives no
Accommodation Supplement and their rent is set at a maximum of 30% of the relevant source of
income (Superannuation or Supported Living Payment) for these tenants (see Table 1). The payment
of the Accommodation Supplement to tenants (where rents are set at 30% of the various benefits)
means than tenants pay a ‘real’ rent of around 27% of their net benefit. The thresholds set by Work
and Income for the payment of the Accommodation Supplement mean that only a small amount of
rent is ‘eligible’ for the 70c in the dollar subsidy, and so any available subsidy is relatively small.
Table 1: Percentage of net income paid by (individual) tenants eligible for the Accommodation
Supplement
Source of Income
Net income
Maximum rent
set by PNCC
(30%)
Accommodation
Supplement
$112.36
$78.79
Entry threshold
for
Accommodation
Supplement
$96.00
$66.00
$11.45
$8.95
Rent minus AS
(and percentage
of
income
(rounded))
$100.91 (27%)
$69.84 (27%)
Superannuation (single)
Supported
Living
Payment (18+ years)
$374.53
$262.64
Jobseeker Support
(25+ years)
$210.13
$63.04
$53.00
$7.03
$56.01 (27%)
The asset thresholds for entitlement to the Accommodation Supplement begin at $8,100 for an
individual tenant. Palmerston North City Council housing (along with all other Council housing that
we are aware of) has asset thresholds which are higher than this, with an individual tenant able to
have up to $40,000 of cash assets. This means that social housing providers (including the PNCC)
may have a mix of tenants who are and are not eligible for the Accommodation Supplement. For this
reason, the Social Housing Strategy determines that the rents are set at a maximum of 30% of the
applicable benefit.
Some of this subsidised Council housing is subject to a Memorandum of Understanding between the
Council and MASH Trust. MASH manages the tenancies of their clients in two of the social housing
complexes (Cardrona Close and Wood Street), but the Council is responsible for maintenance and
other services.
2. Non-subsidised social housing (72 units)
This housing is located in three complexes – Rakaia Place, Waiheke Court, and Achilles Court. Around
a quarter of this housing stock has three bedrooms, and the remainder has one or two bedrooms.
There are currently around 208 tenants in this housing and they are charged market rentals.
3. Subsidised social housing for people on low incomes (up to 20 units)
This housing is also available in the three non-subsidised complexes (and is included in the numbers
given under 2.). Again, this rent is “no more than 30% of Jobseeker Support, or other relevant
benefit”. Table 1 shows the relevant rent and payment of Accommodation Supplement to these
tenants.
Social Housing Working Group Report October 2015
40
13
The changes to Council’s social housing in the Social Housing Strategy were made in recognition that
the Council was committed to providing social housing in the City, but was unable to afford
significant new capital development.
Appendix Five has a summary of actual rents charged, including the related percentage of the
relevant net benefit. It also includes examples of the impact on possible changes to the rents
charged.
The principles guiding the provision of this housing (quoted from the Strategy) are:
Supported social housing
The Council will provide social support for all of its social housing tenants through another agency.
The current level of support to social housing tenants provides a minimal level of contact with
tenants and does not allow for any consistent level of social support. The experience of other social
housing providers in the City indicates that social support, in addition to attention to the ‘mechanics’
of providing maintenance and tenancy services, provides social benefits to both tenants and the
wider community. This could include, for example, linking tenants to support agencies before
identified issues become serious.
Warm and safe social housing
The Council will work with He Kainga Oranga, the Housing and Health Research Programme, to
adopt the Warrant of Fitness scheme. This project is based at the Otago Medical School, and has now
been extensively trialled in Auckland, Christchurch, Wellington, Tauranga and Dunedin. These City
Councils have all been involved in the trial, along with ACC and the New Zealand Green Building
Council. The WOF will provide a benchmark against which Council can gauge its current performance
and establish social housing standards for the future. The adoption of the WOF scheme will show
leadership by the Council for the whole rental housing market in Palmerston North.
Stable social housing
The inclusion of the (currently designated) public housing in the social housing service delivery will
potentially increase the stability of some rental tenancies. The market rentals being charged for
these units will mean that there is no need to constantly assess eligibility of tenants (as HNZC is now
doing) and this will promote stability. It will be in the landlord’s (currently Council’s) interest to have
at least some long term tenants in this housing.
Housing that meets needs
The Council’s role in providing affordable and appropriate social housing is an important one in the
social housing sector and this is affirmed. The impact of the removal of this provision on the housing
market would be significant. There is ongoing research and community sector identification of the
ongoing need for a greater provision of social housing in Palmerston North.6
6
For example: Hall, J., Jones, N., Ryland, D. Russell, M., Tucker, C. & Waldteufel-Irvine, R. (2013). Down and out
in Palmerston North? Social sector perspectives on homelessness and housing insecurity. Working Paper,
Massey University.
Social Housing Working Group Report October 2015
41
14
The addition of the current public housing to the social housing activity will enable a greater level of
social housing need to be met, without taking over the role of the state housing provider. The Council
has clearly indicated the desire to provide a ‘back up’ to HNZC, and the goals here meet that
objective by providing a range of social housing options that complement the role of HNZC.
The Council will also endeavour to increase its provision of social housing. It will continue working
with the social housing sector in the City to advocate for further social housing support from central
government. The Council will also work actively to facilitate the development of wider affordable
housing measures and initiatives.
Operation of Council’s housing
Library and Community Services is the ‘lead unit’ for Council’s housing. This means staff from that
unit are responsible for the overall achievement of the Social Housing Strategy, although various
activities within the Strategy sit with other parts of Council. City Networks has oversight of the social
housing properties themselves and has Residential Property Officers (around 1.5 FTE) who provide
tenancy services. Maintenance services are subcontracted to City Enterprises. New provisions in the
Social Housing Strategy, such as the tenant selection panel and the Warrant of Fitness
implementation, are being carried out by staff in City Networks and Library and Community Services.
Management Team is currently considering the best configuration for staffing to support the
implementation of the Social Housing Strategy.
The consultation on the Draft Social Housing Strategy included tenant meetings and feedback was
received from around a third of the social housing tenants at that time.7 In addition, City Networks
undertakes a regular survey of tenants to find out how satisfied they are with various aspects of the
social housing service. Tenants are asked to provide feedback on safety and security, maintenance,
grounds and access to assistance, as well as their overall satisfaction. Ninety four percent of tenants
who responded to the survey were either ‘Very satisfied’ or ‘Quite satisfied’ with their housing
overall. Until the adoption of the new Social Housing Strategy, staff provided some informal support
to tenants, but this contact depended on need at the time, and could not be provided consistently to
all tenants (due to resources). The Social Housing Strategy provides for an additional social support
to be provided through a contracted external agency.
The 10 year plan shows that social housing has an operating shortfall which is funded from wider
rates. Significant planned capital expenditure is not forecast to be recovered from tenants, and this
position is not anticipated to change in the future. (See Appendix Five for financial details, and also
Part C, Section 7).
Other local authorities
Palmerston North City Council is now the fifth largest local authority social housing provider (after
Christchurch, Wellington, Auckland and Dunedin). In 2014 the Centre for Research Evaluation and
Social Assessment (CRESA) carried out a survey of local government social housing stock. To
augment this research, a further report was commissioned by the Working Group to further describe
7
A detailed report of submissions is included in the Community Development Committee order paper for the
th
9 March 2015.
Social Housing Working Group Report October 2015
42
15
the various social housing models being investigated and implemented around the country. This
report, by Third Bearing, is attached as Appendix Six, and a brief summary is provided here:
Local authorities can be divided into six main groups:
1. No provision – social housing sold off to a community provider
Upper Hutt City Council sold its small holding of pensioner housing to a social housing provider
(Sisters of Compassion), who were able to integrate this as part of their larger aged care
accommodation portfolio (gaining benefits of scale that the Council was unable to achieve itself).
Hamilton City Council decided in late 2014 to sell its pensioner housing stock to social housing
providers, and is in the process evaluating tenders to do so. Hamilton already has a number of social
housing providers who operate at a scale that makes this feasible, although it is noted that the
Council will require new owners to commit to social housing provision for only ten years.
2. Support innovative trusts alongside small Council provision
Masterton District Council provides a small number of pensioner housing (74 units), with Masterton
Trust House providing significantly more. The Trust purchased a large number of HNZC properties
and has extended this provision to now cover over 500 residential properties in the area.
The focus of Queenstown Lakes District Council is on affordable housing, with the lack of suitable
accommodation for key workers recognised as a significant barrier to regional economic
development. The Council also owns and delivers a very small number of pensioner housing units in
Wanaka and Arrowtown.
3. Set up CCO to act as developer & deliverer for Council (and others)
Both Lower Hutt City Council and Manawatu District Council have established council controlled
organisations to undertake their social housing provision. Both the ownership and management of
the provision have been transferred. Rangitikei District Council has recently mooted the Manawatu
Community Trust owning and/or managing its pensioner housing assets.
4. Retain ownership, but have someone else manage them
Porirua City Council has a small number of social housing assets (fewer than 30), making in-house
delivery of these services unviable. The Council retains ownership but contracted out management
(asset and tenancy) to City Housing, a division of Wellington City Council, in 2013.
Whangarei District Council has a larger number of units (165), but has taken a similar approach to
Porirua. It contracts out tenancy and asset management of its units to the Northland Masonic Trust,
which already holds a large number of pensioner units.
Nelson contracts out the asset and tenancy management of its pensioner housing to Opus
International Consultants. All inquiries for housing and subsequent matters are managed by Opus.
Social Housing Working Group Report October 2015
43
16
5. Manage in-house through single team (assets and tenancy)
Both the New Plymouth and Rotorua District Councils have recently undertaken reviews of the
management of their social housing portfolios and decided to continue in-house provision. In
Rotorua this has always been managed by a single team (as part of the property services group).
New Plymouth’s provision had been split across the community and property group, but following
the review they are looking to implement a shift to provision through a single in-house team.
6. Manage in-house with roles carried out by a range of teams
A number of Councils split the delivery across two internal teams. In the case of Napier and the Far
North District Council the teams involved are community services (who handle the tenancy
management aspects) and the property services teams (who manage the asset and related property
services). A range of associated services are also contracted out (such as grounds maintenance).
Note:
Several Councils have announced planned developments for their social housing. The most recent of
these appear to have been deliberately configured to qualify for the IRRS, by partnering with
another independent, qualifying CHP. As discussed previously, qualification for the IRRS is very
uncertain and unlikely to be achieved quickly. The extent of Council control and the potential for
future risk, therefore, need to be considered alongside any proposed future reliance on the IRRS.
The various options considered around the country illustrate the complexity of the issues to be
considered, and highlight that this is much more than just a financial assessment.
Social Housing Working Group Report October 2015
44
17
Part B: Options Identification, Assumptions and Criteria
3. Options for Future Delivery
The Working Group identified the following five groups of options for future social housing delivery.
While there may be further permutations possible, these options represent the main future
directions the Council could take to implement the Social Housing Strategy.
A. Status Quo Option
Status Quo Option 1: Status quo – social housing services delivered in-house as currently determined
by the PNCC 2015/25 10 Year Plan.8
B. Trust Options
A charitable trust is set up under the Charitable Trusts Act 1957 and must have charitable aims. It will
have a registered trust deed and has a separate legal identity distinct from its members or trustees.
Trust Option 1: Establishment of a new trust/s to operate social housing, with Council retaining
ownership of housing assets
Trust Option 2: Existing trust/s to operate social housing, with Council retaining ownership of assets
C. Council Controlled Organisation (CCO) Options
A CCO is a council organisation (company or other entity) established to undertake activities on
behalf of one or more councils, with 50% or more owned or in control of the council/s. Councils must
use the special consultation procedure if they intend establishing a new CCO.
CCO Option 1: Establishment of a Council Controlled Organisation, with Council retaining ownership
of housing assets
CCO Option 2: Establishment of a Council Controlled Organisation, with most or all housing assets
owned by the CCO (gifted or sold)
CCO Option 3: Establishment of a Council Controlled Organisation, with the housing assets owned by
the CCO and the land leased
D. Other Entity Options
A Council Controlled Trading Organisation (CCTO) is a CCO that operates a trading undertaking for
the purpose of making a profit. A Public Private Partnership is a long-term contract between a public
sector organisation and a private company, or consortium of companies, and typically includes the
design, construction, maintenance, financing, and subsequent operation of an infrastructure asset.
Other Entity Option 1: Establishment of a company with most or all housing assets owned by a
Council-owned CCTO
8
Note: This would not preclude the reorganisation of in-house delivery determined by Council management.
Social Housing Working Group Report October 2015
45
18
Other Entity Option 2: Establishment of a CCTO, with the housing assets leased by the company from
the Council
Other Entity Option 3: Establishment of a Public Private Partnership to develop new social housing
and operate current housing
Other Entity Option 4: Establishment of a consortium
E. Exit Options (Exit from social housing)
Exit Option 1: Establishment of a trust/s to own social housing assets and deliver services, with
housing assets sold
Exit Option 2: Establishment of a trust/s to own social housing assets and deliver services, with
assets gifted to the trust/s
Exit Option 3: Existing trust/s to own social housing assets and deliver services, with housing assets
sold
Exit Option 4: Existing trust/s to own social housing assets and deliver services, with housing assets
gifted to the trust/s
Note:
Some of these options are structurally similar but have small but important variations; for example,
the trust options (new or existing) vary according to the degree of Council control - a CCO could take
the form of a trust with ongoing Council control, whereas ‘handover’ to an existing trust would mean
a loss of Council influence in the future. They have been analysed separately because of these
variations.
Social Housing Working Group Report October 2015
46
19
4. Criteria for Analysis
A set of criteria were developed to assess each of the options identified. Most of the criteria do not
enable a simple ‘yes/no’ analysis, but rather provide the opportunity for a more descriptive appraisal
of how a particular option measures up. The Working Group has assumed that a negative
assessment against a given criterion is not a ‘deal breaker’ but rather helps to inform the Councillors
about the options being assessed. It will be the task of Councillors to assess the information
provided to reach a decision about the most desirable option or options.
1. How well the Social Housing Strategy can be delivered
Councillors adopted the Social Housing Strategy earlier in 2015 after prolonged and detailed
consideration of the issues involved. The first criterion is a consideration of how well the Strategy
could be delivered under any of the options. While, as we have stated above, there are no ‘deal
breaker’ criteria, the analysis here does reflect that the Social Housing Strategy is a formally adopted
direction of Council reached after lengthy engagement and consultation. The ability of any option to
deliver on the Strategy is therefore an extremely important consideration.
2. Financial implications
The financial implications of each option have been assessed, both for the Council, and for any other
entity involved. This assessment includes the impact on rates, and the ongoing costs of running
social housing (maintenance and renewal costs). It should be noted that many of the financial
implications will only become clear on further investigation of any given option.
3. Ability to access Community Housing Provider (CHP) registration and Income Related Rent
Subsidy (IRRS)
Registered Community Housing Providers (CHPs) are eligible to receive the Income Related Rent
Subsidy (IRRS) for eligible tenants (i.e. tenants who are assessed as meeting the MSD criteria for
social housing). The IRRS is not available to local authorities or council controlled organisations.9
Assessment against this criterion simply reflects whether or not each option would enable
registration and therefore eligibility for the IRRS. The more complex issue is whether particular
tenants, or groups of tenants, would be eligible for the IRRS, and this is discussed under each option.
4. Social impact on the City as a whole
The purpose of social housing is to provide safe and affordable housing for some of the most
vulnerable people in the community. The Council acknowledges that the provision of social housing
9
The Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Act 2013 (and
subsequent regulations) excludes local authorities from eligibility as Registered Community Housing Providers
(S5 of the Regulations). This means (among other provisions):
(a) the applicant must be a community housing provider; and
(b) the applicant must not be—
(i) a local authority; or
(ii) a council-controlled organisation; or
(iii) a subsidiary of a local authority or council-controlled organisation unless the subsidiary is operating at
arm’s length from the local authority or council-controlled organisation.
Social Housing Working Group Report October 2015
47
20
contributes to creating a caring and safe community. The decision about the future provision of
social housing by the Council will have an impact on the wider community, although this impact is
difficult to quantify. Assessment of this criterion is an opportunity to describe the ways in which
each of the options might impact on the City as a whole, while acknowledging the difficulties of
doing so.
5. Impact on current and future tenants
The assessment against this criterion is fairly speculative, and has been made to highlight the
potential effects of each option. The impact of any change could vary for each individual, and could
also depend on a number of factors, including the nature of support provided, rent, certainty of
future provision, and continuity of services.
6. Ability for Council to influence social housing delivery over time
Each option has been assessed for the extent to which the Council could influence its
implementation in the future. This criterion concerns the degree to which the Council can determine
social housing activities if is not directly involved in its provision.
7. Opportunity to benefit from partnerships with other contributors e.g. UCOL, private,
alternatives, Community Corrections
Opportunities to work with other agencies have been raised by Councillors throughout discussions
about social housing provision. Again, this assessment is fairly speculative, but the opportunity to
benefit from other partnerships has been considered for each option.
8. Risks and barriers
The Working Group has described the potential risks and barriers to implementation for each option.
This analysis highlights the extent of ‘unknowns’ for each option, including the availability of
resources.
5. Assumptions
The Working Group made some assumptions in the analysis of the options listed above. This is
because all the options (except the first one) are theoretical at this stage, and so there are
potentially a number of unknown variables for each one. This statement of assumptions is made
explicitly here to enable a more complete understanding of how the criteria were applied to the
options.
Assumption 1: The Working Group assumed that the Council’s Social Housing Strategy is the starting
point for an assessment of options and will be the basis for future decision-making. The assumption
that the Social Housing Strategy expresses an agreed commitment to the current service provision is
consistent with the terms of reference. The analysis is therefore focused on a continuation (and
increase) of the level of service agreed in the Strategy. However, some options have been identified
that potentially provide a means for the service to continue independently under the auspices of
another entity (group E: Exit options). These options signal an exit for the Council from social
housing and the analysis shows their performance against the criteria as for the other options.
Social Housing Working Group Report October 2015
48
21
Assumption 2: The second assumption is that the current social housing strategy is currently
delivered efficiently and effectively, and that there are not significant savings that could be made
without a compromise on agreed quality. This assumption will presumably be reinforced or
challenged by the outcome of the cost saving review currently being undertaken (to implement an
action in the Social Housing Strategy). As a preliminary measure, the Working Group made some
informal comparisons with two local housing providers, who helpfully shared financial and service
delivery information.
Assumption 3: It is assumed that the provision of social housing is included in the Local Government
Act 2002 definition the purpose of local government (s10):
(a) to enable democratic local decision-making and action by, and on behalf of, communities;
and
(b) to meet the current and future needs of communities for good-quality local infrastructure,
local public services, and performance of regulatory functions in a way that is most cost-effective
for households and businesses.
Assumption 4: The fourth assumption made by the Working Group is that each of the options should
be assessed as being for the future of all of Council’s social housing. While this assumption doesn’t
really impact on the outcomes of the analysis of each option, it is relevant if Councillors wish to
discuss a ‘mix and match’ approach, as the analysis may change on that basis. For example, pursuing
more than one option could mean a greater administrative load and the potential loss of any
benefits identified for any of the options alone.10
Assumption 5: Some independent entities could be eligible to be registered Community Housing
Providers (CHPs) and therefore qualify for the Income Related Rental Subsidy (IRRS). However, the
guidance on eligibility for the IRRS for individuals can only be determined on a case by case basis –
the Ministry of Social Development is not able to provide advice about the eligibility of any ‘type’ of
tenant (i.e. tenants who have a particular set of characteristics) nor of any ‘hypothetical’ individual
tenant, until the point of application. The Working Group has therefore made the cautious
assumption that where a provider is eligible (for example, a new or existing trust) the IRRS would
only be available over time (for example, as tenants left and new tenants arrived) rather than as a
blanket change.11
Assumption 6: The Social Housing Strategy sets an affordability standard for social housing of less
than 30% of the tenant’s net benefit income (i.e. Superannuation, the Supported Living Payment, or
Jobseeker Support). In the past rentals have often been set below that rate. It is assumed here that,
10
Having said that, it should be noted that the status quo (Status Quo Option 1) does involve a lease
agreement between the Council and MASH for some of the social housing. However the Working Group
considers that an extension of this arrangement to include other providers, for example, is not a sufficient
departure from the status quo to be considered as another delivery model.
11
In fact that no current tenant would immediately be eligible for the IRRS, as they do not have an immediate
housing need. It is also possible that particular groups of tenants are unlikely to attract the IRRS – this is
addressed specifically under the discussion on each option.
Social Housing Working Group Report October 2015
49
22
in keeping with other objectives of the Strategy, any option implemented (including the status quo)
has the opportunity to maximise the rental income by setting rents at this level.12
Assumption 7: The last assumption is that the analysis carried out by the Working Group provides a
qualitative assessment of the options as far as they are able to be known at this stage. For this
reason the criteria are ‘standalone’ and are not weighted according to relative importance.
12
The Ministry of Social Development, Statistics New Zealand, and the Otago University Department of Public
Health (He Kainga Oranga/Housing and Health Research Programme) define affordable housing as “[t]he
proportion of households and the proportion of people within households spending more than 30 percent of
their disposable income on housing.” (Sources: http://socialreport.msd.govt.nz/economic-standardliving/housing-affordability.html; Submission to the New Zealand Productivity Commission’s Inquiry on
Housing Affordability by He Kainga Oranga/Housing and Health Research Programme, in the Department of
Public Health at the University of Otago, Wellington; http://www.stats.govt.nz/browse_for_stats/snapshotsof-nz/nz-social-indicators/Home/Standard%20of%20living/housing-affordability.aspx). The Social Housing
Strategy therefore uses up to 30% of disposable (net) income as a measure of housing affordability.
Social Housing Working Group Report October 2015
50
23
Part C: Analysis of Options, Other Considerations and Next Steps
The Social Housing Strategy sets out Council’s intention to deliver a particular social housing service,
but also to increase the amount of social housing provided in Palmerston North. Assessment of each
option includes a consideration of both the ‘current’ and ‘growth’ social housing services.
This section contains detailed analysis of each of the options identified, and then describes some of
the other considerations that may impact on any decisions made by Council. The report concludes
with brief comments about next steps.
6. Analysis of Options
This section contains a short description and analysis of each option against the criteria. Table 2 is
summary of the options analysis in the following pages.
Social Housing Working Group Report October 2015
51
Table 2: Summary of Options’ Analysis
Key:
Mostly positive
Status Quo Option
Status Quo Option 1
Trust Options
Trust Option 1: Establishment
of a trust – Council owns
assets
Mostly negative
Positive and negative
1. Delivery of social
housing strategy
2. Financial impact for
Council
3. Eligibility for IRRS
4. Social impact
5. Impact on tenants
6. Council influence
over time
7. Partnership
opportunities
8. Barriers and risks
Ongoing provision
supported; growth
unlikely
Ongoing costs reflected
in current 10 Year Plan
No
Known benefits of
continued service
provision; no increase to
social housing
No major change; likely
rent increases
Continued Council
influence
Delivery partnerships to
continue; building or
financial partnerships
less likely
Low risk for continued
social housing service;
ineligibility for CHP
registration a barrier to
increased provision
Ongoing provision
supported;
growth unlikely
Potential decrease in
Council operational
budget; renewals Council
responsibility;
determined by rent
charged
Decrease in Council
operational budget;
renewals Council
responsibility;
determined by rent
charged
Potentially yes
Known benefits of
continued service
provision; no increase to
social housing; depends
on how implemented
Some change; some
uncertainty about future;
rent increase likely
Continued Council
influence
Delivery partnerships to
continue; building or
financial partnerships
less likely
Risks in reaching
agreement; ongoing risk
of trust failure;
Potentially yes
Known benefits of
continued service
provision; no increase to
social housing; depends
on how implemented
Some change; some
uncertainty about future;
rent increase likely
Continued Council
influence
Delivery partnerships to
continue; building or
financial partnerships
less likely
Risks in reaching
agreement; ongoing risk
of trust failure
Ineligibility for CHP
registration a barrier to
increased provision; lack
of distinct advantage
over status quo; difficult
to undo
Ineligibility for CHP
registration a barrier to
increased provision; lack
of distinct advantage
over status quo; difficult
to undo
Ineligibility for CHP
registration a barrier to
increased provision; lack
of distinct advantage
over status quo; difficult
to undo
52
Trust Option 2: Existing trust – Ongoing provision
supported; growth
Council owns assets
unlikely
CCO Options
CCO Option 1: CCO
established – Council owns
assets
Ongoing provision
supported; growth
unlikely
Potential for greater
costs to Council;
determined by rent
charged
No
Known benefits of
continued service
provision; no increase to
social housing; depends
on how implemented
Some change; some
uncertainty about future;
rent increase likely
Continued Council
influence
Delivery partnerships to
continue; building or
financial partnerships
less likely
CCO Option 2: CCO
established – most or all
assets gifted or sold to CCO
Ongoing provision
supported; growth
possible
No
Continued Council
influence
Delivery partnerships to
continue; potential for
other partnerships
Ongoing provision
supported; growth
unlikely
Known benefits of
continued service
provision; possible
increase to social
housing; depends on
how implemented
Known benefits of
continued service
provision; no increase to
social housing; depends
on how implemented
Some change; some
uncertainty about future;
rent increase likely
CCO Option 3: CCO – housing
assets owned by CCO and
land leased
Decrease in Council
equity; decrease in
operational budget;
renewals CCO
responsibility; risk of
assets deteriorating
Decrease in operational
budget; renewals CCO
responsibility; risk of
assets deteriorating;
determined by rent
charged
Some change; some
uncertainty about future;
rent increase likely
Continued Council
influence
Delivery partnerships to
continue; building or
financial partnerships
less likely
Other Entity Options
Other Entity Option 1:
Establishment of Company –
assets gifted to Company
Ongoing provision
supported; growth
possible
Decrease in Council
equity; decrease in
operational budget; risk
of assets deteriorating
Probably not
Known benefits of
continued service
provision; possible
increase to social housing
depends on how
implemented
Some change; some
uncertainty about future;
rent increase likely
Less Council influence
than at present
Less relationship
between company and
Council; potential for
other partnerships
No
Probable ineligibility for
CHP registration a barrier
to increased provision;
risks in reaching
agreement; lack of
distinct advantage over
status quo; difficult to
25
1. Delivery of social
housing strategy
2. Financial impact for
Council
3. Eligibility for IRRS
4. Social impact
5. Impact on tenants
6. Council influence
over time
7. Partnership
opportunities
8. Barriers and risks
Other Entity Option 2:
Establishment of Company –
housing assets leased by
Company
Ongoing provision
supported; growth
unlikely
Decrease in Council
operational costs;
renewals Council
responsibility;
determined by rent
charged
Probably not
Known benefits of
continued service
provision; possible
increase to social
housing; depends on
how implemented
Some change; some
uncertainty about future;
rent increase likely
Less Council influence
than at present
Less relationship
between company and
Council; potential for
other partnerships
Other Entity Option 3:
Establishment of PPP – assets
owned by Council
Strategy implementation
unlikely; focus on growth
Potential for increased
costs to Council
No
Uncertain provision of
continued service
Some change; some
uncertainty about future;
rent increase likely
Depends on other parties
Opportunities for
partnerships, although
objectives may not be
shared
Other Entity Option 4:
Establishment of Consortium
Strategy implementation
unlikely
Potential for increased
costs to Council
Maybe
Uncertain provision of
continued service
Some change; some
uncertainty about future;
rent increase likely
Depends on other parties
Opportunities for
partnerships, although
objectives may not be
shared
Lack of scale; lack of
availability of other
partners; uncertainty
conveyed by the
Council’s actions
Exit Options
Other Option (Exit) 1:
Establishment of a trustassets sold to trust
Initial provision
supported; growth
possible
Reduction of Council
debt; decrease in Council
operational budget;
renewals trust
responsibility; risk of
assets deteriorating;
price uncertain
Reduction of Council
equity; decrease in
Council operational
budget; renewals trust
responsibility; risk of
assets deteriorating
Reduction of Council
debt; decrease in Council
operational budget;
renewals trust
responsibility; risk of
assets deteriorating;
price uncertain
Reduction of Council
equity; decrease in
Council operational
budget; renewals trust
responsibility; risk of
assets deteriorating
Potentially yes
Possible increase to
social housing; depends
on how implemented
Some change; some
uncertainty about future;
rent increase likely
Initial Council influence,
could decrease over time
Less relationship
between trust and
Council; potential for
other partnerships
Financial risk to trust;
seen as Council exit from
social housing; difficult to
undo; possible
expectation of further
Council support
Potentially yes
Possible increase to
social housing; depends
on how implemented
Some change; some
uncertainty about future;
rent increase likely
Initial Council influence,
could decrease over time
Less relationship
between trust and
Council; potential for
other partnerships
Seen as Council exit from
social housing; difficult to
undo; possible
expectation of further
Council support
Potentially yes
Possible increase to
social housing; depends
on how implemented
Some change; some
uncertainty about future;
rent increase likely
Initial Council influence,
could decrease over time
Less relationship
between trust and
Council; potential for
other partnerships
Financial risk to trust;
seen as Council exit from
social housing; difficult to
undo; possible
expectation of further
Council support
Potentially yes
Possible increase to
social housing; depends
on how implemented
Some change; some
uncertainty about future;
rent increase likely
Initial Council influence,
could decrease over time
Less relationship
between trust and
Council; potential for
other partnerships
Seen as Council exit from
social housing; difficult to
undo; possible
expectation of further
Council support
undo
53
Other Option (Exit) 2:
Establishment of a trust –
assets gifted to trust
Initial provision
supported; growth
possible
Other Option (Exit) 3: Existing
trust – assets sold to trust
Initial provision
supported; growth
possible
Other Option (Exit) 4: Existing
trust – assets gifted to trust
Initial provision
supported; growth
possible
Social Housing Working Group Report October 2015
Probable ineligibility for
CHP registration a barrier
to increased provision;
risks in reaching
agreement; lack of
distinct advantage over
status quo
Perception that Council
willing to privatise social
housing; lack of scale
26
A. Status Quo Option
Status Quo Option 1: Social housing services delivered in-house as currently determined
by the PNCC 2015/25 10 Year Plan
1. Delivery of the social housing strategy
Positive: The Strategy was developed with the status quo as the starting point. Implementation of
the level of service delivery described in the Strategy is within current long term budgets. The costs
are known, and there is an implementation plan in place to deliver on commitments. The Council’s
social housing is delivered by dedicated housing staff.
Negative or Unknown: There are some organisational issues which could be resolved to benefit the
smooth implementation of the Strategy. There is no capacity to increase the level of service
provision under this model in the 10 Year Plan. It is unknown whether out-sourcing the delivery of
social housing services will be more effective than internal delivery.
2. Financial – impact/consequences
Positive: The costs of the current social housing delivery are known and allowed for in financial
plans. The cost of the current level of service is known and ‘mandated’ by the 10 Year Plan.
Continued ownership and provision will mean Council will be investing in its own assets. The current
level of equity will be retained. There is some limited ability to increase income by raising rents to
the 30% of income threshold.
Negative/unknown: There will be an increased cost to ratepayers in the future as the housing stock
ages. It is unlikely that there will be external funding available due to the national focus on Auckland
and Christchurch. There is no current financial provision for an increase in service delivery and the
current model is unlikely to increase financial resources to allow additional growth.
3. Ability to access IRRS and Community Housing Provider registration
Positive: Negative/Unknown: Local government is excluded from eligibility. (See Housing Restructuring and
Tenancy Matters (Community Housing Provider) Regulations 2014).
4. Social impact on the City
Positive: The current social housing service provides known benefits to the City. There will be a
continued provision of stable social housing in the City, and the opportunity to respond to future
changes by other social housing providers (including HNZC).
Negative/Unknown: Council could be seen as decreasing responsibility for older people (in terms of
a decrease in percentage of older people housed) and as unresponsive to population trends. This
continued provision could be seen as going against the intent of the national social housing reform
programme (which disincentivises local government from being social housing providers).
5. Impact on current and future tenants
Positive: Tenants won’t have to deal with any further major changes to the social housing provision
of the Council. The funding allocated for social support will increase the level of service and the
positive changes (such as the WOF) established by the Strategy will continue.
Negative/Unknown: The Council’s limited financial scope for further development means that
opportunity will be lost for improved service and growth (although this option does not preclude
decisions to make changes to delivery in the future). Rent rises are likely, as the Strategy allows for
them, to maximise the amount of rent paid. As a proportion of the population housed by the
Council will gradually decline as time passes.
6. Ability for Council to influence social housing delivery over time
Positive: Council will be able to change and adapt services in the future. Future developments could
be linked with other Council strategies, such as the type of development encouraged in the District
Plan or funding for other providers.
Negative/Unknown: The Council is a relatively small housing provider with limited influence over
social housing overall.
Social Housing Working Group Report October 2015
54
27
7. Opportunity to benefit from partnerships
Positive: There are already partnership relationships in place and being developed (e.g. with MASH
and future social support providers).
Negative/Unknown: Scope for partnerships for maintenance is limited by the agreement with City
Enterprises.
8. Risks and barriers
The Council is ineligible to become registered as a CHP, and so is therefore unable to access the
IRRS.
It seems unlikely that the Council will be able to extend its social housing provision.
Summary
The Council’s social housing has a high level of satisfaction amongst tenants and provides a valuable
service in the community for some of the most vulnerable people. The current level of provision is
allowed for in the 10 Year Plan, and there is some capacity to increase rental income (in accordance
with the Social Housing Strategy). Status Quo Option 1 provides a very low risk means of providing a
continuation of the Council’s current social housing service, but will not enable growth.
Social Housing Working Group Report October 2015
55
28
B. Trust Options
Trust Option 1: Establishment of a new trust/s to operate social housing, with Council
retaining ownership of housing assets
1. Delivery of the social housing strategy
Positive: The trust deed will reflect the intent of the Social Housing Strategy. The retention of assets
by the Council means the purpose of the trust will remain focused on this activity.
Negative/Unknown: It is possible that there could be disagreement between the Council and the
trust about what it means to deliver on the Strategy. The trust is unlikely to achieve an increase in
social housing because it does not have assets to borrow against. Delivery on the Strategy will be
dependent on the availability of resources, and this is likely to be the subject of ongoing
negotiation. Council will be required to provide ongoing monitoring and support.
2. Financial – impact/consequences
Positive: The debt: equity ratio will remain unchanged, but over time there will be a net gain to the
Council if the trust is able to access the IRRS for tenants (see 3.). The level of IRRS subsidy could
positively impact on the financial operation.
Negative/Unknown: It could be difficult to raise external grants funding if the housing is still
considered ‘Council housing’. Renewal costs will remain with the Council, so there could be
unexpected (higher) costs if the housing is not run well, or there are other unexpected events. The
trust will be required to pay for maintenance (replacing appliances, painting, and repairs) and
possibly capital items, depending on the securing of adequate income. The basis of rental payment
for the buildings will need to be decided, and so will the level of service expected by the Council of
the trust. The specific details of the financial arrangement will need further investigation.
3. Ability to access IRRS and Community Housing Provider registration
Positive: The trust will be eligible to apply for registration.
Negative/Unknown: No subsidy will be available immediately upon registration – it will only be for
new eligible tenants. It is unknown whether any or all tenants likely to be housed by the trust will
be eligible for the subsidy. If the trust only houses eligible tenants then this could impact on the
achievement of the Social Housing Strategy.
4. Social impact on the City
Positive: Tenants will be housed in accordance with the Strategy, thus continuing the current level
of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and the resources and capacity of the trust.
5. Impact on current and future tenants
Positive: The trust will have a dedicated social purpose and expertise in housing. Tenants will have
the security of knowing that the Council still owns the housing assets. There is potential for tenant
involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the trust is
unable to implement elements of the Strategy on the available budget. Rent rises are likely, as the
Strategy allows for them and a trust is likely to want to maximise the amount of rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
service itself are dependent on the quality of the new trust. There is also a potential for increased
tenant ‘churn’ if there is increased financial pressure on the trust.
6. Ability for Council to influence social housing delivery over time
Social Housing Working Group Report October 2015
56
29
Positive: Council owns the assets and so continues to have the opportunity to influence the
activities of the trust.
Negative/Unknown: There will be less control by the Council over the service provided. There could
be disagreements between the Council and the trust about how the service should be provided in
the future. The trust could change the deed. Future influence depends on Council’s future
commitment to social housing. There is a risk that the trust could withdraw and the Council would
be in a position of having to choose another model to replace it.
7. Opportunity to benefit from partnerships
Positive: This option does provide a partnership opportunity for the Council. There are potential
further partnerships between the trust and other parties.
Negative/Unknown: The trust has no assets so it may be difficult to develop financial partnership
relationships.
8. Risks and barriers
The main risk of this option is in the negotiation of the relationship between the Council and the
trust, and of the potential for a trust to withdraw from the arrangement if not financially viable.
Grant funders may consider this to be ‘Council housing’ and so be less likely to support it.
Summary
This option provides the opportunity for the Council to continue implementing the Social Housing
Strategy. The operational costs to Council could decrease (if tenants become eligible for the IRRS),
but there would be ongoing responsibility for renewals. The success of this option will depend
largely on the resources and capacity of the trust, and the willingness of its members to contribute
to the ongoing provision of Council’s agreed direction.
Trust Option 2: Existing trust/s to operate social housing, with Council retaining ownership
of assets
1. Delivery of the social housing strategy
Positive: Council has already demonstrated the ability to work with a trust (MASH Trust) in this way.
The Strategy will form the basis for the relationship between the trust and the Council. It is likely
that the trust has expertise and experience in this activity, and therefore capacity to deliver on the
Strategy.
Negative/Unknown: There may not be a suitable trust willing or able to implement this option
(particularly at the scale required). It is possible that there could be disagreement between the
Council and the trust about what it means to deliver on the Strategy. The trust is unlikely to achieve
an increase in social housing because it does not have assets to leverage additional funding.
Capacity to increase provision will depend on the trust’s existing assets and experience, and on the
willingness of the Council to support it financially. Delivery on the Strategy will be dependent on the
availability of resources, and this is likely to be the subject of ongoing negotiation. Council will be
required to provide ongoing monitoring and support.
2. Financial – impact/consequences
Positive: The debt to equity ratio will remain unchanged, but over time there will be a net gain to
the Council if the trust is able to access the IRRS for tenants (see 3.). The level of IRRS subsidy could
positively impact on the financial operation of the trust.
Negative/Unknown: Renewal and other costs will remain with the Council, so there could be
unexpected (higher) costs if the housing is not run well, or there are other unexpected events. It
could be difficult to raise external grants funding if the housing is still considered ‘Council housing’,
and there may not be an incentive to do so. The trust will be required to use surplus funds to
replace capital items, however the specific details of the financial arrangement (e.g. rent payment)
would need further investigation.
3. Ability to access IRRS and Community Housing Provider registration
Positive: The trust will be eligible to apply for registration.
Social Housing Working Group Report October 2015
57
30
Negative/Unknown: No subsidy will be available immediately upon registration – it will only be for
new eligible tenants. It is unknown whether any or all tenants likely to be housed by the trust will
be eligible for the subsidy. If the trust only houses eligible tenants then this could impact on the
achievement of the Social Housing Strategy.
4. Social impact on the City
Positive: Tenants will be housed in accordance with the Strategy, thus continuing the current level
of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and on the resources and capacity of the trust.
5. Impact on current and future tenants
Positive: The trust will have a dedicated social purpose and expertise in housing. Tenants will have
the security of knowing that the Council still owns and manages the housing assets. There is
potential for tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) public uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the trust is
unable to implement elements of the Strategy on the available budget. Rent rises are likely, as the
Strategy allows for them and a trust is likely to want to maximise the amount of rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
service itself are dependent on the quality of the new trust.
6. Ability for Council to influence social housing delivery over time
Positive: Council owns the assets and so continues to have the opportunity to influence the
activities of the trust.
Negative/Unknown: There will be less control by the Council over the service provided. There could
be disagreements between the Council and the trust about how the service should be provided in
the future. The trust could change the deed. Future influence will depend on Council’s future
commitment to social housing. There is a risk that the trust could withdraw and the Council will be
in a position of having to choose another model to replace it.
7. Opportunity to benefit from partnerships
Positive: This option does provide a partnership opportunity for the Council. There are potential
further partnerships between the trust and other parties.
Negative/Unknown: The trust will have no assets so it may be difficult to develop financial
partnership relationships.
8. Risks and barriers
The main risk of this option is in the negotiation of the relationship between the Council and the
trust, and the ongoing potential for a trust to withdraw from the arrangement. Grant funders may
consider this to be ‘Council housing’ and so be less likely to support it.
Summary
This option provides the opportunity for the Council to continue implementing the Social Housing
Strategy. The operational costs to Council could decrease (if tenants become eligible for the IRRS),
but there will be ongoing responsibility for renewals. The success of this option will depend largely
on the resources and capacity of the trust, and the willingness of its members to contribute to the
ongoing provision of Council’s agreed direction.
Social Housing Working Group Report October 2015
58
31
C. Council Controlled Organisation (CCO) Options
CCO Option 1: Establishment of a Council Controlled Organisation, with Council retaining
ownership of housing assets
1. Delivery of the social housing strategy
Positive: The Council will have a high level of control because it will write the deed. The delivery of
the Strategy will be achieved because it will be the core business of the CCO and the specific
expertise of the directors.
Negative/Unknown: There could potentially be disagreements between the CCO and the Council
about how the Strategy should be implemented. The CCO model is unlikely to enable growth of
social housing unless the Council decides to increase its financial contribution.
2. Financial – impact/consequences
Positive: There may be potential to fundraise from other organisations.
Negative/Unknown: It could be difficult to raise external grant funding if the housing is still
considered ‘Council housing’. There may be a greater cost to Council because there will need to be
CCO liaison support provided by the Council, and Council will still be required to fund operational
costs. The CCO will be required to pay for maintenance (replacing appliances, painting, and repairs)
and possibly capital items, depending on the securing of adequate income. Assets are therefore at
risk of being run down if the day to day operational demands of the service are prioritised over long
term planning. The financial impact on the Council will depend on the nature of a lease (or other)
agreement with the CCO. Renewal costs will remain with the Council, so there could be unexpected
(higher) costs if the housing is not run well, or there are other unexpected events. The specific
details of the financial arrangement will need further investigation.
3. Ability to access IRRS and Community Housing Provider registration
Positive: Negative/Unknown: The CCO will not be eligible to be a registered CHP, and so will not qualify for
the IRRS.
4. Social impact on the City
Positive: Tenants will be housed in accordance with the Strategy, thus continuing the current level
of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and the resources and capacity of the CCO.
5. Impact on current and future tenants
Positive: The CCO has a dedicated social purpose and expertise in housing. Tenants will have the
security of knowing that the Council still owns and manages the housing assets. There is potential
for tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the CCO is
unable to implement elements of the Strategy on the available budget. Rent rises are likely, as the
Strategy allows for them and the CCO is likely to want to maximise the amount of rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
service itself are dependent on the quality of the CCO.
6. Ability for Council to influence social housing delivery over time
Positive: Council owns the assets and so continues to have the opportunity to influence the
activities of the CCO.
Negative/Unknown: There will be less control by the Council over the service provided than there is
at present. There could be disagreements between the Council and the CCO about how the service
should be provided in the future. Future influence depends on Council’s future commitment to
social housing.
7. Opportunity to benefit from partnerships
Social Housing Working Group Report October 2015
59
32
Positive: This option does provide a partnership opportunity for the Council. There are potential
further partnerships between the CCO and other parties.
Negative/Unknown: The CCO has no assets so it may be difficult to develop financial partnership
relationships.
8. Risks and barriers
The resources available to support this model will primarily be provided by the Council, although
there could be some ability to raise additional external grants funding. The main barrier to the
implementation of this model is the ineligibility of a CCO to register as a CHP.
Summary
The formation of a CCO will enable the Council to exert a high level of influence over the ongoing
provision of its social housing. However, this model could be more costly, and is unlikely to achieve
growth of social housing.
CCO Option 2: Establishment of a Council Controlled Organisation, with most or all
housing assets owned by the CCO (gifted or sold)
1. Delivery of the social housing strategy
Positive: The Council will have a high level of control because it will write the deed. The delivery of
the Strategy will be achieved because it will be the core business of the CCO and the specific
expertise of the directors. A CCO with assets would have leverage to borrow and so could
potentially increase the level of provision. This could be an explicit expectation.
Negative/Unknown: It is possible that there could be disagreement between the Council and the
CCO about what it means to deliver on the Strategy. Delivery on the Strategy will be dependent on
the availability of resources, and this is likely to be the subject of ongoing negotiation. The Council
will not have the same amount of ‘leverage’ over the activities of the CCO because it does not own
the assets. Over time there could be less implementation of the Strategy if circumstances change.
2. Financial – impact/consequences
Positive: Renewal costs will be the responsibility of the CCO. The Council could still provide financial
support but the current operational costs will decrease. The CCO will have assets to enable
borrowing.
Negative/Unknown: There will be a loss of Council equity and possibly a decrease to its credit rating.
There may be other additional costs to the Council because there will need to be CCO liaison
support. It could be difficult to raise grants funding if social housing is still perceived as ‘Council
housing’. Assets are at risk of being run down if the day to day operational demands of the service
are prioritised over long term planning. If the CCO finances do not go well there could be an
expectation of more Council support.
3. Ability to access IRRS and Community Housing Provider registration
Positive: Negative/Unknown: The CCO will not be eligible to be a registered CHP, and so will not qualify for
the IRRS.
4. Social impact on the City
Positive: Tenants will be housed in accordance with the Strategy, thus continuing the current level
of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and the resources and capacity of the CCO.
5. Impact on current and future tenants
Positive: The CCO has a dedicated social purpose and expertise in housing. There is potential for
tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the CCO is
unable to implement elements of the Strategy on the available budget. Rent rises are likely, as the
Social Housing Working Group Report October 2015
60
33
Strategy allows for them and the CCO is likely to want to maximise the amount of rent paid. There
could be longer term uncertainty about social housing provision. Standard of living, and the service
itself, are dependent on the quality of the CCO.
6. Ability for Council to influence social housing delivery over time
Positive: The CCO is accountable to the Council, and so the Council will continue to have the
opportunity to influence its activities.
Negative/Unknown: There will be less control by the Council over the service provided than there is
at present. There could be disagreements between the Council and the CCO about how the service
should be provided in the future. Future influence depends on Council’s future commitment to
social housing.
7: Opportunity to benefit from partnerships
Positive: This option does provide a partnership opportunity for the Council. There are potential
further partnerships between the CCO and other parties.
Negative/Unknown: 8. Risks and barriers
The main barrier to the implementation of this model is the ineligibility of a CCO to register as a
CHP. The ability of the CCO to raise additional funding, and operate social housing according to its
deed, will determine the effectiveness of this model. There will be a decrease in Council equity. This
option may also be difficult to ‘undo’.
Summary
The formation of a CCO will enable the Council to exert a high level of influence over the ongoing
provision of its social housing, although to a lesser extent than if the assets are retained by the
Council. The influence could decrease over time. This option will retain Council control of social
housing. Effective implementation will be dependent on agreement between the CCO and the
Council about expectations for delivery of the Strategy.
CCO Option 3: Establishment of a Council Controlled Organisation, with the housing assets
owned by the CCO and the land leased
1. Delivery of the social housing strategy
Positive: The Council will have a high level of control because it will write the deed. The delivery of
the Strategy will be achieved because it will be the core business of the CCO and the specific
expertise of the directors.
Negative/Unknown: It is possible that there could be disagreement between the Council and the
CCO about what it means to deliver on the Strategy. Delivery on the Strategy will be dependent on
the availability of resources, and this is likely to be the subject of ongoing negotiation. Growth is
unlikely, although building on the existing land would be possible.
2. Financial – impact/consequences
Positive: Renewal costs will be the responsibility of the CCO. The Council could still provide financial
support but the operational budget will be less. The CCO has housing assets to borrow against.
Negative/Unknown: It could be difficult to fundraise if social housing is still perceived as ‘Council
housing’. Assets are at risk of being run down if the day to day operational demands of the service
are prioritised over long term planning. If the financial management is difficult there could be an
expectation of more Council support. The financial impact on the Council will depend on the nature
of a lease agreement with the CCO, but there will be some decrease in equity.
3. Ability to access IRRS and Community Housing Provider registration
Positive: Negative/Unknown: The CCO will not be eligible to be a registered CHP, and so will not qualify for
the IRRS.
4. Social impact on the City
Positive: Tenants will be housed in accordance with the Strategy, thus continuing the current level
Social Housing Working Group Report October 2015
61
34
of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and on the resources and capacity of the CCO.
5. Impact on current and future tenants
Positive: The CCO has a dedicated social purpose and expertise in housing. There is potential for
tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the CCO is
unable to implement elements of the Strategy on the available budget. Rent rises are likely, as the
Strategy allows for them and the CCO is likely to want to maximise the amount of rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
service itself are dependent on the quality of the CCO.
6. Ability for Council to influence social housing delivery over time
Positive: The CCO is accountable to the Council, and so the Council continues to have the
opportunity to influence its activities.
Negative/Unknown: There will be less control by the Council over the service provided than there is
at present. There could be disagreements between the Council and the CCO about how the service
should be provided in the future. Future influence depends on Council’s future commitment to
social housing.
7. Opportunity to benefit from partnerships
Positive: This option does provide a partnership opportunity for the Council.
Negative/Unknown: There may be potential further partnerships between the CCO and other
parties.
8. Risks and barriers
The main barrier to the implementation of this model is the ineligibility of a CCO to register as a
CHP. The ability of the CCO to raise additional funding, and operate social housing according to its
deed, will determine the effectiveness of this model. There will be some decrease in Council equity.
This option may also be difficult to ‘undo’.
Summary
The formation of a CCO will enable the Council to exert a high level of influence over the ongoing
provision of its social housing, although to a lesser extent than if all the assets were retained by the
Council. The influence could decrease over time. This option will retain Council control of social
housing. Effective implementation will be dependent on agreement between the CCO and the
Council about expectations for delivery of the Strategy.
Social Housing Working Group Report October 2015
62
35
D. Other Entity Options
Other Entity Option 1: Establishment of a company with most or all housing assets owned
by a Council Controlled Trading Organisation (CCTO)
1. Delivery of the social housing strategy
Positive: The Council will establish the company. The delivery of the Strategy will be the core
business of the company and the specific expertise of the directors. The CCTO could achieve a
growth in social housing.
Negative/Unknown: It is possible that there could be disagreement between the Council and the
company about what it means to deliver on the Strategy. Delivery on the Strategy will be dependent
on the availability of resources, and this is likely to be the subject of ongoing negotiation.
2. Financial – impact/consequences
Positive: All costs will be the responsibility of the CCTO. The Council could still provide financial
support.
Negative/Unknown: Assets are at risk of being run down if the day to day operational demands of
the service are prioritised over long term planning. If the financial management is difficult there
could be an expectation of more Council support. There will be a decrease in Council equity, and
possibly a decrease to its credit rating.
3. Ability to access IRRS and Community Housing Provider registration
Positive: Negative/Unknown: The company will not be eligible to be a registered CHP, and so will not qualify
for the IRRS. This will need further investigation depending on how the company is structured.
4. Social impact on the City
Positive: Tenants will be housed in accordance with the Strategy, thus continuing the current level
of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and the resources and capacity of the company. Rent rises are likely, as the Strategy
allows for them and the CCTO is likely to want to maximise the amount of rent paid. There could be
longer term uncertainty about social housing provision. Standard of living and the service itself are
dependent on the quality of the CCTO.
5. Impact on current and future tenants
Positive: The company has a dedicated social purpose and expertise in housing. There is potential
for tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the
company is unable to implement elements of the Strategy on the available budget. Rent rises are
likely, as the Strategy allows for them and the company is likely to want to maximise the amount of
rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
service itself are dependent on the quality of the company.
6. Ability for Council to influence social housing delivery over time
Positive: Negative/Unknown: The company is not primarily accountable to the Council, and so the Council
will not have the opportunity to influence its activities. There will be less control by the Council over
the service provided than there is at present. There could be disagreements between the Council
and the company about how the service should be provided in the future.
7. Opportunity to benefit from partnerships
Positive: This option does provide a partnership opportunity for the Council. There are potential
further partnerships between the company and other parties.
Negative/Unknown: There may be a lesser relationship with the Council if the operational
Social Housing Working Group Report October 2015
63
36
structures move away from services being contracted to Council units.
8. Risks and barriers
A main barrier to this model is the CCTO may not be eligible for registration as a CHP, meaning that
there is little financial incentive for this model aside from the ability of a CCTO to raise other funds.
There will be a decrease to Council equity. There are opportunities for disagreement between the
CCTO and the Council. There is also risk involved in the transition to this model, both for tenant
welfare and continuity of service. This option may also be difficult to ‘undo’.
Summary
Under this option the Council would divest itself of assets and also of direct control over social
housing delivery. However, this would not be an ‘exit’ from social housing in the same way that
divestment to a completely external agency (such as a trust) could be.
Other Entity Option 2: Establishment of a CCTO, with the housing assets leased by the
company from the Council
1. Delivery of the social housing strategy
Positive: The Council will establish the company. The delivery of the Strategy will be the core
business of the company and the specific expertise of the directors. The assets will remain with the
Council so there will be an ongoing discussion about what it means to deliver on the Strategy.
Negative/Unknown: It is possible that there could be disagreement between the Council and the
company about what it means to deliver on the Strategy. Delivery on the Strategy will be dependent
on the availability of resources, and this is likely to be the subject of ongoing negotiation. The CCTO
could achieve a growth in social housing but this is unlikely.
2. Financial – impact/consequences
Positive: Renewals will remain the responsibility of the Council but operational costs will be the
responsibility of the CCTO. There will be no reduction in Council equity.
Negative/Unknown: If the financial management is difficult there could be an expectation of more
Council support. Renewal costs will remain with the Council, so there could be unexpected (higher)
costs if the housing is not run well, or there are other unexpected events.
3. Ability to access IRRS and Community Housing Provider registration
Positive: Negative/Unknown: The company is unlikely to be eligible to be a registered CHP, and so could not
qualify for the IRRS. This would need further investigation depending on how the company was
structured.
4. Social impact on the City
Positive: Tenants will be housed in accordance with the Strategy, thus continuing the current level
of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and the resources and capacity of the company. Rent rises are likely, as the Strategy
allows for them and the CCTO is likely to want to maximise the amount of rent paid. There could be
longer term uncertainty about social housing provision. Standard of living and the service itself are
dependent on the quality of the CCO.
5. Impact on current and future tenants
Positive: The company has a dedicated social purpose and expertise in housing. There is potential
for tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the
company is unable to implement elements of the Strategy on the available budget. Rent rises are
likely, as the Strategy allows for them and the company is likely to want to maximise the amount of
rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
Social Housing Working Group Report October 2015
64
37
service itself are dependent on the quality of the company. There is also a potential for increased
tenant ‘churn’ if there is increased financial pressure on the CCO.
6. Ability for Council to influence social housing delivery over time
Positive: Negative/Unknown: The company is not primarily accountable to the Council, but the Council will
have the opportunity to influence its activities through the lease agreement. There will be less
control by the Council over the service provided than there is at present. There could be
disagreements between the Council and the company about how the service should be provided in
the future. There is a risk that the company could withdraw and the Council would be in a position
of having to choose another model to replace it.
7. Opportunity to benefit from partnerships
Positive: This option does provide a partnership opportunity for the Council. There are potential
further partnerships between the company and other parties.
Negative/Unknown: There may be a lesser relationship with the Council if the operational
structures move away from services being contracted to Council units.
8. Risks and barriers
A main barrier to this model is the CCTO may not be eligible for registration as a CHP, meaning that
there is little financial incentive for this model aside from the limited ability of a CCTO to raise other
funds. There are opportunities for disagreement between the CCTO and the Council. There is also
risk involved in the transition to this model, both for tenant welfare and continuity of service.
Summary
Under this option the Council will retain influence over social housing delivery. The outcomes will
be dependent on the negotiation of terms of the lease and expectations for delivery of social
housing.
Other Entity Option 3: Establishment of a Public Private Partnership to develop new social
housing and operate current housing
1. Delivery of the social housing strategy
Positive: Negative/Unknown: It would be difficult to identify the right partners, who would need expertise in
property development and running social housing. A PPP could be focused on the new development
of housing rather than the operation of the current service. The focus on the Strategy, which is the
priority of Council, may not be shared by other PPP partners.
2. Financial – impact/consequences
Positive: The PPP would be responsible for the ongoing costs of operating social housing.
Negative/Unknown: There could be increased costs to Council unless operational costs decreased or
alternative sources of funding were found.
3. Ability to access IRRS and Community Housing Provider registration
Positive: Negative/Unknown: It is unlikely that the PPP would qualify for the IRRS (as it would not have
charitable status and would still be Council social housing).
4. Social impact on the City
Positive: There will be more social housing in the City.
Negative/Unknown: This approach is a partial privatisation of the Council’s social housing, along
with uncertainty about Council’s commitment.
5. Impact on current and future tenants
Positive: The PPP has a dedicated social purpose and expertise in housing. There is potential for
tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the PPP is
Social Housing Working Group Report October 2015
65
38
unable to implement elements of the Strategy on the available budget. Rent rises are likely, as the
Strategy allows for them and the PPP is likely to want to maximise the amount of rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
service itself are dependent on the quality of the company.
6. Ability for Council to influence social housing delivery over time
Positive: Negative/Unknown: There is potential for the Council to have a significant influence on social
housing in the City. However this will be highly dependent on the actions of other entities, which
are beyond the Council’s control.
7. Opportunity to benefit from partnerships
Positive: There are opportunities for the Council to develop partnerships to deliver on its social
housing objectives.
Negative/Unknown: The Council’s objectives are not necessarily shared by potential partners.
8. Risks and barriers
Literature on PPPs tends to suggest that the Council’s social housing is of insufficient scale to make
a PPP worthwhile or viable. This model would signal the Council’s willingness to privatise social
housing.
Summary
The formation of a PPP will require a significant amount of work by the Council to establish
partnerships with other agencies. Its success will be almost entirely dependent on the quality and
availability of suitable partners who share the Council’s strategic goals.
Other Entity Option 4: Establishment of a consortium
1. Delivery of the social housing strategy
Positive:
Negative/Unknown: This arrangement would not necessarily address the ongoing delivery of the
Strategy. It would be difficult to identify the right partners in a consortium, who would need
expertise in property development and running social housing. A consortium could be focused on
the new development of housing rather than the operation of the current service.
2. Financial – impact/consequences
Positive: The consortium will be responsible for the ongoing costs of operating social housing.
Negative/Unknown: There could be increased costs to Council, unless operational costs decreased
or alternative sources of funding were found.
3. Ability to access IRRS and Community Housing Provider registration
Positive: Negative/Unknown: It is possible that a consortium could qualify for the IRRS if CHP status is
achieved.
4. Social impact on the City
Positive: There will be more social housing in the City.
Negative/Unknown: This model could signal some uncertainty about Council’s commitment to
social housing, and potentially take a long time to implement.
5. Impact on current and future tenants
Positive: The consortium has a dedicated social purpose and expertise in housing. There is potential
for tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the
consortium is unable to implement elements of the Strategy on the available budget. Rent rises are
likely, as the Strategy allows for them and the consortium is likely to want to maximise the amount
of rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
Social Housing Working Group Report October 2015
66
39
service itself are dependent on the quality of the consortium.
6. Ability for Council to influence social housing delivery over time
Positive: Negative/Unknown: There is potential for the Council to have a significant influence on social
housing in the City. However this will be highly dependent on the actions of other consortium
partners, which are beyond the Council’s control.
7. Opportunity to benefit from partnerships
Positive: There are opportunities for the Council to develop partnerships to deliver on its social
housing objectives.
Negative/Unknown: The Council’s objectives are not necessarily shared by potential partners.
8. Risks and barriers
The consortium model developed in Christchurch had far wider aims than operating social housing,
due to the unique circumstances and need for affordable housing in the post-quake City. It is
unclear whether such an arrangement is viable in Palmerston North, where the Council’s goals are
focused on a relatively small amount of social housing. The main barriers to this model are the lack
of scale, the availability of other partners, and the uncertainty conveyed by the Council’s actions.
Summary
It could be possible to develop a consortium to deliver on the aims of the Social Housing Strategy.
However, the cost and effort necessary may far outweigh the potential benefits to the City.
Social Housing Working Group Report October 2015
67
40
E. Other Options (Exit from Social Housing)
Exit Option 1: Establishment of a trust/s to own social housing assets and deliver services,
with housing assets sold
1. Delivery of the social housing strategy
Positive: The trust deed will reflect the intent of the Social Housing Strategy. The trust could
potentially increase the social housing provided by borrowing against the housing assets.
Negative/Unknown: It is possible that there could be disagreement between the Council and the
trust about what it means to deliver on the Strategy. The trust may achieve an increase in social
housing because it does have assets, and may have a mandate. Delivery on the Strategy will be
dependent on the availability of resources, and this is likely to be the subject of ongoing
negotiation. The Council will not have the same amount of ‘leverage’ over the activities of the trust
because it does not own the assets. Over time there could be less implementation of the Strategy if
circumstances change.
2. Financial – impact/consequences
Positive: Renewal costs will be the responsibility of the trust. The Council could still provide financial
support but it will cost less. The capital injection will reduce Council debt. The trust could have
access to capital funding from other sources and leverage for borrowing.
Negative/Unknown: It could be difficult to fundraise if social housing still perceived as ‘Council
housing’. If the trust finances do not go well there could be an expectation of Council support.
Assets are at risk of being run down if the day to day operational demands of the service are
prioritised over long term planning. There would be no obligation for the trust to report to Council
on its financial operation. The other financial impacts would depend on the nature of the purchase
by the trust, and the resources available to the trust. The trust’s ability to borrow against assets
would be influenced by the debt already incurred through the purchase of Council’s housing assets.
3. Ability to access IRRS and Community Housing Provider registration
Positive: The trust will be eligible to apply for registration.
Negative/Unknown: No subsidy will be available immediately upon registration – it will only be for
new eligible tenants. It is unknown whether any or all tenants likely to be housed by the trust would
be eligible for the subsidy. If the trust only housed eligible tenants then this could impact on the
achievement of the Social Housing Strategy.
4. Social impact on the City
Positive: Tenants will initially be housed in accordance with the Strategy, thus continuing the
current level of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and the resources and capacity of the trust.
5. Impact on current and future tenants
Positive: The trust will have a dedicated social purpose and expertise in housing. There is potential
for tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) public uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the trust is
unable to implement elements of the Strategy on the available budget. Rent rises are likely, as the
Strategy allows for them and a trust is likely to want to maximise the amount of rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
service itself are dependent on the quality of the new trust.
6. Ability for Council to influence social housing delivery over time
Positive: Negative/Unknown: There will be less opportunity to influence as the trust owns the assets. The
trust can change the deed, and future decisions will be outside Council’s control. There will be less
opportunity to ‘undo’ this option if it proves unsuccessful because the assets will have been sold.
Social Housing Working Group Report October 2015
68
41
7. Opportunity to benefit from partnerships
Positive: There are potential further partnerships between the trust and other parties.
Negative/Unknown: There is not really a partnership between the Council and the trust.
8. Risks and barriers
A barrier to the viability of this option is whether a trust could be formed with debt already incurred
for the purchase of housing assets. There could be some risk to the delivery of the Strategy if the
trust was motivated to only house tenants who are eligible for the IRRS. A further risk is that it
would be difficult to ‘undo’ this option if Council was dissatisfied with service delivery. This is an exit
from social housing, and would be perceived as such.
Summary
This option involves the Council selling its social housing assets to a newly formed trust. The sale of
assets will mean the Council has relatively little influence over the activities and direction of the
trust in the future. Council will benefit from a capital injection, but could also be requested to
provide operational funding in the future, and could be perceived as having an ongoing obligation
to its tenants and to social housing in the City. This option is an ‘exit’ from Council social housing.
Exit Option 2: Establishment of a trust/s to own social housing assets and deliver services,
with assets gifted to the trust/s
1. Delivery of the social housing strategy
Positive: The trust deed will reflect the intent of the Social Housing Strategy.
Negative/Unknown: It is possible that there could be disagreement between the Council and the
trust about what it means to deliver on the Strategy. The trust may achieve an increase in social
housing because it does have assets, and may have a mandate. Delivery on the Strategy will be
dependent on the availability of resources, and this is likely to be the subject of ongoing
negotiation. The Council will not have the same amount of ‘leverage’ over the activities of the trust
because it does not own the assets. Over time there could be less implementation of the Strategy if
circumstances change.
2. Financial – impact/consequences
Positive: Renewal costs will be the responsibility of the trust. The Council could still provide financial
support but it will cost less.
Negative/Unknown: There will be a loss of Council equity, and possibly a decrease to its credit
rating. Grants fundraising could be difficult if social housing is still perceived as ‘Council housing’. If
the trust finances do not go well there could be an expectation of Council support. Assets are at risk
of being run down if the day to day operational demands of the service are prioritised over long
term planning. There will be no obligation for the trust to report to Council on its financial
operation.
3. Ability to access IRRS and Community Housing Provider registration
Positive: The trust will be eligible to apply for registration.
Negative/Unknown: No subsidy will be available immediately upon registration – it will only be for
new eligible tenants. It is unknown whether any or all tenants likely to be housed by the trust would
be eligible for the subsidy. If the trust only housed eligible tenants then this could impact on the
achievement of the Social Housing Strategy.
4. Social impact on the City
Positive: Tenants will be housed in accordance with the Strategy, thus continuing the current level
of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and the resources and capacity of the trust.
5. Impact on current and future tenants
Positive: The trust has a dedicated social purpose and expertise in housing. There is potential for
tenant involvement in the social housing delivery.
Social Housing Working Group Report October 2015
69
42
Negative/Unknown: There could be initial (and ongoing) public uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the trust is
unable to implement elements of the Strategy on the available budget. Rent rises are likely, as the
Strategy allows for them and a trust is likely to want to maximise the amount of rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
service itself are dependent on the quality of the new trust.
6. Ability for Council to influence social housing delivery over time
Positive: Negative/Unknown: There will be less opportunity to influence as the trust owns the assets. The
trust can change the deed, and future decisions will be outside Council’s control. There will be less
opportunity to ‘undo’ this option if it proves unsuccessful because the assets will have been given
away.
7. Opportunity to benefit from partnerships
Positive: There are potential further partnerships between the trust and other parties.
Negative/Unknown: There is not really a partnership between the Council and the trust.
8. Risks and barriers
There could be some risk to the delivery of the Strategy if the trust was motivated to only house
tenants who are eligible for the IRRS. A further risk is that it would be difficult to ‘undo’ this option
if Council was dissatisfied with service delivery. This is an exit from social housing, and would be
publicly perceived as such.
Summary
This option involves the Council giving its social housing assets to a newly formed trust. This means
the Council will have relatively little influence over the activities and direction of the trust in the
future. Council could be requested to provide operational funding in the future, and could be
perceived as having an ongoing obligation to its tenants and to social housing in the City. This option
is an ‘exit’ from Council social housing.
Exit Option 3: Existing trust/s to own social housing assets and deliver services, with
housing assets sold
1. Delivery of the social housing strategy
Positive: It is likely that the trust has expertise and experience in this activity, and therefore capacity
to deliver on the Strategy. The retention of assets by the Council mean the purpose of the trust will
remain focused on this activity.
Negative/Unknown: It is possible that there could be disagreement between the Council and the
trust about what it means to deliver on the Strategy. The trust may achieve an increase in social
housing because it does have assets, and may have a mandate. Delivery on the Strategy will be
dependent on the availability of resources, and this is likely to be the subject of ongoing
negotiation. The Council will not have the same amount of ‘leverage’ over the activities of the trust
because it does not own the assets. Over time there could be less implementation of the Strategy if
circumstances change. Council will be required to provide ongoing monitoring and support.
2. Financial – impact/consequences
Positive: Renewal costs will be the responsibility of the trust. The Council could still provide financial
support but it will cost less. The capital injection will reduce Council debt. The trust could have
access to capital funding from other sources and leverage for borrowing.
Negative/Unknown: It could be difficult to fundraise if social housing still perceived as ‘Council
housing’. If the trust finances do not go well there could be an expectation of Council support.
Assets are at risk of being run down if the day to day operational demands of the service are
prioritised over long term planning. There would be no obligation for the trust to report to Council
on its financial operation. The other financial impacts would depend on the nature of the purchase
by the trust, and the resources available to the trust. The trust’s ability to borrow against assets
Social Housing Working Group Report October 2015
70
43
would be influenced by the debt already incurred through the purchase of Council’s housing assets.
3. Ability to access IRRS and Community Housing Provider registration
Positive: The trust will be eligible to apply for registration.
Negative/Unknown: No subsidy will be available immediately upon registration – it will only be for
new eligible tenants. It is unknown whether any or all tenants likely to be housed by the trust would
be eligible for the subsidy. If the trust only housed eligible tenants then this could impact on the
achievement of the Social Housing Strategy.
4. Social impact on the City
Positive: Tenants will be housed in accordance with the Strategy, thus continuing the current level
of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and the resources and capacity of the trust.
5. Impact on current and future tenants
Positive: The trust has a dedicated social purpose and expertise in housing. There is potential for
tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the trust is
unable to implement elements of the Strategy on the available budget. Rent rises are likely, as the
Strategy allows for them and a trust is likely to want to maximise the amount of rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
service itself are dependent on the quality of the new trust.
6. Ability for Council to influence social housing delivery over time
Positive: Negative/Unknown: There will be less opportunity to influence as the trust owns the assets. The
trust can change its activities, and future decisions will be outside Council’s control. There will be
less opportunity to ‘undo’ this option if it proves unsuccessful because the assets will have been
sold.
7. Opportunity to benefit from partnerships
Positive: There are potential further partnerships between the trust and other parties.
Negative/Unknown: There is not really a partnership between the Council and the trust.
8. Risks and barriers
A barrier to the viability of this option is whether there is a suitable existing trust willing to purchase
Council’s housing assets. There could be some risk to the delivery of the Strategy if the trust was
motivated to only house tenants who are eligible for the IRRS. A further risk is that it would be
difficult to ‘undo’ this option if Council was dissatisfied with service delivery. This is an exit from
social housing, and would be perceived as such.
Summary
This option involves the Council selling its social housing assets to an existing trust. The sale of
assets will mean the Council has relatively little influence over the activities and direction of the
trust in the future. Council will benefit from a capital injection, but could also be requested to
provide operational funding in the future, and could be perceived as having an ongoing obligation
to its tenants and to social housing in the City. This option is an ‘exit’ from Council social housing.
Social Housing Working Group Report October 2015
71
44
Exit Option 4: Existing trust/s to own social housing assets and deliver services, with
housing assets gifted to the trust/s
1. Delivery of the social housing strategy
Positive: The trust deed will reflect the intent of the Social Housing Strategy. The retention of assets
by the Council mean the purpose of the trust will remain focused on this activity.
Negative/Unknown: It is possible that there could be disagreement between the Council and the
trust about what it means to deliver on the Strategy. The trust may achieve an increase in social
housing because it does have assets, and may have a mandate. Delivery on the Strategy will be
dependent on the availability of resources, and this is likely to be the subject of ongoing
negotiation. The Council will not have the same amount of ‘leverage’ over the activities of the trust
because it does not own the assets. Over time there could be less implementation of the Strategy if
circumstances change.
2. Financial – impact/consequences
Positive: Renewal costs will be the responsibility of the trust. The Council could still provide financial
support but it will cost less.
Negative/Unknown: There will be a loss of Council equity and possibly a decrease to its credit rating.
Grants fundraising could be difficult if social housing is still perceived as ‘Council housing’. Assets
are at risk of being run down if the day to day operational demands of the service are prioritised
over long term planning. If the trust finances do not go well there could be an expectation of
Council support. There will be no obligation for the trust to report to Council on its financial
operation.
3. Ability to access IRRS and Community Housing Provider registration
Positive: The trust will be eligible to apply for registration.
Negative/Unknown: No subsidy will be available immediately upon registration – it will only be for
new eligible tenants. It is unknown whether any or all tenants likely to be housed by the trust would
be eligible for the subsidy. If the trust only housed eligible tenants then this could impact on the
achievement of the Social Housing Strategy.
4. Social impact on the City
Positive: Tenants will be housed in accordance with the Strategy, thus continuing the current level
of social housing provision.
Negative/Unknown: Social impact will be dependent on how the transition to the new model is
achieved, and the resources and capacity of the trust.
5. Impact on current and future tenants
Positive: The trust has a dedicated social purpose and expertise in housing. There is potential for
tenant involvement in the social housing delivery.
Negative/Unknown: There could be initial (and ongoing) uncertainty about the Council’s
commitment to social housing. There is potential for the standard of living to decrease if the trust is
unable to implement elements of the Strategy on the available budget. Rent rises are likely, as the
Strategy allows for them and a trust is likely to want to maximise the amount of rent paid.
There could be longer term uncertainty about social housing provision. Standard of living and the
service itself are dependent on the quality of the trust.
6. Ability for Council to influence social housing delivery over time
Positive: Negative/Unknown: There will be less opportunity to influence as the trust owns the assets. The
trust can change the deed, and future decisions will be outside Council’s control. There will be less
opportunity to ‘undo’ this option if it proves unsuccessful because the assets will have been given
away.
7. Opportunity to benefit from partnerships
Positive: There are potential further partnerships between the trust and other parties.
Negative/Unknown: There is not really a partnership between the Council and the trust.
Social Housing Working Group Report October 2015
72
45
8. Risks and barriers
There could be some risk to the delivery of the Strategy if the trust was motivated to only house
tenants who are eligible for the IRRS. A further risk is that it would be difficult to ‘undo’ this option
if Council was dissatisfied with service delivery. This is an exit from social housing, and would be
publicly perceived as such.
Summary
This option involves the Council giving its social housing assets to an existing trust. This means the
Council will have relatively little influence over the activities and direction of the trust in the future.
Council could be requested to provide operational funding in the future, and could be perceived as
having an ongoing obligation to its tenants and to social housing in the City. This option is an ‘exit’
from Council social housing.
Social Housing Working Group Report October 2015
73
46
7. Other Considerations
There are some further matters the Council will need to consider alongside the analysis of each
option set out above.
Legislative Environment
The purpose of the 2013 Housing Accords and Special Housing Areas Act is “to enhance housing
affordability by facilitating an increase in land and housing supply in certain regions or districts”.
Regions and districts that have significant housing supply and affordability issues for purposes of the
Act do not include Palmerston North or the wider Manawatu region.13 This means that Palmerston
North is unlikely to be in a position to benefit from the special arrangements negotiated between
some local authorities and the Government. This is a separate issue from eligibility for the IRRS, but
noted here because of its relevance to the wider issue of affordable housing.
Local Government Act 2002, section 17A
Section 17A of the Local Government Act 2002 requires a periodic assessment of the costeffectiveness of current arrangements for meeting community needs for the delivery of local public
services. In this review, consideration has been given to delivery options for the governance, funding
and delivery of social housing which meet the requirements of the Act. The review has considered
options where the Council remains responsible for governance, funding, and delivery, and where
delivery is undertaken by another entity, including a Council Controlled Organisation. The review has
also considered options where aspects of governance, funding, and delivery are undertaken by other
agencies, including a trust. The options considered are fully explained in previous sections of this
report. Delivery through another local authority (also required by the Act) is considered unviable due
to the lack of local authority social housing service providers operating at a similar scale within a
reasonable proximity to Palmerston North.
Each of the options for changed delivery of social housing has the potential for additional costs, such
as governance and tax, or risks to the continuing delivery of the Social Housing Strategy. There is
also uncertainty about other issues such as the availability of the IRRS. The Working Group
concludes, therefore, that none of the other options considered would provide sufficient benefits to
change from the status quo.
Financial Issues
Each of the options includes an analysis of the financial impact/consequences. In addition to this
analysis the Council will need to determine how the current Housing Activity shortfall can be funded.
For example the 10 Year Plan includes an activity shortfall to be funded by rates. It is probable that
this will not be able to be turned around immediately under any option, and therefore there is a
13
The identified districts are Auckland, and the district of each of the following territorial authorities:
Christchurch City Council, Hamilton City Council, Hutt City Council, Kapiti Coast District Council, Nelson City
Council, Porirua City Council, Queenstown–Lakes District Council, Selwyn District Council, Tasman District
Council, Tauranga City Council, Upper Hutt City Council, Waimakariri District Council, Wellington City Council,
and Western Bay of Plenty District Council.
Social Housing Working Group Report October 2015
74
47
question of whether each option will require a grant from Council to fund this shortfall. If this is
provided then the financial position of Council will not be improved.
In addition, where Council retains ownership of the land and buildings it is likely to be responsible
for the ongoing renewal capital requirements of those buildings. The only ability to fund this is from
rent charged to the operator under those options. This ability is dependent on the financial viability
of each option and the ability of the operator (such as a trust) to pay rent. Given the current deficit,
payment of any amount is unlikely. Council could therefore be required to fund renewals from rates,
as currently included in the 10 Year Plan.
A further matter for consideration is that the Council received two housing improvement suspensory
loans in 2010 and 2011 totalling $480,000. A condition of these is that they would become repayable
if the applicable social housing assets were disposed of (sold or gifted) within twenty years.
Governance
Given the requirements of each option it is unlikely that the management and governing body
structures will be wholly voluntary. As such, there is potential for increase in direct costs (to
Council), offset by any reduction in current allocated Council overheads. The effects of these matters
are uncertain and will be dependent on any organisation selected or developed, and how it evolves
over time. The key to providing any benefit from an alternative governance option will be the people
managing that organisation initially and in the future.
Asset Sales
The options described above under E. Exit Options involve the sale or partial sale of social housing
assets. The Working Group has noted these options under this separate heading as they do not
adequately meet the brief for the ongoing implementation of the Social Housing Strategy. These
options are included in this report for completeness, and so two notes on asset sales are necessary.
1. How sales are funded by the organisation would need to be investigated if these options were
pursued. A loan from Council would potentially be required which may involve a subsequent writedown of loan values by accounting standards if regular payments were not received or market
interest rates did not apply. The consequence of this would be a reduction in equity. Given the
current cashflow shortfall, this is a likely outcome.
2. Some of the land the Council currently uses for social housing was originally provided for this
purpose by the Government. Advice obtained by the Working Group on social housing titles is
included here (see Appendix Seven). Should Council determine that they should be disposed of, it
appears that some parcels of social housing land held by the Council may be subject to offer-back
requirements under the Public Works Act.
Income Tax
Local authorities are exempt from income tax. This exemption does not extend to CCOs or other
council subsidiaries. Transfer of operations to another entity could therefore trigger tax
consequences and applicable additional costs unless planned properly.
Social Housing Working Group Report October 2015
75
48
The Income Tax Act has provisions to enable an organisation maintained exclusively for charitable
purposes and registered as a charitable entity under the Charities Act, and as a tax charity under the
Income Tax Act, to be partially or fully exempt from income tax. It is important that the correct
procedures are followed to ensure such exemptions are not compromised. For the purposes of
analysis in this report it is assumed that such tax treatment is achieved, however this cannot be
taken for granted.
Winding Up
A trust deed of a charitable trust will typically include a clause that on the winding up of the trust the
assets can only be given to another charitable trust. Should social housing be transferred to such an
entity and then operations ceased for any reason, then it may be difficult to transfer the assets back
to Council.
Organisational Management
Some of the options would involve changes to the organisational management of the Council. If the
Council decides to pursue any of the options involving organisational change then this would need to
be undertaken within an appropriate process.
Communication
The Council undertook an extensive public consultation process in 2014 to inform the development
of the Social Housing Strategy 2015. This process involved tenants, many of whom indicated their
concern about Council’s future decisions about social housing. Council will need to be mindful of the
impact of the ongoing decision-making process on tenants, and ensure that opportunities are clearly
communicated to all interested parties.
Growth
The Social Housing Strategy expresses the Council’s commitment to increasing social housing in
Palmerston North. The analysis of the various options has identified that there are barriers to
achieving this growth if the Council is to remain the direct provider. Social housing is not generating
sufficient cash flow to fund any increase for the future.14 However, the Council may wish to consider
other mechanisms for achieving growth in social housing in the City. For example, grants funding to
social housing providers or partnerships with other agencies interesting in supporting social housing
growth.
14
For example, a rental income of $4,888 at 6.5% interest rate would only support a new total unit cost of
$75,200 and that that is before allowing for rates, insurance, maintenance which would reduce that amount.
Social Housing Working Group Report October 2015
76
49
8. Next Steps
Depending on which option or options the Council wishes to pursue, there may be a requirement for
a public consultation process. This will be necessary unless option one is the sole preferred option,
as social housing is a strategic asset. The Significance and Engagement Policy 2014 also states that:
In general, if Council is making a decision about a strategic asset it will use a greater degree
of engagement than it will for a non-strategic asset. In particular, the Council cannot transfer
ownership or control of a strategic asset unless it has first consulted with the community
through a Long-Term Plan Consultation Document (LG Act s97).
9. Conclusion
The analysis above, along with the additional issues briefly canvassed in this section, show that
growth of Council’s social housing is unlikely without significant changes to the quality and type of
social housing recently committed to by the Council through the Social Housing Strategy. The
Working Group has been unable to identify any local authority undertaking a programme of growth
for its own social housing. Other councils are instead more likely to be exiting from, or reconfiguring,
their social housing operations in the hope that their communities will benefit from the
Government’s extension of Income Related Rent Subsidies to community providers. The Working
Group explicitly notes that there are considerable risks associated with any plan by the Council to
remove the current social housing from its direct control.
The purpose of this report is to provide analysis of the delivery options for governance, funding and
growing Council’s housing stock in accordance with the requirements for the review of options
under section 17a of the Local Government Act. The Council’s commitment to the Social Housing
Strategy provides a starting point for this analysis of five groups of options for the future delivery of
Council’s social housing. In the course of this review it has become clear that there is no obvious
‘solution’ to the difficult policy and operational context the Council finds itself in – each potential
option instead has complex advantages and disadvantages. This conclusion is reinforced by the
international experience, and by the wide range of options being explored by other local authorities
around New Zealand. It has been the Working Group’s task to point out some of these complexities,
and to provide a framework within which political decisions will be made in future.
Social Housing Working Group Report October 2015
77
50
Appendix One: Social Housing Working Group Terms of Reference
Background
The social housing Working Group has been formed to contribute to further work on social housing
determined by:
1. The Council (March) resolution “That the Chief Executive be instructed to develop a report,
within six months, on delivery options for governance, funding and growing Council’s
housing stock.”
2. The Action from Driver 4 of the Social Housing Strategy (2015) which states “Delivery
mechanisms are investigated and publicly consulted on and a recommended delivery option
is proposed in 2015/2016.
3. The requirement to review the cost-effectiveness of Council functions determined section
17A of the Local Government Act (see Appendix One: Relevant parts of the Local
Government Act 2002).
Objectives
1.
2.
3.
4.
5.
Identify potential social housing delivery options for the Council’s social housing.
Develop criteria to assess each option (e.g. cost effectiveness, outcomes for tenants).
Meet the requirements of section 17A of the Local Government Act.
Comply with section 97 of the Local Government Act.
Assess each option against the Social Housing Strategy (2015).
This assessment will be in two parts. The first is considering the social housing as it
is, and the second is considering the stated goal to increase the amount of social
housing in Palmerston North.
6. Present the outcome of the review to the Community Development Committee in
September 2015.
Scope
1. The scope of this review is the social housing currently delivered by the Council and defined
by the Social Housing Strategy (2015).
2. The review includes consideration of material from other local authorities that have
considered the future direction for their social housing.
3. The report produced by this Working Group will only partly fulfil the action contained in
Driver 4 (above). It is expected that this report will form the basis for a decision by the
Council and a subsequent public consultation process.
4. The activities of the Working Group will include discussions with stakeholders (e.g. HNZC,
government agencies, other local authorities, PNCC staff and social housing providers).
5. The scope does not include the recommendation of a delivery option.
Social Housing Working Group Report October 2015: Appendix One Terms of Reference
78
51
Members and resourcing
1. Working group members are Victoria Blockley-Powell (leader), Julie Macdonald, Peter Grey,
John Brenkley, and Keith Allen.
2. The majority of the analysis will be done by this staff team, however there may be a
requirement for additional assistance identified during the research phase. The strongest
possibility at present appears to be a need for legal advice on specific aspects of some
options, or for work by either Third Bearing or Opus (given their previous work for the
Council on social housing).
Timeline
By the end of March (complete)
Identification of broad delivery options for analysis
Terms of reference and scope of the project to the Chief Executive
April-June
Analysis of options
July
Drafting
Review
August
Committee report process
September
Report to Committee
Relevant parts of the Local Government Act 2002
Section 17A Delivery of services
(1) A local authority must review the cost-effectiveness of current arrangements for meeting the
needs of communities within its district or region for good-quality local infrastructure, local public
services, and performance of regulatory functions.
(2) Subject to subsection (3), a review under subsection (1) must be undertaken—
(a) in conjunction with consideration of any significant change to relevant service levels; and
(b) within 2 years before the expiry of any contract or other binding agreement relating to
the delivery of that infrastructure, service, or regulatory function; and
(c) at such other times as the local authority considers desirable, but not later than 6 years
following the last review under subsection (1).
(3) Despite subsection (2)(c), a local authority is not required to undertake a review under
subsection (1) in relation to the governance, funding, and delivery of any infrastructure, service, or
regulatory function—
Social Housing Working Group Report October 2015: Appendix One Terms of Reference
79
52
(a) to the extent that the delivery of that infrastructure, service, or regulatory function is
governed by legislation, contract, or other binding agreement such that it cannot reasonably
be altered within the following 2 years; or
(b) if the local authority is satisfied that the potential benefits of undertaking a review in
relation to that infrastructure, service, or regulatory function do not justify the costs of
undertaking the review.
(4) A review under subsection (1) must consider options for the governance, funding, and delivery of
infrastructure, services, and regulatory functions, including, but not limited to, the following options:
(a) responsibility for governance, funding, and delivery is exercised by the local authority:
(b) responsibility for governance and funding is exercised by the local authority, and
responsibility for delivery is exercised by—
(i) a council-controlled organisation of the local authority; or
(ii) a council-controlled organisation in which the local authority is one of several
shareholders; or
(iii) another local authority; or
(iv) another person or agency:
(c) responsibility for governance and funding is delegated to a joint committee or other
shared governance arrangement, and responsibility for delivery is exercised by an entity or a
person listed in paragraph (b)(i) to (iv).
(5) If responsibility for delivery of infrastructure, services, or regulatory functions is to be undertaken
by a different entity from that responsible for governance, the entity that is responsible for
governance must ensure that there is a contract or other binding agreement that clearly specifies—
(a) the required service levels; and
(b) the performance measures and targets to be used to assess compliance with the
required service levels; and
(c) how performance is to be assessed and reported; and
(d) how the costs of delivery are to be met; and
(e) how any risks are to be managed; and
(f) what penalties for non-performance may be applied; and
(g) how accountability is to be enforced.
(6) Subsection (5) does not apply to an arrangement to the extent that any of the matters specified
in paragraphs (a) to (g) are—
(a) governed by any provision in an enactment; or
Social Housing Working Group Report October 2015: Appendix One Terms of Reference
80
53
(b) specified in the constitution or statement of intent of a council-controlled organisation.
(7) Subsection (5) does not apply to an arrangement if the entity that is responsible for governance is
satisfied that—
(a) the entity responsible for delivery is a community group or a not-for-profit organisation;
and
(b) the arrangement does not involve significant cost or risk to any local authority.
(8) The entity that is responsible for governance must ensure that any agreement under subsection
(5) is made publicly available.
(9) Nothing in this section requires the entity that is responsible for governance to make publicly
accessible any information that may be properly withheld if a request for that information were
made under the Local Government Official Information and Meetings Act 1987.
Section 97 Certain decisions to be taken only if provided for in long-term plan
(1) This section applies to the following decisions of a local authority:
(a) a decision to alter significantly the intended level of service provision for any significant
activity undertaken by or on behalf of the local authority, including a decision to commence
or cease any such activity:
(b) a decision to transfer the ownership or control of a strategic asset to or from the local
authority.
(c) [Repealed]
(d) [Repealed]
(2) A local authority must not make a decision to which this section relates unless—
(a) the decision is explicitly provided for in its long-term plan; and
(b) the proposal to provide for the decision was included in a consultation document in
accordance with section 93E.
(3) Nothing in this section applies to a decision of a local authority to fund a capital project by lump
sum contributions if the local authority has complied with section 117B(3)(c)(i) of the Local
Government (Rating) Act 2002.
Social Housing Working Group Report October 2015: Appendix One Terms of Reference
81
54
Appendix Two: International Context
Social housing provision:
Experiences in Europe and Australia
Dr. Christina Severinsen
June 2015
Prepared for: Palmerston North City Council
82
55
Introduction
In Western welfare states, considerable change in the provision of social housing has been
characterised by greater reliance on commerical bodies, market mechanisms and private capital, and
residualisation through a focus on housing those in need for the duration of that need. Debates have
moved from ‘who’ is allocated social housing, to ‘how’ and ‘by whom’ (Blessing, 2013).
The debate about the future of social housing is three-fold:
1. Debate to understand the role of various models in improving outcomes
2. Ideological debate in regards to centralisation, privatisation and the role of local authorities,
and;
3. Debate related to the ability to deliver of stated political requirements (such as reducing
homelessness and investing to improve housing quality)
(Gibb & Trebeck, 2009)
In the last three decades, privatisation has emerged in the social sector across Europe, characterised
by the sale of state-owned assets to the private sector, the reduction of government involvement in
socially-oriented activities, and greater use of the market to achieve social ends (Elsinga et al., 2014).
This social housing reform being undertaken across Europe and Australia is best understood within
the context of wider shifts in governance and social welfare reform (Jacobs et al., 2013).
There are two main types of social housing: firstly, companies in local authority (municipal)
ownership or local authorities themselves, and secondly non-profit organisations (Scanlon, 2014).
Most countries have a mix of provision, however there is great variation in proportions allocated to
each. That said, social housing is increasingly being moved out of public ownership in non-profit
organisations with a social mission. The trend is driven by pressure to reduce public expenditure,
and the neoliberal belief that private providers are more efficient and responsive to tenants
(Scanlon, 2014).
Social housing in the UK
Historically in the UK, social housing has been owned, managed and controlled by local
authorities as ‘council housing’. However, since the 1990s, more than one-third of
Britain’s council housing has been transferred from local authorities to the non-profit
housing sector (Pawson & Mullins, 2010). Social housing stock transfer in the UK has
been a highly contested policy and process, with vocal opposition identifying stock
transfer as a form of privatisation.
Social Housing Working Group Report October 2015 – Appendix Two International Context
83
56
Social housing in Australia
In Australia, the majority of social housing is provided through large state
government agencies. The non-profit social housing sector has had limited
involvement, as public stock has been retained and managed by local housing
authorities (Mulligan & Randolph, 2009). There are, however, many small non-profit
providers whose role is to manage government-owned housing, rather than the
ownership, development and financing of their own stock. These social housing
providers are closely regulated by government (Milligan & Randolph, 2009). The
recent devolving of tenancy management to community housing organisations
(CHOs), non-profit organisations (part-privatisation), demonstrates housing
authorities shifting the risks of managing and maintaining stock (Jacobs et al., 2013;
Mulligan & Randolph, 2009). Australia’s social housing sector is in transition, with the
current government giving priority to the transfer of social housing stock to
community housing organisations, and government subsidies available to support
this (Jacobs et al., 2013).
This report draws on literature relating to the change in social housing provision in Europe
(predominantly the UK) and Australia. The report highlights current critique and challenges of
various models, structured as follows.
1.
2.
3.
4.
Stock transfer and ownership
Management and accountability
Finance
Outcomes
Overall, there remains much variation in the provision of social housing across Europe and Australia,
shaped both by the characteristics of the organisation and ownership of the housing stock, and the
institutional settings they operate within (Blessing, 2013). This varies both within and across national
contexts (Blessing, 2013). While the underlying perception is that privatising the management of
social housing will be more efficient and effective, evidence to prove the success of transfers is still
developing. There is little published empirical evidence which directly compares different forms and
outcomes of social housing provision.
Social Housing Working Group Report October 2015 – Appendix Two International Context
84
57
1. Stock transfer and ownership
Central to the privatisation of council housing in the UK has been stock transfer
policy, the transfer of local authority housing to a non-profit private housing
association (Smyth, 2013; Ginsburg, 2005; Whitehead, 2014a).
The process of stock transfer in Europe has been varied, with a greatest impact in Britain, and to a
smaller degree Scotland and Wales (Pawson & Mullins, 2010; Whitehead, 2014a). Stock transfer has
varied according to the proportion of a council’s housing portfolio that has been transferred and the
characteristics of the organisation taking over the housing (Pawson & Mullins, 2010).
x
x
The most common transfer has been the transfer of the entire stock to a newlyestablished registered housing provider (Pawson & Mullins, 2010).
Other alternatives (such as Arms Length Management Organisations) have seen
local councils transferring management and investment responsibilities to third
parties, but maintaining long-term ownership (Pawson & Mullins, 2010).
In the Netherlands, nearly all social housing assets have been transferred to housing associations
(Pawson & Mullins, 2010). In Ireland, there has been small-scale transfers of local authority housing,
with a high level of opposition based on concerns that through housing stock transfer local
authorities were removing their responsibilities to those in housing need, and disposing of valuable
public assets (Pawson & Mullins, 2010). In Australia, by 2010 few stock transfers had taken place.
While Australia’s social housing sector is growing, official data on the sector does not differentiate
homes managed by community housing providers while remaining in state ownership from those
owned and managed by community housing providers themselves (Pawson, Milligan, Wiesel &
Hulse, 2013). Milligan and Randolph (2014) state that the full transfer of public housing
management to private or non-profit sector in Australia is unlikely, while increased moves to
management organisations that function on a fee-for-service basis is feasible.
In Britain, reduced investment in council housing by successive UK governments undermined the
viability of social housing and had cumulative effects on the quality of the stock. Since the major
housing reforms of 1989 in the UK, there has been expanding stock transfers, increased private
finance, and the development of registered social landlords (MacLennan, 2007). Social housing in
the UK is characterised by housing need and allocation determined by the landlord; rents below
market levels and security of tenure; low income tenants recieving rent subsidies; and requirements
on social landlords to improve housing stock (Gibb & Trebeck, 2009). There are three social housing
provider types in England (Gibb & Trebeck, 2009; Whitehead, 2014a):
1. Council or local authority housing – owned and managed by the local authority with
financing ring-fenced from other council financial activities
2. Arm’s Length Management Organisations (ALMOs) – fully council owned companies which
separate strategic and operational functions of the local authority
3. Housing associations – non-profit, independent organisations which developed from council
transfer of housing stock (LSTV), and may access public funding for development
Pawson and Wiesel (2014), comparing social housing reform in Australia and the UK, note that the
UK transfers are ‘asset divestment’, whereas in Australia usually ‘management outsourcing, and
‘potentially reversible’.
Social Housing Working Group Report October 2015 – Appendix Two International Context
85
58
Arm’s Length Management Organisations in the UK
Arm’s Length Management Organisations (ALMOs) are independent entities (usually
companies) established by local authorities to manage and improve its housing stock
(Cowan, 2011). The local authority retains responsibility for the strategic housing role
and day-to-day management of the housing stock is moved to the ALMO (Gibb &
Trebeck, 2009). The ownership of the housing remains with the local authority, and
as such tenants’ status and rights remain the same (Cowan, 2011). ALMOs are
governed by a board constituted of one-third tenants, one-third councillors and onethird independent members (Cowan, 2011; Gibb & Trebeck, 2009). The ALMO
operates under a management/service level contract with the local authority, with
the ALMO operating with a degree of independence in managing the housing stock.
Gibb and Trebeck (2009) describe ALMOs as provisional in status, and without longterm strategy. The development of an ALMO is often a temporary solution where
stock transfer was not feasible in the first instance, but allowed time for the
organisation to prove performance and trust to allow large scale stock transfer (or
LSVT). As such, ALMOs have been criticised as being the first stage in two-stage
privatisation, aligned with achieving full stock transfer in the longer term (Glynn,
2009; Pawson & Gilmour, 2010).
The creation of ALMOs was appealing to local authorities given the associated
financial incentives in the UK via performance-based resource allocation’ (Pawson &
Gilmour, 2010). ‘High-performing’ ALMOs were able to access addition public
subsidies above what would be accessed by local councils (Pawson & Gilmour, 2010;
Reid, 2007). There has been concern that the service agreements for these ALMOs
show poor value for money relating to local authority services such as legal, IT and
human resource services (Reid, 2007).
Social Housing Working Group Report October 2015 – Appendix Two International Context
86
59
Large Scale Voluntary Transfer LSVT and Housing Associations
Housing associations are non-profit, independent social housing providers who
receive government capital grants to build and repair housing, but rely increasingly in
private financing for loans (Gibb & Trebeck, 2009; Whitehead, 2014a). Under a LSVT,
a local authority transfers the ownership of the housing stock to a new or existing
registered provider, with the aim to leverage private finance.
Smyth (2013) states that after the UK Right to Buy policy, in which council tenants
were assisted to buy the homes they rented, LSVTs have had the largest impact in
marketising council housing. Transfers have been associated with financial problems
relating to the poor state and low valuations of the housing stock and over-hanging
debt, and political opposition and campaigns against stock transfer as a form of
privatisation.
In the UK, housing associations receiving LSVTs, while funded through the private
sector, can bid for capital grants. The Decent Homes Programme to improve the
condition of housing stock to meet the Decent Homes Standard gives supply-side
subsidies to local authorities or ALMOs which achieved efficient targets. However, as
Whitehead (2014a) explains, “the valuation of housing stock at the time of sale takes
account of the investment necessary to bring it up to the Decent Homes Standard
and the expected rental income based on regulated rents. In some cases, the
estimated value in negative; if so, a dowry is paid to enable the transfer to take
place” (p. 111). The Decent Homes Programme was completed in 2010, however a
large backlog of stock that does not meet the standard remains (Whitehead, 2014a).
Housing associations are regulated, and operate by business plan and set of
agreements relating to tenant rights, rent levels, maintenance and repair of stock
(Gibb & Trebeck, 2009). They are governed by a board often comprised of
independent persons, local councillors and tenants. More recently in the UK, several
housing associations have consolidated into large group structures resulting from
financial pressures (Whitehead, 2014; Gibb & Trebeck, 2009).
Social Housing Working Group Report October 2015 – Appendix Two International Context
87
60
2. Management and accountability
The process of stock transfer has introduced market-oriented governance systems into the provision
of social housing, and concerns over control and accountability have arisen. There has been variation
in how UK housing associations are governed and how they are accountable to external
stakeholders. They also vary in their own internal organisational culture (Pawson & Mullins, 2010).
Murie (2014) describes the impact of rapid privatisation in Europe, often occurring without robust
legal documentation for management and maintenance responsibility and organisational
arrangements. This left questions of where the responsibility for and cost of maintenance and
ongoing management lay. In Britain, the development of ALMOs developed out of concerns that the
transfer of ownership removes the social housing stock from the local authority’s direct control
(Pawson & Mullins, 2010). Pawson & Mullins (2010) explain ALMOs: ‘local authorities continue to
own the asset, but with an institutionalised separation of operations from strategy and governance
vested in autonomous boards with minority local authority membership’ (p. 4). In Australia, even
where ownership and management remains with local authorities modernisation has been pursued
through introduction of some private sector management techniques such as performance
indicators (Pawson & Gilmour, 2010). Cowan (2011) emphasises that there is an important,
continuing relationship between the housing provider and the local authority, requiring ongoing
management and oversight for effective service delivery and strategic direction.
Opposition to stock transfers are often centred around accountability, that democracy and tenant
control is undermined by the replacement of elected councillors to an unelected board (Smyth,
2013; Robbins, 2002). Smyth (2013) describes the removal of accountability through democratic
control under stock transfer policy – accountability through electing of councillor landlords, and
lobbying of councillors by tenants. He argues while some accountability may be retained through
tenant participation on governing boards and consultation, control and democracy must also include
an “exercisable element of control, such as ‘reward or sanction’” (p. 50).
Accountability is also related to the regulatory environment. Housing associations are independent
bodies, but are regulated by the state, and recieve state funding and subsidies. In-house provision of
social housing is regulated through local regulations and relationships between tenants and local
council landlords. For example, in New Zealand in order to recieve the Income Related Rent Subsidy,
the social housing provider would be subject to regulation by the Community Housing Regulatory
Authority. An ongoing contractual relationship with the local authority to monitor compliance would
also shape accountability. Smyth (2013) outlines a case study whereby tenants remaining with local
authorities had rent rises halved, and tenants with a housing association experienced rent rises –
despite higher regulatory bodies, there was no regulatory intervention. Smyth (2013) also outlines
the undermining of the posit that housing associations must at all times put the interests of tenants
first, where in fact the private finance provider has increased power and their interests may take
precedence over tenants.
Social Housing Working Group Report October 2015 – Appendix Two International Context
88
61
3. Finance
The status of housing associations who deliver public services through public and private funding
aligns with the ‘moderisation of public services’, illustrating the devolution of public services from
state to market and ‘exposure of public services to commercial disciplines’ (Pawson & Mullins,
2010). The key driver of the transfer of housing from local authorities in Europe has been financial,
shaped by growing concerns over public expenditure, and the need to secure resources to fix the
state of disrepair in council housing stock (Pawson & Mullins, 2010; Elsing et al., 2014). The purchase
of the housing stock and the capacity of the new organisations to manage the asset, via private
financing, is therefore affected by the valuation of the stock, finance loan terms, business plan
viability (Pawson & Mullins, 2010). Hodkinson et al. (2013) explain British councils’ ability to
maintain housing stock was constrained by the reductions in budgets, tight controls on local
authority borrowing saw some local authorities motivated to sell housing stock (‘LSVTs’ to housing
associations) to generate proceeds from a sale. Where housing stock has a positive valuation, local
authorities benefit from receiving a capital receipt which can be used to reduce debt and for other
purposes (Cowan, 2011). On the other hand, if the housing stock has a negative valuation, local
authorities may still be seen to benefit from the removal of obligations and maintaining stock to a
decent standard (Cowan, 2011). Stock transfer is associated with increased reliance on private
financing, long-term centralisation and commericalisation of the non-profit sector (Hodkinson et al.,
2013).
Across Europe there is variation in the financing of social housing provision, but it has been
historically shaped by national government subsidies, grants to developers and the use of
government-sponsored debt. More recently, the financing of social housing provision has become
more complex and focusing on reducing public expenditure, effective use of existing social housing
assets through incentives, and targeting of assistance to those most in need (Whitehead, 2014b).
While non-profit housing providers will remain subject to government regulation by way of
accreditation and registration, they hold independent constitutions and can raise private finance and
bear financial risk. In Australia, the UK and the United States, the placing of the ownership of
housing assets within private entities has encouraged community housing providers to take
commercial risks and generate profits (Blessing, 2013). Similar to other countries, Australia’s reforms
have aimed to reduced operational costs related to public housing, moving towards
commericalisation and a focus on efficiency (Jacobs et al., 2013). In some European countries, for
example the Netherlands and Sweden, social landlords operate on a non-profit basis, and in others,
such as Germany, can return profits and contractual commitments to a social housing role are shortterm (Pawson & Mullins, 2010).
In Australia, there are concerns about the capacity of community housing organisations to recieve
and manage social housing stock, firstly as many are very small, and secondly lack the capacity to
maintain and develop poor quality stock (Jacobs et al., 2013). Jacob et al. (2013) explain: “Complex
issues around the existing level of accumulated maintenance and upgrade liabilities and the
associated need for attaching government subsidies or ‘dowries’ would need to be addressed by
governments and the non-profit sector before large-scale transfers occur” (p.195). At present, the
transfer of stock and development of the non-profit sector is undermined by the current financial
arrangements, with questions remaining as to whether funding arrangements will be adequate for
the non-profit sector to meet the increasing demand for social housing in Australia (Jacobs et al.
2013). The wider economic environment needs to be taken into account regarding the private
financing of stock transfers, for example, interest rates and banking practices following the global
financial crisis, risks associated with property investment, and land and property asset values. “The
advantages of housing associations in borrowing outside of public expenditure could perversely
become less significant in the context of a situation where overall government debt had, in any case,
Social Housing Working Group Report October 2015 – Appendix Two International Context
89
62
ballooned well beyond previously accepted limits” (Pawson & Mullins, 2010). The sale of social
housing stock has also becoming an increasingly common strategy of housing associations, with
revenue from sales contributing to future investment and renewal of stock (Elsinga et al., 2014).
The Netherlands has a large social housing stock owned mostly by housing
associations. These housing associations freely buy and sell the dwellings on the open
market, and are financially independent from the government since 1995 when loans
and subsidies were abolished (Esling & Wassenberg, 2014; Scanlon, 2014). While the
number of municipal-owned housing stock was reduced, more recently the global
economic crisis undermined the business model in social housing provision (Scanlon,
2014). The change in economic conditions has seen housing associations retreating to
core business and focusing more on revenue (Scanlon, 2014; Ferarri, 2013), and in
turn the Netherlands have seen a reduction in the quality of life of social housing
tenants (Scanlon, 2014). The current government is preparing to increase municipal
control over housing associations (Scanlon, 2014).
The Australian social housing sector has also been faced by declining budgets, and non-profit
provider organisations have experienced increased costs related to maintaining and renovating poor
quality stock (Jacobs et al., 2013). Similar to the UK, Australian social housing providers have also
experienced rising administrative costs associated with housing high-needs tenants. Often these
providers have sold off assets to cover administration costs, with the consequence of declining stock
numbers (Jacobs et al., 2013). Jacobs et al. (2013) state there is pessimism around the viability of
non-profit owned and managed public housing in Australia, and that ‘It is almost certain therefore
that public housing will remain a residualised tenure for a declining proportion of generally
disadvantaged Australian households with worsening structural deficits, declining stock numbers
and declining stock quality” (p. 197).
Through stock transfer, the ownership of social housing stock becomes a mix between public and
private, which can create legal and financial challenges in regards to the division of responsibilities of
owners, property rights, and quality and organisation of the provision of the housing (Gruis et al.,
2009). In addition, both sides often do not hold adequate financial resources for maintenance and
development (Gruis et al., 2009). Pawson & Gilmour (2010) explain the difference in financial risk
faced by housing associations in Britain and Australia: “By their very nature, housing associations
(unlike local authorities) are subject to financial risk … Within the context of the relatively large and
robust housing association sector as exists in Britain, it has until now always proved possible for any
such landlords to be ‘rescued’ (without recourse to public funding) via a merger with a larger and
more financially secure counterpart association … In the current Australian context, with the
community housing sector only at an early stage of development, the scope for such a rescue action
is much more limited” (p. 253). In addition, Pawson & Gilmour (2010) note that the relatively
generous funding of income-related rents and demand-side financial support in Britain is not
accessible in Australia, and affects the feasibility and/or form of stock transfer. In Australia, a
housing association’s surplus rental income is narrow compared to Britain, and would restrict their
ability to attract private debt finance (Pawson & Gilmour, 2010). “The credit crunch may
compromise the attractiveness of the housing association model to the extent that the new climate
has led to ‘more expensive money’ and has re-emphasised the exposure of associations to a range of
business risks” (Pawson & Gilmour, 2010, p. 257).
Social Housing Working Group Report October 2015 – Appendix Two International Context
90
63
4. Outcomes
There is ongoing debate and controversy as to outcomes of stock transfer. Murie (2014) argues that
privatisation of social housing has not always resolved existing problems, and has generated new
issues for policy. These issues are linked to costs and efficiency, performance culture, management,
accountability and democracy, and residualisation.
The supporters of privatisation argue that the production and public management of social housing
has high costs and is inefficient, and benefits would result from the introduction of market
mechanisms in the provision of social housing. Pawson and Gilmour (2010) describe benefits of
transfer to housing associations from large municipals in Britain relating to improved organisational
culture. The locally-based housing association has been described as an opportunity to meet tenant
and community needs and to maintain in a more effective business operation (Pawson & Mullins,
2010), such as through “improved management, better resources, financial independence, the
impact of new stakeholders, opportunities for staff to operate more entrepreneurially, to enjoy
enhanced access to training and promotion opportunities and for tenants to become more engaged”
(p. 27). It has been noted that while a key rationale of the policy of housing stock transfer to housing
associations in Australia was to increase the supply of housing housing through enabling housing
associations to leverage private finance, it was found that by 2010 very few housing associations had
actually done this (Victoria Auditor General, 2010). This remains a contentious issue, with little
robust evidence to show that local authorities are less efficient providers.
Elsinga et al. (2014) discuss how, given the rules around public spending, LSVTs have been successful
in the UK by being able to leverage private funding to improve the quality of stock. However, the
stock transfers were controversial in that government debt was only written-off if tenants voted in
favour of stock transfer to a new landlord, highlighting political preference for a funder-provider split
where local authorities maintain strategic roles rather than day-to-day provision and management of
social housing (Elsinga et al., 2014).
An evaluation of stock transfer in Scotland
Gibb & Nygaard (2006) examined evidence from an evaluation of over 100
housing stock transfers in Scotland. These transfers typically involved the transfer
of the management and legal ownership of the business as a going concern, that
is, transfer of the housing stock with tenants in situ. Following a successful ballot
of tenants, the transfer is based on a guaranteed income from rent, improvement
programme and other tenant rights, outlined in a formal business plan funded by
private finance to be repaid via rental income. The transfer of stock is based on
contracted commitments to achieve both financial and social ends, which include
the quality of the housing, quality of services, tenant participation, and
performance measures and incentives. Gibbs & Nygaard (2006, p. 837) present
the following general conclusions regarding the performance post-transfer:
-
There is evidence to suggest that the performance of the transfer
organisations meets the transfer objectives in terms of housing management,
with void levels generally lower than was expected at the time of transfer, and
rent levels maintained within the rent promises made to tenants, and tenants
generally satisfied. However, performance appears to be associated with stock
Social Housing Working Group Report October 2015 – Appendix Two International Context
91
64
-
size and economies of scale, with smaller providers more vulnerable to
merger and rationalisation.͒
Management costs are slightly higher and turnover per unit is slightly lower
than expected.
Gibbs & Nygaard (2006) note, however, that many of the transfer providers
benefited from re-financing and operated in a fairly stable financial environment.
There was also ongoing criticism of the changeable nature and increasing degree
of regulation: “One very clear use of power in the social housing world is the
state’s ability to set up long-term business arrangements with landlords, but then
increase the regulatory burden without additional provision of financial support”
(p. 843).
There is very little published critique of tenants’ experience of stock transfer. Smyth (2013) explains
that there is an unbalanced nature of power and finance in stock transfer processes, and questions
the democracy of the process. The long-term implications of accountability and corporate
governance are democratically questionable and claims that post-transfer tenant participation is
enhanced are largely rhetorical (Smyth, 2013; Pawson & Wiesel, 2014; Pawson, Davidson, Morgan,
Smith & Edwards, 2009). There is some evidence that tenant satisfaction post-transfer may improve
in some cases, but must be seen in light of the new landlords being better resourced through capital
grants in the UK (Gibb & Trebeck, 2009).
Another important issue post-transfer has been raised in relation to tenant allocation processes not
being upheld, reflecting the disadvantage of introducing a performance culture (Pawson, Milligan,
Weisel & Hulse, 2013). In Victoria, Australia the social housing programme was also criticised by the
Auditor General regarding the lack of safeguarding equity in access. These housing associations were
not ensuring the most vunerable tenants were housed, but ‘creaming’ the least vulnerable. “The
financial goals housing associations are required to meet provide an incentive to house higherincome tenants” (Victoria Auditor General, 2010, p. 3). The Auditor General also found evidence of
discrimination, and high rents. While the housing associations are subject to regulation, there was
little monitoring and little longevity in strategic goals for social housing as obligations to provide
social housing ended after 10 years (Victoria Auditor General, 2010). In the UK, ALMOs and housing
associations where focus is maintained on meeting targets even if not aligned with strategy and
tenant priorities (Gibb & Trebeck, 2009). Pawson and Gilmour (2010) discuss tensions faced by
housing associations in Britain between competing financial objectives, that is, financial
considerations versus better governance priorities. These authors raise concerns around the extent
to which housing associations can both reap economies of scale and develop organisational
structures which promote local accountability.
Hodkinson (2013) argues that privatisation, residualisation and neoliberalisation of social housing
provision can lead to a situation whereby “social housing becomes more expenisve, new waves of
gentrification and stock transfer take place, leading to a rapid growth in insecure and unaffordable
housing, with all the social consequences that this entails” (p. 10). There has been a recent shift in
who is being housed in social housing in the UK, with a considerable reduction in social housing
being used to house the homeless population (Wilcox & Pawson, 2013). Whitehead (2013) explains
that housing associations are currently reevaluating the allocation of housing in light of cutbacks in
welfare, focusing more on housing low-income working households, creaing unmet need for the
least well-off. In addition, housing associations are increasingly using short, provisional tenancies
and fixed-term tenancies eroding security of tenure (Whitehead, 2014). Onselling of social housing
Social Housing Working Group Report October 2015 – Appendix Two International Context
92
65
following privatisation was apparent in Germany along with significant rent increases and increased
pressure on remaining stock (Elsing et al. 2014).
Social housing in Scotland
There are two main types of social housing provision in Scotland:
1. Social housing owned by local authorities (council housing)
2. Social housing owned and managed by housing associations
(non-profit organisations which recieve capital grants from the
government.
Council housing has faced a dramatic decline over the past 30 years,
from two in three households living in council housing in the 1970s,
to one in 10 in 2011. Homeownership rates have increased over this
time. In the 1980s, the government promoted housing associations
as an alternative to local authorities for the provision of social
housing, and the government provided generous capital subsidies.
In the early 2000s, large scale stock transfer of council housing to
housing associations took place, and the government wrote off
their outstanding debt. Post the 2008 recession, Scotland has seen
increasing demands for social housing however there have been
budget cuts and disinvestment in the social housing sector. Since
2011, all social landlords are audited and regulated by the Scottish
Housing Regulator. The transfer of council housing stock over the
past 30 years has been heavily criticised: “This long-term return to
greater private provision of housing has brought with it a marked
growth in homelessness and a rise in the use of insecure
accommodation” (Robertson & Serpa, 2014, p. 46). “The Scottish
government is experimenting with schemes to deliver housing that
is less reliant on public subsidy by levering in private funding ...
While such ventures demonstrate administrative and financial
creativity at a time of great austerity, they are certainly not a longterm solution to the growing and growing housing demand”
(Scanlon, 2014, p. 57).
Milligan and Randolph (2014) summarise approaches and challenges in Australia relating to
privatisation in Table 1. Gibb & Trebeck (2009) recognise difficulties in attributing change in
outcomes given many variables in the provision of social housing, for example the governance and
structure of the organisation, business practices, external or market forces, organisational history,
and timing of key decisions. The extent of change is perhaps a key feature (Pawson & Mullins, 2010).
Pawson, Milligan, Wiesel and Hulse (2013) discuss the difficulties in making definitive evaluations of
stock transfer in Australia to date: “There has been a lack of clarity and specificity about how
transfers should or could benefit the social housing system and ... tenants; performance standards
and measures related to the efficiency and effectiveness of successor landlords have been largely
absent; and there has been almost no monitoring of outcomes of transfers to date” (p. 65).
Social Housing Working Group Report October 2015 – Appendix Two International Context
93
66
Table 1. Australian approaches and challenges concerning the management of privatised housing
Policy/strategy
Legal framework
Organisational
structure
Financial
resources
Culture
Human resources
Housing quality
Main features
Problems and challenges
The central government has no explicit policy
to stimulate maintenance in mixed tenure
estates but the privatisation of public housing
management services is stimulated by the
government’s retrenchment from housing
provision.
State-based legislation provides for title to be
held over ‘strata’ of multi-unit housing. Strata
owners are jointly responsible for the building
and its insurance. In some recent cases,
contractual arrangements have been made
with private organisations to carry out
redevelopment and management.
An owners’ co-operation self-manages the
building and common areas. In practice, dayto-day management is usually contracted out
to a private management company. In the
cases discussed in this chapter, a new placebased management entity manages the public
housing stock while a Public Private
Partnership is set up to redevelop the estates.
Strata-owners contribute to the shared costs
via charges or levies. In͒the cases discussed in
this
book,
privatisation
through
redevelopment͒is financed by a mix of public
subsidy for public housing renewal and
management and profit from land and
property sales for redevelopment.
Australia has a relatively long tradition of
privatisation through individual dwelling sales,
but a more recent experience with
privatisation of public housing management
and redevelopment. It has taken some time
for private partners to understand the nature
of social housing provision, and vice versa. A
collaborative relationship between public and
private sector actors is emerging nevertheless.
Day-to-day management within mixed
ownership is usually carried out by the
landlord or contracted out to private
organisations. Privatisation of redevelopment
and management requires a mix of (public and
private) community-based managers.
Privatisation occurs in a context of a strongly
residualised public housing stock that consists
mostly of single-family dwellings in low rise,
often suburban, estates. Privatisation now
encompasses redevelopment of estates,
including private investment, leading to a
restructuring of tenure.
The new models of non-government
management are in an experimental stage.
housing
Recently privatised estates involve a complex range of
contracts that specify all aspects of the service delivery. In
case of ultimate collapse, management reverts to the
public sector.
The new approaches have a high degree of complexity of
structure and encompass uncertainty of performance
over the long-term.
Costs of redevelopment and management exceed
anticipated funds in the longer term. Risk sharing may
prove to be poorly assessed and difficult to reposition in
contractual arrangements.
Privatisation through redevelopment and management
requires ongoing consultation with the community and
strengthening opportunities and support for resident
involvement, strong commitment to harmonious working
relationships across public, community-based and private
interests and investing in processes to support cohesive
cultures.
Public sector skills and values have to be brought into the
private management organisations.
The main question relating to housing quality is if longerterm maintenance and repair funding requirements will
be met by the negotiated fee. Furthermore, the
effectiveness of the new social mix and place-based
approach to community building has yet to be proven in
practice.
Social Housing Working Group Report October 2015 – Appendix Two International Context
94
67
(Milligan & Randolph, 2009, p. 39)
Conclusion
“Housing was for a long time conceptualised as a public community asset, before
being recast in a private individual mould” (Scanlon, 2014, p. 57).
Social housing reform and transfer of stock to be seen within wider social welfare and neoliberal
economic reform in the public sector across Europe and Australia. Countries with strong traditions of
providing social housing have moved to privatise their housing stock, albeit through a range of
processes and to varying degrees (Murie, 2014).
In the UK, the provision of social housing has moved more into the private sphere and introduced a
more prominent role for market forces (Blessing, 2013). Local authorities employ independent
organisations to fulfil their mandates for social housing provision through market mechanisms, and
increasingly use private investment as leverage (Blessing, 2013). Pawson & Gilmour (2010) describe
a key motivation for transfer of social housing stock in Britain as financial; stock was transferred to
housing associations in order to access private finance not accessible for local authorities as state
entities. The transfer of housing stock to a community housing provider, where council retains
ownership potentially gives more scope to ensure that this housing remains social housing in the
long-term. However, there is no guarantee that transferring to a community housing provider will
enable an increase in the social housing stock.
While in Australia local authorities still hold social housing stock, the growth of community providers
is continuing. The funding of social housing can be by way of rental income, borrowing, and income
from others, including government subsidies. Whitehead (2014b, p. 318) discusses how the
interaction of several factors is important to note, such as how rents are determined, the legal
ownership of the stock, the capacity of owners to borrow, past capital gains, regulatory structures,
instruments to access contributions from others, and the extent of local authority commitment to
social housing. The social housing sector across Europe and Australia is generally characterised by
ongoing privatisation, reductions in supply subsidies and shifts towards income-related demand-side
subsidies, in addition to residualisation, increasing unmet need, moves away from government
involvement and increasing diversity in provision (Scanlon & Whitehead, 2014; Murie, 2013). In
Europe, growth in waiting lists and increased targeting to need has increased the proportion of
social housing being used as emergency accommodation, and greater insecurity for households.
“There are important debates about the local impacts of stock transfer on democracy and
accountability – has the process created a democratic deficit, and what levers remain available to
local authorities to fulfil risisng expectations for their housing strategy and enabling role?” (Pawson
& Mullins, 2010, p. 9). Through stock transfer, there is increased power of the private finance
provider, a structural change in the regulation and provision, which together may undermine
tenants’ ability to exercise direct democratic accountability post-transfer (Smyth, 2013). Transferring
the provision of social housing to the non-profit sector increases the number of stakeholders with
potentially differing objectives, including private lenders (Gibb, 2006). Ginsburg (2005) describes
stock transfer policy as “a decisive shift towards monopolistic private landlordism, with public
control and accountability fading away over time – a true privatization” (p. 132). Pawson and Mullins
(2010) conclude that “there are few grounds for claims that stock transfer has a minimal impact and
is simply a financial manoeuvre” (p. 27). It is notable that the Netherlands is shifting back to local
authority provision of social housing, based on notions of a ‘level playing field’ and ‘responsible
Social Housing Working Group Report October 2015 – Appendix Two International Context
95
68
public stewardship’, highlighting that the need to meet growing housing need is overshadowing
pragmatic considerations (Blessing, 2013).
Pawson, Milligan, Wiesel and Hulse (2013) in a review of stock transfer in Australia, highlight the
paucity of evidence to ascertain the specific outcomes of stock transfer, such as tenant satisfaction,
leveraging private finance, improved organizational structure and service delivery. Evaluation of
international mechanisms for the provision of social housing must account for significant scale and
institutional difference when considering models overseas. For example, while research presents
evidence that stock transfer in Europe has in some cases delivered benefits to tenants by way of
better governance and improved quality of housing, there has been significant government input
through a range of subsidies. Similarly, when considering different mechanisms for the provision of
social housing, local authorities will need to take into account the size and age of stock, the cost of
managing and maintaining the housing, and the level of political commitment to the sector. Social
housing stock can be viewed as a commodity and source of capital accumulation, or as a means to
meet housing need within the city and reduce social inequality and poor outcomes for those who
are unable to meet housing need through the mainstream market. Maclennan (2007) argues that
“some councils and some [housing] associations are efficient and effective managers and others are
not” (p. 532). Reviews and reform need to consider the ability of mechanisms to delivery the chosen
policy objectives and efficient housing provision for low-income households.
“If it is assumed that a key objective of stock transfer, in its essence, is to make
more efficient use of scarce resources, then the stock transfer policy can be
examined in light of the contractual arrangements accompanying the delivery of
housing for rent. The question then becomes what efficiency gains does a stock
transfer policy deliver vis-a`-vis public delivery of the same service? There are two
dimensions to this question. First, a political one—how can the provision of social
goods be ensured and how does stock transfer affect the distribution of political
power (and the ability to utilise electoral and economic benefits) with respect to
social housing? Second, an economic dimension—how can social housing be
delivered in a way that is less resource intensive and more responsive to local
needs?” (Gibb & Nygaard, 2006, p. 844).
Social Housing Working Group Report October 2015 – Appendix Two International Context
96
69
References
Blessing, A. (2013). Public, private, or in-between? The legitimacy of social enterprises in the housing
market. Voluntas, 26, 198-221.
Cowan, D.S. (2011). Housing policy and law. Cambridge: Cambridge University Press.
Elsinga, M., Stephens, M., & Knorr-Siedow, T. (2014). The privatisation of social housing: Three
different pathways. In K. Scanlon, C. Whitehead & M. Fernández Arrigoitia (Eds.), Social
housing in Europe (pp. 389-413). London: John Wiley & Sons.
Elsinga, M., & Wassenberg, F. (2014). Social housing in the Netherlands. In K. Scanlon, C. Whitehead
& M. Fernández Arrigoitia (Eds.), Social housing in Europe (pp. 21-40). London: John Wiley &
Sons.
Ferrari, E. (2014). The social value of housing in straitened times: The view from England. Housing
Studies. DOI: 10.1080/02673037.2013.873117
Gibb, K., & Nygaard, C. (2006). Transfers, contracts and regulation: A new institutional economics
perspective on the changing provision of social housing in Britain. Housing Studies,͒21(6),
825–850.
Gibb, K., & Trebeck, K. (2009). Different roads? Evidence about the changing provision of English
social housing. International Journal of Housing Markets and Analysis, 2(4), 373-391.
Ginsburg, N. (2005). The privatization of council housing. Critical Social Policy, 25(1), 115–135.
Glynn, S. (2009). Where the other half live: Lower income housing in a neoliberal world. London:
Pluto Press.
Gruis, V., Tsenkova, S., & Nieboer, N. (2009). Management of privatized housing: International
policies and practice. London: Blackwell.
Hodkinson, S., Watt, P., & Mooney, G. (2013). Neoliberal housing policy: Time for a critical
reappraisal. Critical Social Policy, 33(3), 3-16.
Jacobs, K., Berry, M., & Dalton, T. (2013). ‘A dead and broken system?’: ‘Insider’ views of the future
role of Australian public housing. International Journal of Housing Policy, 13(2), 183–201.
Maclennan, D. (2007). Better futures for social housing in England. York: Joseph Rowntree
Foundation.
Milligan, V., & Pinnegar, S. (2010). The comeback of national housing policy in Australia: First
reflections. International Journal of Housing Policy, 10(3), 325–344.͒
Milligan, V., & Randolph, B. (2009). Australia. In V. Gruis, S. Tsenkova & N. Nieboer (Eds.),
Management of privatized housing: International policies and practice (pp. 19-43). London:
Blackwell.
Murie, A. (2014). Housing and neighbourhoods: What happened after the sale of state housing to
Social Housing Working Group Report October 2015 – Appendix Two International Context
97
70
sitting tenants in England? In K. Scanlon, C. Whitehead & M. Fernández Arrigoitia (Eds.), Social
housing in Europe (pp. 415-431). London: John Wiley & Sons.
Murie, A. (2013). Public housing in Europe and North America. London: Springer.
Pawson, H., Davidson, E., Morgan, J., Smith, R., & Edwards, R. (2009). The impacts of housing stock
transfers in urban Britain. York: Joseph Rowntree Foundation.
Pawson, H., & Gilmour, T. (2010). Transforming Australia's social housing: Pointers from the British
stock transfer experience. Urban Policy and Research, 28(3), 241-260.
Pawson, H., Milligan, V., Wiesel, I. and Hulse, K. (2013). Public housing transfers: Past, present and
prospective, AHURI Final Report No.215. Melbourne: Australian Housing and Urban Research
Institute.
Pawson, H., & Mullins, D. (2010). After council housing: Britain’s new social landlords. Basingstoke:
Palgrave Macmillan.
Pawson, H., & Wiesel, I. (2014). Tenant agency in Australia's public housing transfers: A comparative
assessment. International Journal of Housing Policy, 14(4), 344-367.
Reid, B., Vickery, L., Bradburn, A., & Verster, B. (2007). Learning from Arms Length Management
Organisations – The experience of the first three rounds. London: Department for
Communities and Local Government.
Robbins, G. (2002). Taking stock: Regeneration programmes and social housing. Local Economy,
17(4), 266–272.
Robertson, D., & Serpa, R. (2014). Social housing in Scotland. In K. Scanlon, C. Whitehead & M.
Fernández Arrigoitia (Eds.), Social housing in Europe (pp. 43-59). London: John Wiley & Sons.
Scanlon, K., Whitehead, C., & Fernández Arrigoitia, M. Social housing in Europe. London: John Wiley
& Sons.
Smyth, S. (2013). The privatization of council housing: Stock transfer and the struggle for
accountable housing. Critical Social Policy, 33(1), 37–56.
Whitehead, C. (2014). Social housing in England. In K. Scanlon, C. Whitehead & M. Fernández
Arrigoitia (Eds.), Social housing in Europe (pp. 105-120). London: John Wiley & Sons.
Whitehead, C. (2014). Financing social rented housing in Europe. In K. Scanlon, C. Whitehead & M.
Fernández Arrigoitia (Eds.), Social housing in Europe (pp. 315-330). London: John Wiley &
Sons.
Wilcox, S., & Pawson, H. (2013). UK Housing Review 2013. York: Chartered Institute of Housing.
Victoria Auditor General. (2010). Access to social housing. Retrieved
http://download.audit.vic.gov.au/files/20100623_Social_Housing_Full_Report.pdf
Social Housing Working Group Report October 2015 – Appendix Two International Context
98
from
71
Appendix Three: Ministry of Social Development Criteria for
Eligibility for Social Housing and the Income Related Rent Subsidy
To qualify for social housing a client must:
x
be aged 16 years or over
x
meet the residency requirements
x
meet an income and asset test and
x
be at risk or in serious housing need (as assessed through the Social Allocation System SAS)
Social Allocation System (note: only A and B applicants are eligible for social housing)
Risk
rating
Short
description
Detailed description
A
At risk
The well-being of the household is being severely affected (or is seriously at risk)
and there is an immediate need for action due to the unsuitability and/or
adequacy of their current housing. Further, the household is unable to access
and/or sustain suitable, adequate and affordable alternative housing.
B
Serious
housing need
The well-being of the household has been affected in a significant and persistent
way due to the unsuitability and/or inadequacy of their current housing. The
household is highly unlikely to be able to access and/or sustain suitable,
adequate and affordable alternative housing
C
Moderate
need
The household is disadvantaged and this is likely to be compounded over time
due to the unsuitability and/or inadequacy of their current housing. The household
can access and sustain alternative housing with assistance.
D
Low or
need
no Households experiencing low housing need for which there are other viable
housing options. The household can access and sustain alternative housing
without assistance.
Source:
http://www.workandincome.govt.nz/map/social-housing/assessment-of-eligibility/housing-needpriority-ratings-01.html
Social Housing Working Group Report October 2015 – Appendix Three: MSD Social Housing and
Subsidy Criteria
99
72
Appendix Four: Social Housing Strategy
Palmerston North City Council
Social Housing Strategy
(2015)
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
100
73
1. Executive Summary
1.1 The Palmerston North City Council has a long history of social housing provision. The rapidly
changing context within which this is delivered, however, requires the Council to make some
decisions about future direction and the nature of this provision.
1.2 This Strategy affirms the Council’s commitment to supporting social housing in the future.
1.3 The Council provides 311 subsidised social housing units for older people and people on the
Supported Living Payment (formerly the Invalid’s Benefit). The Council also has around 100
public housing units run as a commercial enterprise.
1.4 There have been significant recent changes to the national social housing environment that
impact on the Council’s social housing role. Council’s future commitment to social housing is
made within this context.
1.5 There are four key issues underlying any Council decisions made about social housing
provision in the future. These are:
1.5.1 Ageing population and changing demand for housing
1.5.2 Quality of the current housing stock
1.5.3 Housing affordability
1.5.4 Unmet social housing need
1.6 The Social Housing Strategy establishes the Council’s role in providing social housing for
three groups of tenants:
1.6.1 Older people on low incomes
1.6.2 People with disabilities who receive the Supported Living Payment
1.6.3 People on low incomes who experience barriers to accessing affordable and
appropriate rental accommodation
1.7 The first two groups will be housed in Council’s current social housing at subsidised rentals.
1.8 The third group of tenants will be housed in Council’s public housing, to be designated social
housing, at market rentals. Up to 20 of these units will be rented at a subsidised rate.
1.9 The new, larger social housing portfolio (encompassing the current 311 social housing units
and 92 public housing units) will be provided according to the following guidelines. All social
housing will be:
supported, to encourage the social wellbeing of tenants
delivered in accordance with a housing WOF scheme to support the health and wellbeing of
tenants
provided in ways that promote stability amongst social housing communities
provided in recognition that it only partially meets the City’s social housing needs and that
further provision will be developed if resources allow.
2. Introduction
Shelter is recognised internationally as a basic human right. The homes we live in affect our
wellbeing, as do our ties to the communities in which we live and work.15 The availability of
15
Housing New Zealand Corporation. (2013). Statement of Intent 2013-2016.
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
101
74
appropriate housing for all Palmerston North residents makes an important contribution to the
wellbeing of the City. The provision of social housing16 is just one small, but important, part of the
wider housing picture. Social housing sits alongside broader provisions such as building standards,
home ownership schemes and protection for tenants in contributing to the achievement of
affordable and appropriate housing for all. There is an ongoing need for social housing in Palmerston
North, and at present some of this need remains unmet. The Social Housing Strategy will set out the
future role the Council will take in social housing, taking into account what is known about the City’s
housing needs in 2015.
The Palmerston North City Council’s 10 Year Plan (2012/2022) sets out the Council’s current
commitment to its role as a social housing provider. The Council provides social housing because it
contributes to creating a caring and safe community. The whole City benefits when the overall
standard of housing is adequate because good housing promotes health and wellbeing and
encourages community stability and connection. The City’s commitment is underpinned by the
purpose of local government (as articulated by the Local Government Act 2002) “to meet the current
and future needs of communities for good-quality local infrastructure, local public services, and
performance of regulatory functions in a way that is most cost-effective for households and
businesses.”
The Palmerston North City Council has a long-established role as a social housing provider, currently
implemented according to the goals and objectives of the Social Housing Strategy (2007). This
revised Social Housing Strategy establishes a rationale for the level and nature of the Council’s
future involvement in social housing. It will ensure that service provision in this area is based on
current and future needs. The successful implementation of this Strategy will mean that the
Council’s role in social housing is well defined, and that the Council undertakes its future role in
social housing in ways that best meet the needs identified, within the framework of available
resources.
Much of the Council’s previous planning and discussion about social housing has focused on the
management of assets. The foundation of this Strategy is instead the purpose of social housing; to
provide warm and comfortable homes for people who need them. In providing this direct support,
the Council will provide security and stability for some of the City’s most vulnerable people, which
will contribute to the Council’s vision for the whole community. This document is structured
according to the identification of groups of people who could benefit from social housing
interventions by Council. The identification of these groups has been arrived at through discussions
with Councillors and third sector social housing providers, consideration of research (both locally
and more widely), and demographic information about our city.
3. Context
The Palmerston North City Council has developed its Social Housing Strategy within a national and
local context which is markedly different from that of a few years ago. Since the Social Housing
Strategy (2007) was adopted by Council there have been significant reforms of national state
housing, an increase in the number of smaller households, and a decrease in home ownership. The
Government has implemented social housing reforms which explicitly seek to devolve the provision
of social housing to the third sector. The various social housing providers (national and local) now
have to plan how best to meet changing social housing needs, in an environment where there are
limited resources.
3.1 National
16
Social housing is broadly defined as housing that is in some way supported, subsidised or targeted to
particular groups.
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
102
75
The Government’s commitment to social housing stems from its goal for all New Zealanders to “be
able to access affordable, sound-quality housing that provides secure tenure appropriate to their
needs.”17 For over 100 years there has been some government intervention in the housing market to
ensure provision for those people most in need. The early state housing schemes focused on
providing affordable accommodation for city workers, and, under the 1935 Labour Government,
expanded throughout suburban New Zealand. Since then, various administrations have held
different views about the extent to which this intervention in housing should be made. However
“since the 1950s, all governments have accepted that the state should provide homes for the
poorest New Zealanders and those who suffer racial and other discrimination in the market.”18
3.1.1 Social housing reforms
In 2010 the Government’s response to the report by the Housing Shareholders Advisory Group
demonstrated a shift in the approach to the provision of state housing. Changes have been made to
try and ensure that housing is provided to those in the greatest need. Housing New Zealand
Corporation (HNZC) has introduced reviewable tenancies for state housing to try and “make the
state housing system fairer”.19 Nationally, HNZC states that “more than a third of state houses are in
the wrong place or are of the wrong size or type to meet the nature of demand expected in the
future.”20 Locally, HNZC has also signalled that its current housing stock is not a good fit for the
requirements of its clients. It needs more small homes, as well as homes which have more than
three bedrooms. It has an oversupply of three bedroom homes. This means HNZC is selling, leasing,
and renovating properties to ensure a better fit with demand. The waiting list system for state
houses has been changed, and there are now only two levels of priority. Some applicants who
formerly qualified for HNZC are longer recorded. The only current priorities are:
Priority Eligible A - all applicants whose housing need is assessed as being "at risk" households with a severe and persistent housing need that must be addressed immediately.
Priority Eligible B - all applicants whose housing need is assessed as being "serious" households with a significant and persistent need.
In 2012 the Productivity Commission released the report of its in-depth investigation into housing
affordability. This report concluded:
“… the social housing sector will need considerable assistance if it is to scale up to the extent
required, and do so within a reasonably short timeframe. The Social Housing Fund set up to
help the community housing sector grow is not equal to the task demanded of it”.
The Government’s social housing reforms have included the 2011 establishment of the Social
Housing Unit within the Building and Housing Group of the Ministry of Business, Innovation and
Employment. Its aim is to increase the supply of social and affordable housing for New Zealanders by
administering the Social Housing Fund. It allocates funding and facilitates partnerships, including
land transfers and sale or lease of surplus state housing stock.21 The reform programme also includes
the transfer of tenant services to the Ministry of Social Development and to “facilitate transfers of
Housing New Zealand homes to community housing providers.”22 A Regulatory Authority for
17
Report to Cabinet Social Policy Committee by Ministers of Finance and Housing. (15 November 2010). A new
direction for social and affordable housing in New Zealand: Government’s response to the report of the Housing
Shareholders Advisory Group.
18
Ministry for Culture and Heritage. (updated 31 August 2007). ‘The state steps in and out – housing in New
Zealand’. www.nzhistory.net.nz/culture/we-call-it-home/the-state-steps-in-and-out
19
http://www.hnzc.co.nz/about-us/news/new-changes-to-the-state-housing-system
20
Housing New Zealand Corporation. (2011). Smarter. Faster. Fairer.
21
www.socialhousingunit.govt.nz
22
http://www.beehive.govt.nz/release/government-grow-social-housing-sector
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
103
76
Community Housing Providers has been established within the Ministry of Business, Innovation, and
Employment to approve, register and monitor Community Housing Providers in receipt of income
related rent subsidy. A key development in this process (in 2014) is the exclusion of local authorities
and CCOs from eligibility for the income related rent subsidy. Submissions to the regulations process
have pointed out that this exclusion could deter local authorities from continuing to be social
housing providers.
Most recently (in 2014) the Government has set up an Establishment Unit to investigate options to
build the social housing market, to be followed up with the establishment of an Independent
Transactions Unit to lead “the development of a fair, efficient and effective social housing market
through transactions that may involve transfers of HNZC assets (and tenants) ...”.23
3.2 Palmerston North
The Palmerston North Housing Needs Assessment undertaken by the Palmerston North City Council
in 2011 identified four main issues:
3.2.1 Ageing population and changing demand for housing
According to Statistics New Zealand there is projected to be an additional 9,400 households in
Palmerston North by 2031, and 30% of all households will be one-person households. Given the
growth of the older population, it is therefore anticipated that there will be an increased demand for
homes suitable for older people living on their own in the future. Table 1 shows that on current
projections older people will make up almost 20% of the Palmerston North population by 2033.24
Table 1: Population projections - Number and percentage of Palmerston North people aged 65+ years 2018 –
2043
Year
Number of people
65+ years
Percentage of 65+
years
Total Palmerston
North population
2018
12,700
14.6
86,800
2023
14,600
16.3
89,600
2028
17,100
18.5
92,300
2033
18,600
19.6
94,700
2038
19,800
20.4
96,900
2043
20,100
20.3
98,800
3.2.2 Quality of the current housing stock
Most Palmerston North homes were built prior to the 1980s, and do not meet modern standards of
home insulation and health. Research indicates that rental housing may be maintained more poorly
than that which is owner-occupied, and this has implications for the health of Palmerston North
people, and particularly people on low incomes whose housing choices may be limited to lower
quality housing.
3.2.3 Housing affordability
Rates of home ownership are declining as it is becoming increasingly unaffordable for people to own
their own homes. The costs of both owning and renting accommodation are rising as a proportion of
disposable income.
23
24
Cabinet Paper. (19 May 2014). The next steps in building a social housing market.
Table 1 shows population projections updated at February 2015.
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
104
77
3.2.4 Unmet social housing need
There are unmet social housing needs in Palmerston North, as evidenced by reports of social housing
agencies and the HNZC waiting list. It also appears that there is frequently a mismatch between the
housing that is available and the need that exists. For example, social housing agencies report that
they are unable to meet the demand for larger family homes and for one and two bedroom
accommodation.
This Social Housing Strategy needs to take these findings into account as they are the context within
which future social housing will operate. These four factors form the basis for the principles and
drivers of the Strategy.
3.3 Palmerston North City Council strategic direction
The Council’s 10 Year Plan (2012/22) states that its social housing activity contributes to the
Council’s vision of being a caring city. Council’s social housing is currently delivered according to the
Social Housing Strategy (2007) which this document reviews and replaces. The Council’s social
housing activity also supports the delivery of three of the Council’s Strategies; the Sustainable City
Strategy, the Social Strategy and the Domestic Energy Strategy.
3.3.1 Sustainable City Strategy
The Sustainable City Strategy (2010) establishes the Council’s commitment to becoming more
sustainable in all its activities. Strategies to become more environmentally, economically and socially
sustainable all impact on the City’s social housing. In particular, the Strategy identifies an aim for the
City to have ‘affordable and healthy housing’. While this goal has implications for all decision making
by Council about housing in the City, it has particular relevance for how Council delivers its own
social housing.
3.3.2 Social Strategy
The Social Strategy (2012) further explains the ways the Council is working to support people to take
part in the everyday life of the City. The Council is focused on increasing the social connectedness of
disadvantaged communities. The Council’s goal is to support people, and one of the ways it does this
is by providing social housing. This goal has direct consequences for the way in which Council
delivers social housing and suggests the primary focus should be on the experience of tenants and
not only on Council infrastructure.
3.3.3 Domestic Energy Strategy
The Domestic Energy Strategy (2011) aims to facilitate a decrease in the amount of non-renewable
energy used by households in Palmerston North. A reduction in domestic energy consumption is
supported by the implementation of the Warrant of Fitness for housing and the provision of
information and advice to tenants about healthy and efficient homes.
3.4 Palmerston North City Council social and public housing
Council has two distinct types of housing provision: ‘social’ and ‘public’. A decade ago, the decision
was made to designate the Council’s public housing as an investment. Prior to that, the Council’s
public housing (which was originally established as social housing through government loans) was
also considered part of the Council’s social housing delivery and was targeted to vulnerable people
on low incomes who needed affordable housing. The Council reviewed its provision of social housing
in 2007, and established the current social housing priorities.
3.4.1 Social housing
The Council has 311 social housing units providing accommodation for older people on low incomes,
and people on low incomes who have long term disabilities. The Council’s social housing currently
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
105
78
accommodates around 320 people. The housing is situated in 16 locations around the City. The
Council is the second to largest provider of social housing in the City, after the HNZC.
3.4.2 Public housing
The Council currently owns 100 public housing units which are primarily located in three complexes
– Rakaia Place, Waiheke Court, and Achilles Court. Around a quarter of the public housing stock has
three bedrooms, and the remainder has one or two bedrooms (with the exception of a couple of
larger houses).25
4. Development of the Strategy
The new strategic direction for Council housing has been reached by considering a wide range of
factors. These include the current role played by the Council, the national and local social housing
context, projected population and future social housing needs, and the requirement for the Council
to operate in a financially responsible manner. It is therefore proposed that the Council affirm its
commitment to its current tenant groups, and also expands its operation by widening its social
housing brief to include tenants who may wish to live in Council’s public housing. This section
describes the new direction.
5. Strategy Direction
The Council will provide social housing services for three main groups of tenants (see below). A
tenancy management policy will ensure that no one group will ‘crowd out’ the others.
5.1 Principles
The principles guiding the provision of this housing are:
5.1.1 Supported social housing
The Council will provide social support for all of its social housing tenants through another agency.
The current level of support to social housing tenants provides a minimal level of contact with
tenants and does not allow for any consistent level of social support. The experience of other social
housing providers in the City indicates that social support, in addition to attention to the ‘mechanics’
of providing maintenance and tenancy services, provides social benefits to both tenants and the
wider community. This could include, for example, linking tenants to support agencies before
identified issues become serious.
5.1.2 Warm and safe social housing
The Council will work with He Kainga Oranga, the Housing and Health Research Programme, to
adopt the Warrant of Fitness scheme. This project is based at the Otago Medical School, and has
now been extensively trialled in Auckland, Christchurch, Wellington, Tauranga and Dunedin. These
City Councils have all been involved in the trial, along with ACC and the New Zealand Green Building
Council. The WOF will provide a benchmark against which Council can gauge its current performance
and establish social housing standards for the future. The adoption of the WOF scheme will show
leadership by the Council for the whole rental housing market in Palmerston North.
5.1.3 Stable social housing
The inclusion of the (currently designated) public housing in the social housing service delivery will
potentially increase the stability of some rental tenancies. The market rentals being charged for
these units will mean that there is no need to constantly assess eligibility of tenants (as Housing New
25
The Council has 100 public rental properties but only 92 of them are suitable to be designated as social
housing. The remaining eight properties are rented publicly, but are held by the Council for strategic reasons
(such as the future development of Arena Manawatu).
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
106
79
Zealand is now doing) and this will promote stability. It will be in the landlord’s (currently Council’s)
interest to have at least some long term tenants in this housing.
5.1.4 Housing that meets needs
The Council’s role in providing affordable and appropriate social housing is an important one in the
social housing sector and this is affirmed. The impact of the removal of this provision on the housing
market would be significant. There is ongoing research and community sector identification of the
ongoing need for a greater provision of social housing in Palmerston North.26
The addition of the current public housing to the social housing activity will enable a greater level of
social housing need to be met, without taking over the role of the state housing provider. The
Council has clearly indicated the desire to provide a ‘back up’ to HNZC, and the goals here meet that
objective by providing a range of social housing options that complement the role of HNZC.
The Council will also endeavour to increase its provision of social housing. It will continue working
with the social housing sector in the City to advocate for further social housing support from central
government. The Council will also work actively to facilitate the development of wider affordable
housing measures and initiatives.
5.2 Drivers
This Strategy identifies five Drivers that determine the direction of social housing activity for the
Council. These set out the changes we want to achieve, actions that will achieve these changes, and
the measures of success.
Driver 1: To provide warm, stable and affordable rental housing for older people (aged
65+) on low incomes.
The Council has provided housing for older people since it first became involved in social housing in
the 1950s. There is a demonstrated ongoing and growing need for housing for this group of people.
Housing older people is Council’s traditional role, and not a role of the Housing New Zealand
Corporation. It is Council’s intention to provide housing for older people who do not own their own
homes and have difficulty affording other suitable housing. The Council will provide supported rental
housing for older people on low incomes whose main source of income is Superannuation and who
have limited assets.
Change we want to achieve
Council rental housing is provided
to older people who have high
housing needs.
Actions
What success looks like
Eligibility criteria, including an Older people with high housing
asset test27 are implemented (for needs are housed in accordance
with the Social Housing Strategy.
new tenants) by July 2015.
Council housing is affordable.
Rents are set at no more than 30%
of Superannuation.
Council tenants are supported to Support services are provided to
participate in the community and tenants.
Tenants pay less than 30% of their
income on rent.
Tenants have access to the support
services they need.
26
For example: Hall, J., Jones, N., Ryland, D. Russell, M., Tucker, C. & Waldteufel-Irvine, R. (2013). Down and
out in Palmerston North? Social sector perspectives on homelessness and housing insecurity. Working Paper,
Massey University.
27
To be eligible for social housing tenants must be Superannuitants with a Community Services Card who have
assets of less than $40,000 (excluding a vehicle, household and personal effects, and prepaid funeral
arrangements). A panel will be convened to assess applications and monitor the implementation of the Social
Housing Strategy.
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
107
80
to access the health and social
services they need.
All properties have been subject to
the Otago Medical Schoolsupported Warrant of Fitness
Scheme.
Tenants understand the measures
that can improve the health and
energy efficiency of their homes.
Bedsits are phased out and Council
housing comprises one and two
bedroom units.
Tenants report they are satisfied
with the level and type of support
available to them.
The Otago Medical School- All properties are compliant with
supported Warrant of Fitness the Warrant Fitness by June 2016.
Scheme is implemented.
Tenants live in warm, energy
Tenants are provided with efficient homes.
information and advice about how
to maximise the health of their
living environment.
Bedsits are converted to one Tenants are housed in one and two
bedroom apartments by 2025.
bedroom units and not bedsits.
Driver 2: To provide warm, stable and affordable rental housing for people on low
incomes with long term disabilities.
People with disabilities who are eligible for the Supported Living Payment (formerly the Invalid’s
Benefit) have historically been supported as Council’s ‘second priority’ for housing after older
people. The Council intends to provide supported housing for people who are eligible for the
Supported Living Payment (or its equivalent) with limited assets. This housing is an equally important
priority as housing for older people. The Council will provide supported rental housing for people on
low incomes whose main source of income is the Supported Living Payment and who have limited
assets.
Change we want to achieve
Council housing is provided to
people with disabilities who have
high housing needs.
Council housing is affordable.
Council tenants are supported to
participate in the community and
to access the health and social
services they need.
Actions
What success looks like
Eligibility criteria, including an People with disabilities and high
asset test28 are implemented (for housing needs are housed in
accordance with the Social Housing
new tenants) by July 2015.
Strategy.
Rents are set at no more than 30% Tenants pay less than 30% of their
of the Supported Living Payment.
income on rent.
Support services are provided to Tenants have access to the support
tenants.
services they need.
Tenants report they are satisfied
with the level and type of support
available to them.
The Otago Medical School- All properties are compliant with
supported Warrant of Fitness the Warrant Fitness by June 2016.
Scheme is implemented.
All properties have been subject to
the Otago Medical Schoolsupported Warrant of Fitness
Scheme.
Tenants understand the measures Tenants are provided with Tenants live in warm, energy
that can improve the health and information and advice about how efficient homes.
to maximise the health of their
energy efficiency of their homes.
living environment.
Bedsits are phased out and Council All bedsits are converted to one Tenants are housed in one and two
28
To be eligible for social housing tenants’ income must be the Supported Living Payment (or equivalent) and
assets of less than $40,000 (excluding a vehicle, household and personal effects, and prepaid funeral
arrangements). A panel will be convened to assess applications and monitor the implementation of the Social
Housing Strategy.
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
108
81
housing comprises one and two bedroom units by 2025.
bedroom units.
bedroom units and not bedsits.
Driver 3: To provide warm and stable rental housing for people on low incomes who
experience barriers to meeting their housing needs in the private market.
The Council is redefining its public housing as social housing for people who experience barriers to
accessing affordable and appropriate housing in the private market. Almost all of this housing will
continue to be provided at market rates, but will be available to people who can demonstrate their
need for assistance to meet their housing needs. Reasons for requiring this assistance may include
discrimination, lack of rental history, lack of other suitable accommodation, and urgency. Up to 20
units of these units will be provided at a subsidised rental to support people on low incomes who
have difficulty affording other housing. In this way the Council will contribute to stable housing
outcomes for people who find it difficult to access other private rental housing. The Council will
provide supported rental housing for people on low incomes and who have limited assets.
Change we want to achieve
Council housing is provided to
tenants who have difficulty
accessing the private rental
market.
Council housing is affordable for
people on very low incomes.
Actions
Eligibility criteria, including an
asset test29 are confirmed and
implemented (for new tenants) by
December 2015.
Rents are set at no more than 30%
of the Jobseeker Support, or other
relevant benefit, for up to 20 units.
Council tenants are supported to Support services are provided to
participate in the community, to tenants.
access the health and social
services they need, and (where
appropriate) to overcome the
barriers they experience to
participating in the private rental
market.
All properties have been subject to The Otago Medical Schoolthe Otago Medical School- supported Warrant of Fitness
supported Warrant of Fitness Scheme is implemented.
Scheme.
Tenants understand the measures Tenants are provided with
that can improve the health and information and advice about how
to maximise the health of their
energy efficiency of their homes.
living environment.
What success looks like
People who have difficulty in
accessing the private rental market
are housed in accordance with the
Social Housing Strategy.
Tenants pay less than 30% of their
income on rent.
Tenants have access to the support
services they need.
Tenants report they are satisfied
with the level and type of support
available to them.
There is a mix of long term and
short term tenancies.
All properties are compliant with
the Warrant Fitness by June 2016.
Tenants live in warm, energy
efficient homes.
Driver 4: To make the most effective use of resources in supporting the provision of social
housing.
29
To be eligible for social housing tenants must have a Community Services Card OR be an international
student family from a developing country (confirmed by a tertiary institution), and have assets of less than
$40,000 (excluding a vehicle, household and personal effects and prepaid funeral arrangements). A panel will
be convened to assess applications and monitor the implementation of the Social Housing Strategy. Short-term
housing only will be provided for people who do not meet the social housing criteria but who are able to be
housed in cases of low demand by eligible tenants.
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
109
82
The Council has provided social housing for decades. Changes to recent central government policy
mean this has become a more challenging activity. While the Council is committed to seeing that
social housing goals are achieved, it also wishes to ensure that social housing is delivered in ways
that make the best use of resources and achieves the best outcomes for tenants.
Change we want to achieve
Social housing is delivered in the
most effective and appropriate
ways.
Actions
Delivery
mechanisms
are
investigated and publicly consulted
on and a recommended delivery
option is proposed in 2015/16.
The Council carries out a cost
saving review of the net operating
costs of social housing in 2015/16.
What success looks like
The Council agrees on a future
delivery model.
An implementation plan for any
change to social housing delivery is
agreed.
Council’s social housing is suitable
for all tenant groups identified in
the Strategy.
Driver 5: To support the increase in social housing in Palmerston North.
The Council supports the expansion of social housing in Palmerston North and will work in
partnership with other agencies to achieve this.
Change we want to achieve
Actions
There is more social housing in The Council facilitates and
Palmerston North.
contributes to the development of
new social housing initiatives in
Palmerston North.
The Council works with central
government,
non-profit
organisations and the private
sector to expand provision of social
housing.
The costs and benefits of
additional social housing are
considered alongside other funding
commitments when Council is
making decisions about future
funding.
What success looks like
More people in need are housed in
stable and supported social
housing.
The costs of the development of Council makes long term provision
further
social
housing
are for its commitment to social
considered by Council in the housing.
Annual Plan and Long Term Plan
processes.
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
110
83
6. Monitoring
Success of the implementation of the Strategy will be monitored through the Annual Report on
Strategy Progress. Each action (under section 5) has a description of ‘what success looks like’. The
following is a summary of the mechanisms which may be used to monitor this success in more detail:
1.
Review of compliance with the tenant eligibility criteria;
2.
Level of compliance with the Warrant of Fitness;
3.
Number of bedsits remaining (each year conversions completed);
4.
Review of tenants’ source of income (Drivers 1 and 2);
5.
Survey of tenants’ access to services and support;
6. Record of amount of social housing in Palmerston North (including as a per head measure for
the City);
7.
Annual budgets are consistent with strategy changes.
Social Housing Working Group Report October 2015 – Appendix Four Social Housing Strategy (2015)
111
Appendix Five: PNCC Social Housing Financial Information
Community Support - Housing
Operating Statement from 2015/25 10 Year Plan
This schedule reflects the current rating requirement for Housing as included in the 10 Year Plan 2015/25.
112
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
2022/23
2023/24
2024/25
Revenue
2,435,939
2,496,619
2,559,034
2,625,596
2,629,222
2,705,455
2,786,677
2,897,530
2,993,245
3,094,942
Expenses
Depreciation Operating
Interest Allocation
Maintenance
Insurance
Rates - external
Rates - internal
Other operating expenses
Total expenses
765,550
89,417
992,885
155,000
18,100
362,000
420,923
2,803,875
781,302
135,849
1,009,366
157,983
18,534
369,983
432,290
2,905,307
802,752
225,257
1,034,600
161,933
18,998
379,233
443,178
3,065,951
839,043
330,902
1,061,510
166,145
19,492
389,097
454,818
3,261,007
899,201
382,378
1,091,279
170,803
20,039
400,008
467,635
3,431,343
861,368
373,644
1,122,919
175,755
20,619
411,606
481,308
3,447,219
869,991
364,779
1,156,632
181,032
21,239
423,964
495,880
3,513,517
861,436
354,867
1,193,595
186,818
21,917
437,513
511,856
3,568,002
779,998
344,198
1,233,023
192,989
22,641
451,965
528,881
3,553,695
750,128
333,177
1,274,916
199,546
23,411
467,321
547,259
3,595,758
Operating surplus / (deficit)
(367,936)
(408,688)
(506,917)
(635,411)
(802,121)
(741,764)
(726,840)
(670,472)
(560,450)
(500,816)
765,550
651,135
23,851
781,302
633,011
25,783
802,752
745,097
43,261
839,043
732,266
65,602
899,201
729,183
91,184
861,368
833,353
97,112
869,991
1,406,907
103,426
861,436
1,806,363
110,147
779,998
1,458,219
117,307
750,128
1,641,547
124,932
(277,372)
(286,180)
(492,523)
(594,236)
(723,287)
(688)
987
(710)
925
(1,222)
734
(1,475)
505
(1,795)
241
Rating requirement
Add back depreciation
Capital renewal (annual)
Debt repayment
Rates requirement (cash requirement)
Deficit per unit:
- rates requirement
- operating cashflow
Note this includes all Social Housing, both subsidised and non-subsidised.
Social Housing Working Group Report October 2015 – Appendix Five Financial Information (2015)
(810,861) (1,367,182) (1,725,546) (1,355,978) (1,517,167)
(2,012)
297
(3,393)
355
(4,282)
474
(3,365)
545
(3,765)
619
Community Support - Housing
Cashflow Statement from 2015/25 10 Year Plan
This schedule reflects the current cashflow requirement for Social Housing as included in the 10 Year Plan
2015/25. The total as shown reflects the additional cash required for social housing to be self-funding each
year. Note the total of operations, net plus renewal capital plus debt repayment are rate funded each year with
the new capital debt funded.
From operations before interest
Interest Allocation
From operations, net
Capital outflow
New
Renewal
Debt repayment
Net cash inflow / (outflow)
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
2022/23
2023/24
2024/25
487,031
(89,417)
397,614
508,463
(135,849)
372,614
521,092
(225,257)
295,835
534,534
(330,902)
203,632
479,458
(382,378)
97,080
493,248
(373,644)
119,604
507,930
(364,779)
143,151
545,831
(354,867)
190,964
563,746
(344,198)
219,548
582,489
(333,177)
249,312
(250,000)
(651,135)
(1,364,992)
(633,011)
(1,686,707)
(745,097)
(1,841,499)
(732,266)
(729,183)
(833,353)
(1,406,907)
(1,806,363)
(1,458,219)
(1,641,547)
(23,851)
(25,783)
(43,261)
(65,602)
(91,184)
(97,112)
(103,426)
(110,147)
(117,307)
(124,932)
(527,372)
(1,651,172)
(2,179,230)
(2,435,735)
(723,287)
(810,861)
(1,367,182)
(1,725,546)
(1,355,978)
(1,517,167)
113
The following require consideration in conjunction with this.
Revenue and Financing Policy
As the main beneficiaries are those who use the service the cost should be bourne by the users having regard for the Council's rental policies based on tenant's income.
From time to time it may be necessary to subsidise from general rates.
Social Housing Strategy
For driver 1 and 2 rents are set at no more than 30% of net superannuation or net supported living payment.
For driver 3 rents are set at no more than 30% of the jobseeker support benefit, applicable for up to 20 units.
Above to appply only where qualify with all other properties to be let at market rates.
Alternative policies
1.
Currently actual social housing rent is set at 30% of net superannuation for the largest unit type with reduced rent for other types giving an average of 25%. If this was
to be increased to 30% for each type the additional rent revenue could be $126,000 pa. Rent for SLP is set at 30% with assumption one-third of houses are on SLP.
2.
The revenue and financing policy includes that the cost should be bourne by the users, prior to application of the income policy.
If this was applied to require rental revenue to provide no rates requirement on a cashflow basis over the ten years of the 10YP then rents would need to increase
for current social housing by 52% overall from current levels to approximately 38% of net superannuation.
Note the value of renewals may be higher than normal due to inclusion of bedsit conversions to one bedroom units.
3.
If rents were increased to market rents then annual rental revenue could increase by approximately $900,000.
Social Housing Working Group Report October 2015 – Appendix Five Financial Information (2015)
Status Quo
Option
Community Support - Housing
Illustrative effect of the rating requirements in year one for each
option and the illustrative financial result within each option.
Status Quo
Option 1
Cash in (out) or increase (decrease)
Trust Options
CCO Options
1: Establishment
2: Existing trust –
of a trust –
Council owns
Council owns
assets
assets
Other Entity Options
2: CCO
established
–most or all
assets gifted or
sold to CCO
1: CCO
established –
Council owns
assets
The following is illustrative of the effect on Council in year one if each option was applied. The actual impact will depend on arrangements and amounts.
Rates requirement (cash requirement budget 2015/16)
(277,372)
(402,403)
(402,403)
(402,403)
248,732
1.
Rate requirement for operating with status quo showing
the components of the current cost. Each of the options
show the effect of each component to determine the
ongoing rates requirement of Council, no Council subsidy:
- other operating costs requirement, excluding internal
rates, interest, debt, capital
- rates paid by option (internal for status quo)
- interest allocation (existing debt)
- renewal capital
- debt repayment
Other rating effects:
- interest allocation (existing debt)
- debt repayment
- rent charge
Compares to amount incurred by Social Housing in Council,
before consideration of any absorption required
elsewhere, eg allocations. Excludes any allowance for a
further subsidy to any operator. Nothing is allowed for any
rent charge as that is uncertain.
Exit Options
2: Establishment
3: CCO – housing 1: Establishment
3: Establishment
1: Establishment 2: Establishment 3: Existing trust – 4: Existing trust –
of Company
assets owned by of Company –
4: Establishment
of a trust- assets of a trust – assets assets sold to
assets gifted to
–housing assets of PPP – assets
CCO and land
assets gifted to
of Consortium
owned by Council
sold to trust
gifted to trust
trust
trust
leased by
leased
Company
Company
248,732
248,732
(402,403)
(402,403)
248,732
248,732
248,732
248,732
248,732
362,000
(89,417)
362,000
(89,417)
362,000
(89,417)
362,000
(89,417)
362,000
(89,417)
(23,851)
362,000
(89,417)
?
(23,851)
362,000
(89,417)
(23,851)
362,000
(89,417)
(651,135)
(23,851)
362,000
(89,417)
(23,851)
362,000
(89,417)
(651,135)
(23,851)
(23,851)
(23,851)
(23,851)
(23,851)
? May reduce if sold
? May reduce if sold
?
?
May reduce if sold
May reduce if sold
No impact
No impact
No impact
Against status quo rate requirement
effect
849,031
(362,000)
(89,417)
(651,135)
(23,851)
362,000
(89,417)
(651,135)
(23,851)
362,000
(89,417)
(651,135)
(23,851)
362,000
(89,417)
(651,135)
(23,851)
May reduce if sold May reduce if sold
May reduce if sold May reduce if sold
?
No impact
?
114
No impact
?
?
Reduction
Reduction
No impact
No impact
?
Reduction
Reduction
Reduction
Reduction
Reduction
Reduction
Reduction
Reduction
Reduction
Reduction
No impact
No impact
No impact
No impact
?
?
Reduction
Reduction
Reduction
Reduction
Reduction
Reduction
Reduction
Reduction
No impact
Reduction
Reduction
Reduction
No impact
No impact
?
Reduction
Reduction
Reduction
Reduction
No impact
No impact
?
?
No impact
No impact
No impact
?
?
No impact
?
No impact
No impact
No impact
Reduction
Reduction
Reduction
No impact
No impact
?
Reduction
Reduction
Reduction
Reduction
Illustrative financial result in each option in year one. The actual impact will depend on arrangements and amounts.
5.
Operating cash result
332,731
332,731
- other operating costs requirement, excluding internal
849,031
849,031
- rates paid by option (internal for status quo)
(416,300)
(416,300)
- interest allocation (existing debt)
- governance
(100,000)
(100,000)
- renewal capital
- debt repayment
-
332,731
849,031
(416,300)
(100,000)
-
(318,404)
849,031
(416,300)
(100,000)
(651,135)
-
(318,404)
849,031
(416,300)
(100,000)
(651,135)
-
(318,404)
849,031
(416,300)
(100,000)
(651,135)
-
332,731
849,031
(416,300)
(100,000)
-
332,731
849,031
(416,300)
(100,000)
-
(318,404)
849,031
(416,300)
(100,000)
(651,135)
-
(318,404)
849,031
(416,300)
(100,000)
(651,135)
-
(318,404)
849,031
(416,300)
(100,000)
(651,135)
-
(318,404)
849,031
(416,300)
(100,000)
(651,135)
-
(318,404)
849,031
(416,300)
(100,000)
(651,135)
-
2.
3.
4.
?
?
No impact
No impact
No impact
Reduction
651,135
250,000
No impact
No impact
No impact
No impact
No impact
No impact
250,000
No impact
No impact
Reduction in debt from sale
No impact
Equity
No impact
Council property, plant and equipment
From sale, transfer
Planned capital expenditure
- renewal
- new
Borrowing
Against planned borrowing required
Note interest effect in operating above
This excludes any benefit that may be achieved on operating efficiency, interest expense incurred on any loan where assets are purchased from Council and debt repayment.
Similarly rent payment to Council where Council retains ownership is not allowed.
6.
Total Council consolidated result
(431,672)
Effectively this is the current position weakened by governance and GST paid on rates but then improved as the rates are received.
(431,672)
(431,672)
These are illustrative of possible effects. For example any improvement in operating is dependent on the option being able to achieve improved performance. In the
absence of that the option may require a subsidy to fund any shortfall which will reduce the benefit. They are shown to enable consideration of the effect of each option.
Note for rates the amount excludes GST in PNCC with section 1 for each option being the net rates received by PNCC. In the other options GST will be an additonal cost and
therefore the cost will be 15% higher than that currently incurred and is included in section 5.
Social Housing Working Group Report October 2015 – Appendix Five Financial Information (2015)
Social Housing
As at September 2015
Rent Comparisons
Unit type
Superannuation:
- single
Net income
Rent at 30%
of benefit
Percentage Current Rent
Market rent
Market rent
percentage
of benefit
80% of
market rent
80% Market
rent
percentage
of benefit
90% of
market rent
90% Market
rent
percentage
of benefit
Bedsit
Small one bedroom
Large one bedroom
Large one bedroom
374.53
374.53
374.53
576.20
23.8%
25.1%
29.9%
25.0%
89
94
112
144
112.00
112.00
112.00
160.00
(market)
140.00
150.00
160.00
160.00
37.4%
40.1%
42.7%
27.8%
112.00
120.00
128.00
144.00
29.9%
32.0%
34.2%
25.0%
126.00
135.00
144.00
144.00
33.6%
36.0%
38.4%
25.0%
Supported living payment:
- single
Bedsit
Small one bedroom
Large one bedroom
262.64
262.64
262.64
30.0%
30.0%
30.0%
78.7
78.7
78.7
78.70
78.70
78.70
140.00
150.00
160.00
53.3%
57.1%
60.9%
112.00
120.00
128.00
42.6%
45.7%
48.7%
126.00
135.00
144.00
48.0%
51.4%
54.8%
- couple
Rent per year (estimated total)
Average per unit per year
1,481,995
4,812
115
Increase on current
Current tenants benefit source from:
- Superannuation
- Supported living payment
Units
181
118
1,608,823
5,223
2,401,880
7,798
1,931,488
6,271
2,165,124
7,030
126,828
919,885
449,493
683,129
Percent
58.77%
38.31%
Note
The actual overall increase is dependant on the proportion receiving SLP and the rent subsidy to be applied.
For example rent could be maximised if the policy was to house all those receiving SLP in bedsit units in line with the lower rent to be charged. Note they do
occupy a higher percentage of bedsit units now and there would be insufficient bedsit units to house all in bedsit units.
The column "Rent at 30% of benefit" utilises 30% for all unit types. This may not be acceptable as it has no allowance for the different types and sizes of units
and therefore may create demand for only the bigger units.
A comparison of some rents charged for social housing includes:
$ per week
Bedsit
Small one bedroom
Large one bedroom
PNCC social Palmerston
housing North market
89
94
112 or 144
(1 or 2
people)
140
150
160
Feilding
Hamilton
114 to 132
114 to 132
102
118.50 to
143.50
(1 or 2
people)
Social Housing Working Group Report October 2015 – Appendix Five Financial Information (2015)
Levin
New
Plymouth
130
135 to 145
150 to 170
91 to 113
120 to 154
128 to 163
Generally eligibility of a tenant for Accommodation
Supplement and application is for the tenant to
determine.
89
Appendix Six: Review of Other Council Housing
QUICK REVIEW OF OTHER
COUNCIL ACTIVITY
SOCIAL HOUSING REVIE W 2015
PR E P AR E D F O R V IC T O R I A B L O C KL EY - PO WEL L
P AL M ER ST O N N O R T H C IT Y C O U N C IL
JU L Y 2 0 1 5
VER S IO N : F IN AL
REVIEW SOCIAL HOUSING AND THE THIRD SECTOR
116
90
Background
You asked for a quick review of smaller councils and whether there are any alternatives
perspectives that might be useful for the PNCC Working Group’s considerations. We have:
x
Done a quick analysis of local government social housing stock to identify providers of
similar scale to Palmerston North
x
Researched the delivery and management of social housing stock of the twenty providers
most closely matching Palmerston North’s scale
x
Contacted a sample of these local authorities to gain a deeper understanding beyond the
available research
x
Highlighted other examples outside the ‘closest twenty’ to demonstrate breadth of
alternative approaches.
We have not conducted a comprehensive survey or study, though have drawn on in-depth
research conducted by others (for example, the Centre for Research, Evaluation and Social
Assessment studies). Instead, as per your instructions, we have aimed to provide a quick insight
into how others are approaching the social housing space and to get a feel for the range of
alternatives out there. When matched to our earlier ‘fly over’ paper provided on 18 May 2015, it
should give a strong picture of the different approaches in New Zealand.
Quick Review
PNCC is one of the larger social housing providers amongst local authorities. Based on the figures
in CRESA’s 2014 report Local Government Housing Stock Profile Prepared for Community Housing
Aotearoa, PNCC is the 5th largest local authority housing provider (see Table One).30 When we look
at this on a per population basis (using Census 2013 figures), Palmerston North is the 13 th highest
provider in terms of number of units for the size of population.
Local authorities are only one provider of social housing, with Housing New Zealand and
Community Housing Organisations also needing to be factored into calculations when determining
scale of provision. For example, Hamilton City only provides 344 social housing units itself, but has
more than 240 units provided by CHOs in its area. CHO provision in Palmerston North is quite low
– 51 units according to CRESA. So while PNCC provides more as a local authority, total provision is
higher in Hamilton (nearly 600 in Hamilton compared to just over 450 in Palmerston North).
PNCC’s in-house provision aligns with the majority of other local council management of social
housing. However, a number of other councils have adopted, or are in the process of adopting, a
range of other approaches to the provision of social housing.
30
Note that the CRESA study counts all council housing provision (not just subsidised provision), and has some
minor anomalies (for example listing PNCC as having 419 social housing units, and not factoring in that 411 of
Christchurch City Council’s 2,649 units are uninhabitable following the Canterbury Earthquakes (see here)). At
the time of the CRESA report, PNCC had 311 subsidised housing units, and 411 total units of housing.
QUICK OVERVIEW OTHER COUNCIL SOCIAL HOUSING PROVISION
117
91
Table One. Local Authorities with Housing Provision Above 100 Units31
Council
Units
Council
Units
Christchurch City
2,649
Whangarei District
165
Wellington City
2,332
Rotorua District
152
Auckland
1,412
Far North District
147
Dunedin City
954
New Plymouth District
142
Palmerston North City
411
Nelson City
142
Napier City
376
Gisborne District
132
Hamilton City
344
Waipa District
131
Wanganui District
293
Waimakariri District
126
Tauranga City
246
Grey District
125
Timaru District
245
Kapiti Coast District
118
Hastings District
220
Matamata-Piako District
118
Invercargill City
215
Ashburton District
118
Lower Hutt City
205
Horowhenua District
115
Marlborough District
177
Tasman District
101
Table Two. Largest 20 Local Authority Housing Providers on a ‘Residents per Unit’ basis 32
Council
Residents
Units
Residents per unit
Wellington City
197,019
2,332
84
Grey District
13,947
125
112
Christchurch City
350,889
2,649
132
Dunedin City
127,953
954
134
Wanganui District
42,402
293
145
Chatham Islands Territory
600
4
150
Napier City
58,830
376
156
Clutha District
17,361
98
177
Tararua District
16,632
92
181
Timaru District
44,547
245
182
Central Otago District
18,882
98
193
Rangitikei District
14,373
74
194
Palmerston North City
81,231
411
198
Westland District
11,136
55
202
Ruapehu District
13,620
66
206
Carterton District
8,241
38
217
Kawerau District
6,249
27
231
Invercargill City
52,314
215
243
Waitaki District
21,954
90
244
Wairoa District
7,905
32
247
31
If this analysis was done on the basis of just the 311 subsidised housing units provided by PNCC, the ranking
th
th
would shift from 5 to 7 .
32
nd
If the 311 subsidised housing units figure was used, PNCC would shift to 22 (a housing unit for every 261
residents).
QUICK OVERVIEW OTHER COUNCIL SOCIAL HOUSING PROVISION
118
92
Range of approaches
We have categorised the social housing approaches by local authorities into six main groups:
A. No provision, sell off to a community provider – e.g. Upper Hutt, Hamilton City (in process)
B. Support innovative trusts alongside small Council provision – e.g. Queenstown, Masterton
C. Set up CCO to act as developer & deliverer for Council (and others) – e.g. Lower Hutt,
Manawatu
D. Keep owning them, but have someone else manage them – e.g. Porirua, Whangarei,
Nelson
E. Manage in-house through single team (asset + tenancy) – e.g. New Plymouth (in
progress), Rotorua
F. Manage in-house with roles carried out by a range of teams – e.g. Napier, Far North
These can be represented on a spectrum:
CCO owns &
delivers
No Council
provision
Council
own,
delivery
outsourced
Council
manage
in-house
Below we comment quickly on each of the six main groups.
There are also subtle variations in eligibility criteria across the TLAs, meaning they end up
targeting different groups. This variation occurs in eligibility age (some make it over 65’s, others
allow 55+, some stagger it depending on financial or health need), income and asset limits, and
health and/or disability criteria. We have included eligibility criteria in the detailed notes table
below.
9. No provision, sell off to a community provider – e.g. Upper Hutt, Hamilton City (in
process)
Upper Hutt City Council sold their small holding of pensioner housing to a social housing provider
(Sisters of Compassion), who were able to integrate these as part of their larger aged care
accommodation portfolio (gaining benefits of scale that the Council were unable to achieve
themselves).
Hamilton City Council decided in late 2014 to sell its pensioner housing stock to social housing
providers. Providers have until July 2015 to register their interest to purchase the housing.
Hamilton already has a number of social housing providers who operate at a scale that makes this
feasible. In 2012 the Council sold three sets of units on the open market, with one set of units
being sold below the highest bid to a social housing provider (i.e. Council have supported the
growth of social housing provision in the past).
10. Support innovative trusts alongside small Council provision – e.g. Queenstown,
Masterton
Masterton District Council provides a small number of pensioner housing (74 units), with Masterton
Trust House providing significantly more. The Trust purchased a large number of Housing New
Zealand properties and has extended this provision to now cover over 500 residential properties in
the area.
Queenstown Lakes District Council focus is on affordable housing, with the lack of suitable
accommodation for key workers recognised as a significant barrier to regional economic
development. The Council owns and delivers a very small number of pensioner housing units in
QUICK OVERVIEW OTHER COUNCIL SOCIAL HOUSING PROVISION
119
93
Wanaka and Arrowtown. Affordable housing activities are supported through the Queenstown
Lakes Community Housing Trust.
11. Set up CCO to act as developer & deliverer for Council (and others) – e.g. Lower Hutt,
Manawatu
Both Lower Hutt City Council and Manawatu District Council have established council controlled
organisations to undertake their social housing provision. Both the ownership and management of
the provision have been transferred.
UrbanPlus (Lower Hutt’s CCO) is also tasked with asset and facilities management for other Council
assets (but not ownership). It also carries out these functions for private customers, as well as
tenancy and development activities. The CCO has recently encountered financial difficulties due to
the downturn in Wellington’s property market, making it difficult to cover the cost of its
establishment loans with the planned developments.
The Manawatu Community Trust (MCT) has over several years renovated nearly all of the units
transferred to it. It has been able to establish a sustainable financial basis to the point where it has
been able to invest in other community assets (the Feilding Integrated Healthcare Facility).
Rangitikei District Council has recently mooted MCT owning and/or managing its pensioner housing
assets, enabling it to access service benefits that come with the scale that MCT has.
12. Keep owning them, but have someone else manage them – e.g. Porirua, Whangarei,
Nelson
Porirua City Council has a small number of social housing assets (less than 30), making in-house
delivery of these services unviable. The Council retains ownership but contracting out management
(asset and tenancy) to City Housing, a division of Wellington City Council, in 2013.
Whangarei District Council has a larger number of units (165), but has taken a similar approach to
Porirua. It contracts out tenancy and asset management of its units to the Northland Masonic
Trust, who already holds a large number of pensioner units. Scale benefits are able to be achieved
by being part of a larger portfolio, and outcome alignment is achieved through the contracted
party being a community housing provider.
Nelson has a further variation on this theme, contracting out the asset and tenancy management
of its pensioner housing to Opus International Consultants. All inquiries for housing and
subsequent matters are managed by Opus.
13. Manage in-house through single team (asset + tenancy) – e.g. New Plymouth (inprogress), Rotorua
Both the New Plymouth and Rotorua District Councils have recently undertaken reviews of the
management of their social housing portfolios and decided to stick to in-house provision. In
Rotorua this has always been managed by a single team (as part of the property services group).
New Plymouth’s provision had been split across the community and property group, but following
the review they are looking to implement a shift to provision through a single in-house team.
14. Manage in-house with roles carried out by a range of teams – e.g. Napier, Far North
District Council
A number of Councils split the delivery across two internal teams. In the case of Napier and the
Far North District Council the teams involved are community services (who handle the tenancy
management aspects) and the property services teams (who manage the asset and related
property services). A range of associated services can also be contracted out (grounds
maintenance, specialist repairs etc.).
QUICK OVERVIEW OTHER COUNCIL SOCIAL HOUSING PROVISION
120
94
Table Three. Detailed Notes on Local Authorities Covered in Overview
TLA
Who? What?
Comments
Tauranga
Tony Arlidge, Property
Coordinator, 07 577
7000
Self-funded, Council owns and delivers services, managed as one unit through Community
Property Services group. LTP notes that will undertake a strategic review of its Elder Housing
activities in 2015/16 and will report back on options. Drivers for review are increased demand
from growing population, and small size and age of units meaning many are no longer fit for
purpose. Looking at a $4.3m renewal programme over next ten years.
Website, LTP
Elder Housing activity kept separate from Community Development activity in LTP, despite the
latter encompassing Ageing Strategy and Disability Strategy.
Eligibility Criteria
To be eligible for a pensioner unit, prospective tenants must meet the following criteria:
x
x
x
121
Whangarei
Council
District
Holly Taylor, Housing
Officer,
Northland
District Masonic Trust
09 438 3109
Website
Be a New Zealand Resident;
Aged 65 or over
Have income and assets that do not exceed $20,000 for single people and $25,000 for
a couple.
x
Are in receipt of a superannuation benefit paid by the New Zealand Government
(applicants may work part time earning $90 per week).
x
Fully complete the tenant application form
x
Be able to demonstrate they can live independently; and
x
Provide evidence that they have a good tenant history (if a previous tenant) or provide
appropriate written references.
All applicants may be required to have an interview by Elder Housing Committee and may
x
undergo a credit check.
Masonic Trust are contracted to administer all aspects of Whangarei District Council’s social
housing.
They operate it alongside their own five villages for independent living, so are able to gain scale in
delivery of tenancy and property management this way.
Capital additions and alterations are paid for by the Council but managed in collaboration between
the two parties.
Provision focussed totally on over 65s. Trust does not provide much in the way of wraparound
services at this stage, more about pointing tenants in the right direction.
Eligibility Criteria
Those eligible for Council's pensioner housing must be:
x
over 65
Social Housing Working Group Report October 2015 – Appendix Six Review of Other Council Housing
95
Hastings
Council
District
Jacqui Davis, Housing
Manager,
Hastings
District Council
06 871 5000
Website, LTP, reports
x
receive the New Zealand National Superannuation
x
have cash assets of no more than $17,500 for a single person, or $20,500 for a couple.
Recently increased rents to ensure keep self-funded. No increases for last five years meant they
were not covering the cost of upgrades as they were needed, instead having depleted $300k of
financial reserves over that time. Rents are about 30% below market rate, about the same as
Napier’s social housing. No significant shifts in approach are planned or being forecast, LTP pretty
much silent on senior housing. Tenancies managed through Community Facilities and
Programmes, maintained by Asset Management group.
Eligibility Criteria:
To qualify for housing, the applicant/s must:
x
x
122
New
Plymouth
District Council
Craig
CampbellSmart,
Manager
Community
Development
06 759 6060
Website
Be a New Zealand citizen or have New Zealand permanent residency.
Be 55 years of age or over (both members of a couple must qualify). However priority will
be given to people over the age of 60.
x
Have an annual income of not more than $29,500 gross for a single person and $45,000
gross per year for a couple.
x
Demonstrate the ability to live independently or be receiving sufficient support.
x
Have assets valued at less than $40,000 (single applicant) or $45,000 (couple). Assets
exclude furniture, motor car and personal effects.
x
Have a good tenancy history and be of good character verified by two referees.
Currently all in house but split between property who manage the asset and community
development who manage the asset. Looking to bring under one unit in house.
2014 review considered various options, including selling to private market, setting up Trust CCO,
or selling to social housing provider. Review was abandoned so sticking with the status quo with
single in house team in mind.
Have shifted to cost recovery model recently, whereas previously the housing was subsidised by
rates. Demographic shifts mean they will need to grow over the long term but have not yet made
these decisions.
Eligibility:
x
x
x
Aged 65 years or older.
Who receive a pension, benefit or are on a low income.
Who have no significant assets.
Applications from those nearing 65 years of age will be considered on a case by case basis for a
place on the waiting list.
Upper
Council
Hutt
City
Judy
Dixon,
St
Joseph's Social Justice
Council sold their pensioner housing to local arm of Sisters of Compassion. Sisters already ran
several retirement complexes in Upper Hutt so was a good fit. Community knew Sisters weren’t
just going to sell up or develop but would continue provision. Shift also meant able to access
Social Housing Working Group Report October 2015 – Appendix Six Review of Other Council Housing
96
Rotorua
Council
District
Group, Website
income related rents for some tenants.
Eric Tonkin, Housing
and Property Manager
When new Council came in two years ago they looked at their options, but stayed with in-house
management and delivery. Issue has not come up again but probably will once elections occur
again. Did not consider total sell-off, more about having someone else administer but Council still
own.
07 348 4199
Website
Always been managed in one team at Council (tenancies, property, maintenance etc.). Have policy
of self-funding, though depreciation is not counted in this. Make a small profit.
In early 2000’s they received central Government funding to renew about half of their housing,
but then the policy changed and they have not been able to complete the other half. They are now
left with quite urgent need to refurb or renew but Council does not have the funds to do so.
Eligibility criteria:
To be eligible for consideration for a unit you must
123
x
x
x
x
x
x
x
x
x
Napier
Council
District
Leigh Clark, Housing
Officer, 06 835 7579
Website
Be a New Zealand citizen or hold New Zealand Permanent Residency
Be 60 years of age or older and reliant on a benefit , or
Be 55 years and over and reliant on a sickness benefit
Be retired from full time work
Have assets of less than $25,000 for a single applicant and $45,000 for a couple—this
includes the value of any major
asset sold within 5 years of applying
Have an income of less than $25,000 for a single applicant and $45,000 for a couple.
Be in need of long-term accommodation
Capable of living independently.
Have retirement flats and rental flats available. All managed in-house between community team
and assets team. Currently reviewing housing provision with recognised need to grow, but
amalgamation discussions mean unlikely to decide way forward until those bigger questions are
answered. Have a couple of other social housing agencies in the area – Manchester Unity and
Salvation Army – but neither have scale or desire to operate the number of units that Council has
(370+ in total). Utilise village coordinators (tenants who are paid for their work) that help connect
residents to other services and act as general welfare support – role involves visiting everyone in
the village at least once every two weeks.
Eligibility criteria:
Retirement Flats are available for people who meet Council's criteria, based on housing needs and
income. Some of the criteria is as follows:
x
Applicants must have a Housing Need
Social Housing Working Group Report October 2015 – Appendix Six Review of Other Council Housing
97
x
x
x
x
x
x
x
Applicants must have a Low Income
Applicants must have Low Assets
Applicants must be 60 years and over
Applicants are required to be New Zealand residents
Applicants must have proof of ability to pay rent
Application forms must be completed and a statutory declaration signed in front of the
Justice of Peace or Deputy Registrar of the District Court or another officer authorized to
take declarations.
All applicants must attend an interview before being allocated a property.
Rental Flats are available for people who meet Council's criteria, based on housing needs and
income. Some of the criteria is as follows:
124
x
x
x
x
x
x
x
Grey District Council
Website
Applicants must have a Housing Need
Applicants must have a Low Income
Applicants must have Low Assets
Applicants are required to be New Zealand residents
Applicants must have proof of ability to pay rent
Application forms must be completed and a statutory declaration signed in front of the
Justice of Peace or Deputy Registrar of the District Court or another officer authorized to
take declarations.
All applicants must attend an interview before being allocated a property.
Managed in-house. Rentals are still below private market rates and are sufficient to meet the cost
of maintaining stock and debt servicing requirements without the need to seek top up funding
from general rates. The rental housing contributes $20,000 to Council in lieu of rates and
administration costs. No provision for depreciation is provided for in the current rent levels. Grey
District Council’s Housing Policy allows for ownership to rest with either the Council or another
“appropriate elderly persons social service provider on condition that similar terms and conditions
are available to tenants.”
Eligibility criteria:
1. The primary focus will be to provide housing for older people, i.e. 60 years of age and
older.
2. The secondary focus will be to accept tenants between the ages of 50 and 60 years with
preference in this group being extended to those people who are government incometested and/or who have special needs.
3. Generally persons under the age of 50 will not be considered as tenants unless there is a
case for "special needs" as per 2) above.
4. To be eligible for consideration, applicants must not have more than $150,000 in property,
in the bank or in investments. The equity in family trusts will be taken into consideration
Social Housing Working Group Report October 2015 – Appendix Six Review of Other Council Housing
98
when assessing eligibility.
Note 1: The rationale for 3) above is that the disparity in ages may not be compatible to a
harmonious village environment where the majority of the residents will be within similar age
brackets, i.e. 60 years+.
Note 2: Should an urgent need arise and the applicant does not meet the eligibility criteria above,
then applicants may be screened by a committee of Council/elected representative/s with advice
from a senior staff member. Applicants may be required to attend an interview with the
committee.
Waimakariri
Council
District
Website, LTP, media
reports
Housing portfolio managed in-house by the Council Property Unit, who look after 112 pensioner
units and 7 affordable rental houses.
In 2009 the Council, in conjunction with the Canterbury Community Trust, erected seven new
three-bedroom houses in the Oxford Estate subdivision in Rangiora. These houses provide a
helping hand to young families saving for their own home ownership, being available to rent for a
maximum term of five years and not intended for long term accommodation.
Applications for renting the houses are assessed according to the following criteria, and preference
is given to those tenants who meet all of the criteria.
125
x
x
x
x
x
Waipa
Council
District
Jeanette
Tyrrell
(comms on behalf of
Council) 027 5077
599
Website
reports.
and
media
Families with school-age or pre-school children (maximum of six permanent occupants per
house).
With one member of the household employed in the Waimakariri District.
Combined family income of between $25,000 and $45,000 (as evidenced in last tax
return) at commencement of tenancy.
Can own cars and other vehicles up to a maximum value of $30,000 at commencement of
tenancy.
Can have assets, excluding household chattels, of up to $20,000 at commencement of
tenancy.
Managed and administered in-house by Council Property Services Department. Council staff
provide more than just a tenancy service, connecting tenants to other providers for wider welfare
needs.
Recently completed a pensioner housing policy review, which was progressed swiftly due to
Hamilton City Council conducting a review at the same time. Waipa District clearly stated at the
start of their review that they were committed to maintaining pensioner housing in Council, and
that the policy review was primarily focused on increasing rents (allowing for future
redevelopments to be funded). Eligibility criteria were also changed, including lifting the age of
eligibility up from 60 to 65.
Waipa District Council also provides 6 units of ‘Own Your Own’ pensioner housing. Originally these
were created through Council land being made available to build privately-owned pensioner
Social Housing Working Group Report October 2015 – Appendix Six Review of Other Council Housing
99
houses (6 units built within Council pensioner housing sites). The Council owns the land and
charges an annual ground rent to the occupier. The building structure is owned by the occupiers
and all internal maintenance including redecorating is at the expense of the resident. Council has
stated it is interested in purchasing the units when the leases come due, and combine this with a
look at future retirement village options.
Gisborne
Council
District
Website, LTP, Annual
Plan.
Managed in-house. Eligibility age of 55 and must have Community Services or SuperGold card
(i.e. use this as proxy for financial need). Does not provide social welfare services for its tenants
but works with other agencies to ensure that these services are known about and readily
accessible for tenants that may need them.
10 Year Plan states review of ownership structure to occur before end of 2015/2016, which may
result in “the transfer of management or ownership to a Trust, CCO, third party or similar.”
Currently not cost neutral (currently making loss of $157,000, projected to increase to $222,000
by 2022) and significant improvements needed to asset management (not yet covering
maintenance checks and scheduled replacements, $2m of renewal & renovation over next 10
years). Rents set at 90% of lower quartile market rate.
Nelson City Council
Website, reports
Council contracts Opus International to manage the community housing portfolio – both asset and
tenancy management.
126
Strong focus on affordable housing in Nelson. Council helped establish the Trust, which as well as
providing affordable housing also coordinates emergency housing and a bond bank on behalf of 10
agencies in the Nelson region. The Trust owns 32 units, rent for approximately 75-80% of market
rental, and are offered to low-mid income households with secure tenancies.
Eligibility criteria for Council community rental housing (not Trust ones):
Provide housing for older persons with limited financial means.
x Assets not exceeding $40,000 for a couple; or
x Assets not exceeding $25,000 for a single person
x First priority is given to persons who receive Superannuation (65 plus); and second
priority is beneficiaries 55 years plus.
Rent currently set at 25% of national superannuation, reviewed on 1 July each year.
Far North
Council
District
Website, Long
Plan, policy.
Term
The day to day operations and maintenance of the Housing for the Elderly is undertaken in-house
by the Tenancy Officer with in the Customer Services Department, and the Team Leader- District
Facilities – Infrastructure and Asset Management (who undertakes general maintenance specialist maintenance, such as electrical or plumbing work is contracted out). Grounds care is
contracted out to Green Acres and is reviewed annually.
Council policy requires self-funding. Rents not tagged to a particular benchmark (e.g. 25% below
super), and while all are below market rents there is considerable variation (Kaikohe bedsit $5
Social Housing Working Group Report October 2015 – Appendix Six Review of Other Council Housing
100
lower than market rent, Kerikeri one bedroom almost half market rent).
No growth plans. Long term plans notes that “As Treaty Settlements are finalised, there may be
an opportunity to work with Iwi to explore options for divestment of the Housing for the Elderly
activity. This may offer a more sustainable future for the housing stock, while also safeguarding
the interests of residents.”
Marlborough District
Council
Website,
reports,
Long
Term
Plan,
Annual Plan
APL Property Blenheim manages the Marlborough District Council Housing for the Elderly, with
only grounds care separately contracted out (and any significant/major maintenance). Rents
increase by the lower of CPI or Superannuation increase – e.g. to December 2014 CPI was 0.8%
and Superannuation increase was 2.07%, so 0.8% increase was recommended. Portfolio not selffunded (though expected to be), costing taxpayers $363,000 in 2013/14 and expected to cost
$202,000 in 2015/16. Expansion plan currently being developed by Council officials for
consideration later in the year.
Council works closely with Marlborough Sustainable Housing Trust whose primary activity is
affordable housing through shared ownership models (between 50% and 80%).
Lower
Council
Hutt
127
Invercargill
Council
City
See earlier TBL report
(May
2015)
re
UrbanPlus.
City
Website,
Plan.
Long
Term
Managed in-house by Housing Care Services. Self-funding, generating approximately $300,000
annual surplus. Long term plan notes that ratepayer funding may be needed to maintain level of
service at current level as units aged (most built in 1980s) and require significant maintenance or
redevelopment.
Councillors have been exploring partnerships with third parties to increase the number of
community houses in Invercargill (not necessarily Council housing), including a mooted
collaboration between the Invercargill Licensing Trust, Community Trust of Southland and
Invercargill City Council.
Invercargill has been chosen as one of the first regions to be part of the Housing New Zealand
transfer scheme. Invercargill has two registered community housing providers, Habitat for
Humanity (16 properties) and Accessible Properties, and five as-yet unregistered community
housing providers.
Timaru
Council
District
LTP,
Annual
Plan,
Website, reports
Asset and tenancy management conducted in-house. No dedicated unit (for example,
Environmental Health Officer receives applications and assesses, property unit manages asset).
More social housing than pensioner housing, as residents below 55yrs are allowed (though
preference given to those 55 and over).
Self-sustaining, no draw from rates. Most units self-insured (indemnity coverage only), so
significant event would likely mean non-replacement (or significant impact on borrowing). Are
currently completing a refurbishment project (bathrooms, insulation etc.), which has had to be
Social Housing Working Group Report October 2015 – Appendix Six Review of Other Council Housing
101
funded via internal loan and subsidy (so self-sustaining statement relates primarily to operations
rather than totally covering capital).
Eligibility criteria:
x
x
x
x
x
128
x
x
Wanganui
Council
District
Website, Long
Plan, reports.
Term
Receive a national superannuation, war, widows, 55 plus, invalids for sickness (long-term)
benefit.
Applicants on limited income may be considered – application judged on individual basis –
accommodation offered on temporary basis only, that is if a more suitable applicant (i.e.
elderly person), wishes to be placed in the unit that the young tenant is in, then the young
tenant will be given 42 days notice to leave. This clause is included in the young person's
Tenancy Agreement.
Have a housing need (in that the applicant's current accommodation is unsuitable for
various reasons, which the applicant may list in the application form).
If an applicant owns property and decides to accept a Council unit, the property must be
sold or placed on the market for sale within 1 month of accepting the unit, and Council
advised of the listing. The applicant may not collect rent from a property once they have
become our tenant.
An application must include a doctor's letter recommending the applicant for a Council
unit, stating that the applicant is capable of caring for themselves and listing any physical
or mental disabilities which may make some of our units unsuitable.
If an applicant has a prior criminal record, this must be divulged at time of application with
appropriate details.
An application must also include a letter of reference from the applicant's current landlord
if applicable, or if requested.
Wanganui District Council’s Long Term Plan has noted the need to consider other ownership and
management options for its pensioner housing. Maintenance and renewal demands mean current
provision will no longer be self-funding in the near future. At the LTP considerations in May 2015,
Council agreed to commit “to ensuring the Pensioner Housing Activity does not require ratepayer
funding” and that “Council engages with a community working group to review the best use of the
portfolio and/or the proceeds of the sale or partial sale thereof.”
Four options put forward in LTP:
x
x
x
x
Sell between a third and a half of units to a social housing provider, using proceeds to
repay debt and for capital improvements to remaining housing units.
Sell all or nearly all of units to a social housing provider, using proceeds to repay housing
debt and then general Council debt.
Sell all or nearly all on the open market. New owners may not retain housing as social
housing.
Fund pensioner housing deficits from borrowing ($2.7m over next 10years).
Social Housing Working Group Report October 2015 – Appendix Six Review of Other Council Housing
102
Also have 22 relocatable ‘granny flats’ available for use. People can rent these, have them shifted
onto their property, and then return them once the need no longer exists.
Eligibility criteria:
The units and flats are available to those who can demonstrate limited financial resources, are
over 55 years if and can live independently. The rentals are set to cover costs and are
approximately 27% of the Government benefit for the elderly.
Hamilton
Council
City
Website,
reports,
Long
Term
plan,
media reports
Currently in process of exiting housing provision. Hamilton City Council has decided to sell its
pensioner housing portfolio to social housing providers. Providers have six months from February
2015 to express interest in purchasing the portfolio. Conditions of sale will be that existing tenants
are able to stay for as long as they wish and that the properties remain as social housing for a
minimum of 10 years.
The council is pursuing the sale due to social housing providers being seen as being in a better
position to offer wider, wrap-around social services, and also that providers are able to access
increased government funding (Income Related Rents primarily) that Council is not eligible for.
Funds raised will be used to retire Council debt.
129
In 2012 the Council sold three pensioner housing blocks for $3.7 million. Two of the blocks were
sold to the highest bidder, and the third sold to social housing providers The Crosslight Trust and
Habitat for Humanity for $165,000 less than the highest offer.
Social Housing Working Group Report October 2015 – Appendix Six Review of Other Council Housing
103
Appendix Seven: Legal Advice on Transfer of Assets
Social Housing Working Group Report October 2015 – Appendix Seven Legal Advice on Transfer of
Assets
130
104
Social Housing Working Group Report October 2015 – Appendix Seven Legal Advice on Transfer of
Assets
131
PALMERSTON NORTH CITY COUNCIL
REPORT TO
Community Development Committee
DATE OF MEETING
9 November 2015
REPORT TITLE
NATURAL BURIAL CEMETERY SITE SELECTION
DATE OF REPORT
29 October 2015
REPORT AUTHOR/S
Brian Way and John Brenkley
TITLE
Leisure Assets Officer and Parks & Property Manager
UNIT
CITY NETWORKS
RECOMMENDATION(S) TO COMMITTEE
1. That Council receive the MWH Natural Burial Site Suitability – Assessment Report
dated June 2015 addressing the geotechnical issues for a natural burial cemetery
at the sites of :•
River Road, Ashhurst, adjacent to McCraes Bush
•
The land block to the north of Kelvin Grove Cemetery
2. That Council note the River Road Ashhurst site, adjacent to McCraes Bush has
been assessed on the basis of geotechnical considerations as the preferred site
for a natural burial site on Council owned land.
3. That Council having regard to the geotechnical assessments, site attributes, risks,
zoning, community views and financial implications; consider selection of a
natural burial cemetery from the following site options listed in Officer priority
order.
1
McCraes Bush, River Road, Ashhurst
2
Purchase a new site
3
Kelvin Grove Cemetery
132
PALMERSTON NORTH CITY COUNCIL
SUMMARY OF OPTIONS ANALYSIS FOR ESTABLISHING A NATURAL BURIAL CEMETERY
Problem or
Opportunity
The public have submitted to Council for a number of years in support of establishing a natural burial cemetery in Palmerston North.
Council approved funding for establishing a natural burial cemetery in the 2012-22 LTP.
Officers have investigated a number of Council owned sites where a natural burial cemetery could be established. All sites had potential
advantages and drawbacks in terms of geography and neighbours’ opposition.
Independent geotechnical advice has been provided on two shortlisted sites – adjacent to McCraes Bush, Ashhurst and at Kelvin Grove
Cemetery. (See attached MWH report, Appendix 2)
1
Options (Recommended
option is shaded)
McCraes Bush, River Road,
Ashhurst.
133
Community Views
Benefits
Risks
Financial
River Road residents
have raised objections
and made a deputation
to Council opposing the
site.
No current objection
from wider Ashhurst
community
organisations eg.
RECAP.
Council owned land.
Meets all parameters of the UK
Environment Guide for Green
Burials.
Silt
soils
provide
ideal
decomposition environment.
Currently leased for grazing.
Adjacent
to
existing
bush
remnant. Over time the size of
this bush vegetation coverage
will increase.
Quiet and peaceful location on a
no exit road.
Five dwellings on the road
beyond the proposed site.
Surrounded by Rural zoned land.
Proposed
site
is
zoned
Conservation and Amenity.
Within the outer reaches of the
Horizons flood zone, but around
4.5m above the Pohangina River
so flooding likely to be rare.
Residents’ concerns over
bore water contamination.
Flooding. Horizons
modelling shows in a
1:200 year flood
approximately two thirds
of site would be covered
with up to 0.5m water.
Horizons modelling shows
flood water velocities up
to 0.355 m/sec in a 100
year flood and up to .0.56
m/sec in a 200 year flood.
Refer
MWH
Report
Appendix 2 for proposed
mitigation measures.
Remote
from
main
cemetery
operations
depot (but no further than
existing
Ashhurst
cemetery).
Designation costs.
Perimeter drainage.
Parking.
Site establishment
(fencing, pathways
etc.).
Mitigation planting.
PALMERSTON NORTH CITY COUNCIL
2
Options (Recommended
option is shaded)
Purchase a new site
3
Kelvin Grove Cemetery
134
Contribution of Recommended
Option to Council’s Strategic
Direction
Community Views
Benefits
Risks
Financial
At
this
stage
no
possible sites have
been investigated.
Potential to find a site that will be
suitable
for
natural
burial
purposes.
Unable to find a site with
suitable soils that is
acceptable to the local
community and not too
remote.
Time delay in establishing
a natural burial cemetery
in Palmerston North
Site investigation costs.
Land purchase costs.
Designation costs.
Access pathways.
Site establishment and
planting.
Adjacent to existing cemetery
site.
Close to main urban area.
No flood risk.
Surrounded by Rural zoned land.
Proposed site is zoned Rural.
Heavy
clay
soils,
waterlogged
for
long
periods. Inhibits natural
decomposition.
Costs of site mitigation
measures.
Requirement to import
backfill
for
individual
graves.
Designation costs.
Intensive burial area
drainage required.
Access pathways.
Site establishment.
Providing a natural burial cemetery reflects a caring community where end of life options are provided.
A natural burial cemetery supports Council’s Biodiversity Strategy by increasing the area of native bush.
PALMERSTON NORTH CITY COUNCIL
RATIONALE FOR THE RECOMMENDATIONS
1.
2.
3.
OVERVIEW OF THE PROBLEM OR OPPORTUNITY
1.1
Annual Plan and LTP submissions, and delegations to Council over the last 5
years, have resulted in Council decision to provide a Natural Burial option to
the people of Palmerston North.
1.2
Natural Burial is increasingly being offered as a burial option by other
Councils e.g. Wellington, Kapiti Coast, New Plymouth, Tasman and Dunedin.
Several others are in the same process as Palmerston North. In Wellington
the number of natural burials is currently at 12% of total casket burials over
the last 3 years.
1.3
Officers have consulted widely and investigated several Council-owned sites.
A short list of two sites were selected for further investigation –
- Kelvin Grove Cemetery and
- Land adjacent to McCraes Bush on River Road, Ashhurst.
1.4
A detailed study of the two sites was commissioned from MWH geotechnical
engineers. Both sites would be feasible and each has its own advantages and
disadvantages. See Appendix 2 for a copy of the full report.
1.5
This report recommends the McCraes Bush site as the preferred technical
option but acknowledges there is local community opposition to the proposal.
BACKGROUND AND PREVIOUS COUNCIL DECISIONS
2.1
Council approved funding for establishment of a Natural Cemetery in years 1
and 2 of the 2012-22 LTP.
2.2
A workshop was held with Councillors in August 2012 seeking guidance on
site preference and the long term look and feel of a natural burial cemetery.
At the time Councillors were in favour of Kelvin Grove Cemetery and Akers
Road Linton as preferred sites. Ashhurst locations were ranked in third place
out of five options. The preferred long term management of the natural burial
cemetery was slightly inclined towards parkland over native bush.
2.3
2012/13 funding was carried forward to 13/14, and again to 14/15 while site
investigations continued.
2.4
As part of the 2015-25 10 Year Plan the above funding was carried forward
into 2015/16 and further funding was allocated in years 2 and 3.
DESCRIPTION OF OPTIONS
3.1
A number of site options have been considered. All sites still require
designation as a cemetery.
135
PALMERSTON NORTH CITY COUNCIL
3.2
Kelvin Grove Cemetery
This site would be co-located with the PNCC conventional cemetery. A
natural burial cemetery here is likely to be established on the recently
purchased block to the north of the existing cemetery which is currently
leased for grazing in exchange for removal of the tree stumps within 10 years.
There are significant geotechnical issues to resolve at this site - heavy soil
types and high winter water table. Evidence of waterlogging in the soil is
apparent from the soil surface down which provides for poor decomposition
conditions.
3.3
McCraes Bush site, River Rd Ashhurst.
This site is located across a stream adjacent to McCraes Bush. The parcel of
land is currently leased for grazing. See Appendix 1 for descriptive
photographs.
The silt soils at this site provide ideal conditions for organic decay of the body
as well as an opportunity to enhance and expand an Ashhurst bush remnant.
3.4
Other sites considered
Other sites were investigated at Ashhurst Domain; Akers Road in Linton and
Bunnythorpe Recreation Ground on Tutaki Rd. These have been discounted
due to former Rangitaane village (Ashhurst) and heavy soil types at the other
two sites.
3.5
Purchase a new, suitable property
Suitable sites within the PNCC boundary are most likely to be found on the
river flats where well drained silt soils are found.
Based on natural burial rates in Wellington it is estimated that up to 20 natural
burials will be requested per year in Palmerston North (13% of current annual
burial rate). Allowing for 5.4m2 per plot, an area of 5400m2 would allow for
enough land to provide natural burials for 50 years.
136
PALMERSTON NORTH CITY COUNCIL
Site
Site Attributes
McCraes Bush
Meets all parameters of
the UK Environment Guide
for Green Burials.
Silt soils.
Adjacent to existing bush
remnant.
Over
time
expands the size of this
biodiversity remnant.
Quiet and peaceful
location on no exit road.
Five dwellings on the road
beyond the proposed site.
Kelvin Grove
Other site
Meets all
Depends on site
parameters of the
UK Environment
Guide for Green
Burials.
Adjacent to existing
cemetery site.
Close to main
urban area.
No flood risk
Risks
Residents’ concerns over
bore water contamination.
Flooding (however it has
been shown that the risk is
minimal and mitigations
measures are proposed.)
Remote from main
cemetery operations depot
(but no further than
existing Ashhurst
cemetery)
Heavy clay soils
Depends on site
waterlogged for
long periods
inhibits natural
decomposition.
Costs of site
mitigation
measures.
Requirement to
import backfill for
individual graves.
Zoning
Community
views
Zoned Conservation and
Amenity
Surrounding land Rural
Significant opposition from
River Road residents
Financial
implications
Minimal, some mitigation
measures required.
Zoned Rural
Depends on site
Surrounding land
Rural
Untested but
Depends on site
adjacent to existing
designated
cemetery land
Drainage of site for Unknown
150 burials estimated cost
$78,000.
Additional cost per
grave of $1,000 for
soil backfill material
137
PALMERSTON NORTH CITY COUNCIL
4.
ANALYSIS OF OPTIONS
4.1
All sites will require a designation
4.2
Kelvin Grove Cemetery
A preferred site for many groups and was ranked highly by Councillors in the
August 2012 workshop because of the connection to an existing cemetery.
Whilst co-location with a conventional cemetery has benefits, some people
may prefer a more natural location.
There are significant geotechnical issues to resolve at this site - heavy soil
types and high winter water table provide for poor decomposition conditions.
Evidence of waterlogging in the soil is apparent from the soil surface down.
Backfilling a hole with ponded water using lighter soils does not make the
water go away. Sub surface drainage is required.
An initial MWH report (Appendix 2) suggested that with drainage and soil
remediation, the site could be made to work. Further investigation was
requested for this site. These findings included more detail on the drainage
works required and soil remediation for each grave.
•
Subsoil drainage of 7000m2 site = $75,000 (estimated life 50 years)
•
Additional cost per grave to replace clay with topsoil/compost mix =
$1,000 (on top of regular plot and interment costs of $2,600).
This option does not truly comply with the natural burial philosophy given
that the site needs to be modified at significant cost in order for natural
burial processes to be able to occur.
4.3
McCraes Bush, River Road, Ashhurst.
The soils of this site provide ideal conditions for rapid aerobic decay of the
body. A natural burial cemetery here also provides an opportunity to enhance
and expand an Ashhurst bush remnant.
Some neighbours have raised objections based on:
- risks to ground water utilised for stock and emergency domestic supply
- proximity to a stream and high water table
- flooding potential
A report commissioned from MWH (Appendix 2) addresses these issues
including mitigation measures and other matters.
Bore Contamination: Separation distances meet best practice and relevant
guidelines. Verification of ground water flow direction is recommended.
Flooding: Provided the burial sites are revegetated after burial, erosion risks
are minimal.
Boundary treatments: Drainage and planting on the boundary would minimise
ground water flows.
138
PALMERSTON NORTH CITY COUNCIL
4.4
Other sites considered
Other Council owned sites were investigated following the preferences
indicated by Councillors at the August 2012 workshop for Linton and
Ashhurst. As Council officers became more familiar with the requirements for
natural burial sites the following locations were investigated and subsequently
discounted.
Ashhurst Domain - former Rangitaane village site
Akers Rd, Linton - heavy clay soil
Bunnythorpe Recreation Ground, Tutaki Road - heavy clay soil
4.5
Purchase a new, suitable property
If Council elects not to select either McCraes Bush or Kelvin Grove Cemetery
as the natural burial cemetery, the only other option is to purchase a new,
more suitable site.
Based on experience at all other sites some neighbour objections are likely to
be encountered at any new site. Adopting this option would be subject to
further investigations and a report back to Council.
4.6
Iwi consultation
Officers have discussed the various sites with iwi. Where specific responses
have been forthcoming, iwi have indicated a preference for burials to be
confined to Kelvin Grove Cemetery. An initial site proposed within the
Ashhurst Domain was dismissed when it was identified as a former
Rangitaane village site. Other sites on Council property were acceptable as
options if Kelvin Grove was not feasible.
5.
CONCLUSION
5.1
The concept of natural burial is based on rapid aerobic decomposition of an
un-embalmed body and return of the nutrients to the soil.
5.2
McCraes Bush takes this principle as of primary importance. None of the
other Council-owned sites meet this requirement as well as the soils of River
Road.
5.3
The main concerns raised by a group of local residents in Ashhurst were that
the McCraes Bush site was exposed to risk of contaminating bores and risk of
flooding. The MWH report (Appendix 2) addresses these concerns and
concludes that the risks are low and that mitigation is possible.
5.4
There are strong objections from some neighbours to establishing a natural
burial cemetery at McCraes Bush. If these objections preclude this site as an
option then an alternative site will need to be found.
5.5
In order to achieve good natural burial outcomes, finding a site with well
drained soils is a primary consideration. The McCraes Bush site meets this
requirement however if it is not selected then an alternative site with suitable
139
PALMERSTON NORTH CITY COUNCIL
soils would be the next preferred option. At this stage only properties owned
by Council have been considered.
5.6
6.
Kelvin Grove Cemetery has been shown in the MWH report (Appendix 2) to
be a viable option if significant mitigation measures are employed. Specifically
drainage and modified backfill would be required. These measures would
mean that a natural burial would need to be charged at a significant premium
over conventional burials, perhaps up to double the cost. However, families
may accept this as there is no headstone cost to follow the burial.
NEXT ACTIONS
6.1
Confirm the site for a natural burial cemetery.
6.2
Designate the chosen site as a cemetery.
6.3
Establish infrastructure for the natural cemetery at the chosen site.
OUTLINE OF COMMUNITY ENGAGEMENT PROCESS
Any site chosen for a natural burial cemetery will need to be designated as a cemetery. The
designation process is very similar to the Resource Consent process and will involve public
consultation and hearings.
COMPLIANCE AND ADMINISTRATION
Does the Committee have delegated authority to decide?
No
If Yes quote relevant clause(s) from Delegations Manual
No
Are the decisions significant?
If they are significant do they affect land or a body of water?
No
Can this decision only be made through a 10 Year Plan?
Does this decision require consultation through the Special Consultative Yes
(designation
procedure?
process)
Yes
Is there funding in the current Annual Plan for these actions?
Are the recommendations inconsistent with any of Council’s policies or
No
plans?
Brian Way
Leisure Assets Officer
John Brenkley
Parks & Property Manager
140
PALMERSTON NORTH CITY COUNCIL
Appendix 1
Site Photos – River Road, Ashhurst
141
PALMERSTON NORTH CITY COUNCIL
Appendix 2
MWH Natural Burial Site suitability Assessment Report
142
Natural Burial Site Suitability - Assessment Report
Prepared for Palmerston North City Council
June 2015
143
Natural Burial Site Suitability - Assessment Report
This document has been prepared for the benefit of Palmerston North City Council. No liability is
accepted by this company or any employee or sub-consultant of this company with respect to its use by
any other person.
This disclaimer shall apply notwithstanding that the report may be made available to other persons for
an application for permission or approval to fulfil a legal requirement.
QUALITY STATEMENT
PROJECT MANAGER
PROJECT TECHNICAL LEAD
Roger Hulme
Phil Landmarlk
PREPARED BY
Matthew Chung
04/06/2015
CHECKED BY
Matthew Chung
04/06/2015
REVIEWED BY
Phil Landmark
04/06/2015
APPROVED FOR ISSUE BY
Phil Landmark
04/06/2015
PALMERSTON NORTH
118 Fitzherbert Avenue, Palmerston North 4410
PO Box 2033, Palmerston Nth Central, Palmerston North 4440
TEL +64 6 357 4034, FAX +64 6 356 1164
REVISION SCHEDULE
Signature or Typed Name (documentation on file).
Rev
No
Date
1
20/03/2015
Final draft for Client review
MC
2
04/06/2015
Final report
MC
Description
Prepared
by
Checked by
Reviewed by
Approved by
MC
PL
PL
MC
PL
PL
Status: Final
Project No.: 80506016
June 2015
Our ref: P:\__2012 Onwards\Palmerston North City Council\80000239 Palmerston North City Council - All Projects\80506016 PNCC Natural Burial
Site\Report\Further Assessment Work\Report\Issued\Assessment Report v4 final.docx
144
Natural Burial Site Suitability - Assessment Report
Palmerston North City Council
Natural Burial Site Suitability - Assessment Report
CONTENTS
1
Introduction ......................................................................................................................................... 1
2
Risk of Contaminating Bores at the Ashhurst Site .............................................................................. 1
2.1
Surface Water Flow ....................................................................................................................... 1
2.2
Ground Water Flow ........................................................................................................................ 2
2.3
International Best Practices ........................................................................................................... 4
2.4
Discussions and Mitigation Measures ........................................................................................... 5
3
Risk of Flooding at the Ashhurst Site ................................................................................................. 6
3.1
Flood Models and Scouring Potential ............................................................................................ 6
3.2
Discussions and Mitigation Measures ......................................................................................... 10
4
Engineering of Kelvin Grove Site ...................................................................................................... 11
4.1
Background .................................................................................................................................. 11
4.2
Site Characteristics ...................................................................................................................... 12
4.3
Engineering concept .................................................................................................................... 13
4.4
Rough costings ............................................................................................................................ 13
4.5
Discussions.................................................................................................................................. 14
5
Conclusions and Recommendations ................................................................................................ 15
5.1
Risk of Contaminating Bores at Ashhurst Site ............................................................................. 15
5.2
Risk of Flooding at the Ashhurst Site........................................................................................... 15
5.3
Engineering of Kelvin Grove site ................................................................................................. 15
APPENDICES
Appendix A
Status: Final
Project No.: 80506016
– Sketch Drawings
145
June 2015
Our ref: Assessment Report v4 final
Natural Burial Site Suitability - Assessment Report
1
Introduction
Following the Palmerston North Community Development Committee Meeting on June 16, 2014, the
Palmerston North City Council (PNCC) commissioned MWH to prepare a Natural Burial Site Suitability
Assessment Report concerning the following matters:
x
Risk of contaminating private water supply bores in the vicinity of the McCrae’s Bush site at
Ashhurst.
x
Risk of flooding at the McCrae’s Bush site, with an emphasis on the potential for scour and/or
erosion.
x
Whether or not the Kelvin Grove site can be engineered for natural burials, and if so, what the
engineering costs would likely to be.
2
Risk of Contaminating Bores at the Ashhurst Site
The purpose of this assessment is to determine the potential risk of contaminant s from the proposed
burial site mobilising into the ground water, particularly at water supply bores located within close
proximity to the site. As part of this assessment, surface and ground water flow direction at the site have
been assessed and site conditions have been compared against international guidelines and best
practices. Discussions and mitigation measures have been recommended.
2.1
Surface Water Flow
Based on contour maps available from the PNCC Geo-Guide portal, the topography surrounding the
proposed site at McCrae’s Bush is generally flat and slopes gently to the north (Figure 2-1). Surface
water generally flows towards a shallow stream close to the northern boundary of the site. The stream
meanders in an easterly and then south-easterly direction towards the Pohangina River.
Figure 2-1: Contour map of the proposed site at McCrae’s Bush, Ashhurst. Note: numbers in red
denote spot ground levels (in metres).
1
146
Natural Burial Site Suitability - Assessment Report
2.2
Ground Water Flow
Existing water supply bores have been used to determine the depth of the groundwater table. This
information can then be used to determine the slope of water table of the area and predict the direction
of groundwater flow.
The depth to the water table was measured at three local bores in August 2014. Ground level
information was obtained from the PNCC Geo-Guide portal (Table 2-1).
Table 2-1: Water bores located nearby the proposed burial site
Location of bore
Distance
from
proposed
site
Water usage
GL
Depth to
water
Water level
1
Langridge property at 2-35
River Road – north of
proposed site
~300m
Stock water
62m
2.1m
59.9m
2
Kirks property at 52 River
Road – south of proposed site
~230m
Potable water
62m
2.3m
59.7m
3
O’Learly property at 78 River
Road – south of proposed site
~330m
Stock water
61m
1.5m
59.5m
Note: Water depths can vary significantly from year to year and seasonally throughout the year and it is
therefore important to conduct measurements within a close period of time. All water level
measurements for this exercise were conducted on the same day.
Flow directions were then predicted by contouring a location map with bore water elevation data in a
similar manner to topographic contours. Lines of equal groundwater height (equipotential lines) were
constructed (dashed red lines, Figure 2-2), and groundwater flow direction predicted as being
perpendicular to these lines (bold red lines, Figure 2-2).
2
147
Natural Burial Site Suitability - Assessment Report
0m
100m
200m
300m
400m
500m
600m
Langridge's stock
water bore 59.9m
100m
200m
59.9m
59.8m
59.7m
300m
59.8 m
Proposed site
59.7 m
400m
59.6m
59.5m
500m
Pohangina
River
600m
Kirk's potable
water bore
59.7 m
O'Learly's stock
water bore 59.5 m
site measured
estimated (mid-line)
700m
Figure 2-2: Equipotential lines (dashed red) used to predict groundwater flow direction (bold red)
Based on Figure 2-2, groundwater flow proceeds in a south-westerly direction. This observation appears
to be counter-intuitive (as water is essentially flowing away from the Pohangina River) but seems to be
supported by the available water levels data. However it should be emphasised that water level data
available was limited to only 3 bores, with two of the bores located reasonably close to each other. More
groundwater data, preferably from bores with higher lateral separation distances, would be required to
verify the accuracy of this flow direction. It is also necessary to know that all the water levels used to
construct the flow diagram come from the same aquifer, and for the ground elevation of the bores to be
accurately determined. In this way, the relative depth of groundwater in each bore can be determined.
The expanse of the predicted groundwater flow does not appear to be towards the bores on the Kirk and
O’Leary properties which are located approximately 230m and 330m, respectively, south of the
proposed site. International guidelines and best practices for natural burials and other related activities
were then consulted in the following section to assess the siting setback requirements.
3
148
Natural Burial Site Suitability - Assessment Report
2.3
International Best Practices
The UK Environment Guide for Green Burials
1
From research on international best practices, the publication by the UK Environment Agency appears
to be the primary guideline and the only one able to be accessed by MWH that takes natural burials into
2
account. According to Mark Blackham, director of Natural Burials , all natural burial sites in New Zealand
were developed following recommendations provided by this UK study.
The UK study provides the following recommendations for a natural burial site:
x
be located more than 10m from standing/running water,
x
be located more than 50m from a well, borehole or spring supplying potable water for human
consumption,
x
have no standing water at the bottom when it is first dug,
x
not be dug in very sandy soil, and
x
be deep enough to prevent foraging animals from disturbing the body.
Commentary:
x
The over-riding finding of the UK study is that natural burials are not problematic to ground water
because they are in the upper soil layer, so materials are caught/filtered by the soil as water
passes through the soil to the water table, do not contain any chemical toxins or pathogens, and
are absorbed by bacteria, micro and macro organisms, and plants.
x
With reference to the proposed site, separation distances between bores located at the Kirk and
O’Leary properties (230m and 330m respectively) well exceed 50m setback distance
recommended by the UK study. Even if the direction of groundwater flow is southwards (as
opposed to that shown in Figure 2-2), the separation distances between the proposed site and
bores are well in excess of the 50m setback distance.
The World Health Organisation
The concerns raised by the deputation at the Community Development Committee Meeting on the
impact of cemeteries on the environment and public health were based on a report prepared by the
World Health Organisation entitled: “The Impact of Cemeteries on the Environment and Public Health:
An Introductory Briefing”.
It should be noted that the recommendations provided in this report are intended for conventional
cemeteries where the embalming of the body and the use of preserving chemicals and non biodegradable accessories are permitted. The application of these recommendations for use on natural
burial sites would be conservative.
Comparative Guidelines
Conceptually, whilst appreciating that this is a sensitive subject for many people, the activities within a
natural burial cemetery have similarities with the disposal of animals in offal pits. Therefore it is useful to
examine the fate of contaminants from such sites as a potential analogue for seepage from natural
burial cemeteries. Therefore the guideline provided by Horizons Regional Council for farm dumps/offal
pits was reviewed along with guidelines for farm and domestic effluent disposal to the land .
1
Assessing the Groundwater Pollution Potential of Cemetery Developments, Environment Agency, UK 2004
Natural Burials is a non-profit New Zealand organisation based in Wellington created to promote, certify
and monitor natural cemeteries.
2
4
149
Natural Burial Site Suitability - Assessment Report
Table 2-2: Comparative guidelines
Guidelines Provided
by:
Horizons
Regional
3
Council
Horizons
Regional
3
Council
Horizons
Regional
4
Council
Farm
Dump/Offal
Pit
Dairy Farm
Effluent
On-site
Wastewater
Disposal
Auckland
5
Council
On-site
Wastewater
Disposal
Recommended Separation Distance from:
property boundary
10m
50m
1.5m
3m
public areas or residential
properties
150m
150m
3m
3m
surface water
20m
20m
20m
20m
20m
20m
20m
20m
not provided
not provided
1.2-1.5m
0.6-1.5m
water supply bore
groundwater (vertical
clearance)
Commentary:
x
2.4
The minimum separation distance from a water supply bore to a farm dump/offal pit, dairy farm
effluent or septic tank effluent disposal is 20m. The nearest water bore (Kirk’s property) has a
separation distance of 230m, well exceeding the recommended separation distance of 20m.
Discussions and Mitigation Measures
Groundwater flow direction predicted at the proposed burial site, based on current available data, flows
in the south-westerly direction. Based on limited data the assessed flow direction does not appear to be
towards the locality of two private bores located 230 - 330m south of the proposed site. However, more
groundwater data would be required to verify the accuracy of this flow direction. A review of international
best practices and relevant guidelines infer that the separation distances to these bores are sufficient for
safe water intake.
As a mitigation measure, a sub-surface drainage system can be provided along the southern boundary
of the site to intercept groundwater flow, which could then be channelled towards the Pohangina River.
In addition, a screen of trees with significant roots system and high water demand can be planted along
the boundary of the site. The use of trees is likely to promote a reduction in groundwater in the area and
thereby reduce the migration of potential contaminants down-grade of the site.
Additionally, groundwater monitoring bores could be located down-grade of the site to provide
environmental monitoring of the groundwater quality.
3
Dairy Farm Effluent: Rules for Achieving Compliance in the Horizons Region, Horizons Regional Council &
DairyNZ, 2012
4
Manual for On-site Wastewater Systems Design and Management, Horizons Regional Council, 2010
5
On-site Wastewater Systems: Design and Management Manual, Technical Publication No. 58 (TP58),
Auckland Council, 2004
5
150
Natural Burial Site Suitability - Assessment Report
3
Risk of Flooding at the Ashhurst Site
3.1
Flood Models and Scouring Potential
The Horizons Regional Council holds 1 in 100 year (1:100) and 1 in 200 year (1:200) flood models for
the Pohangina River, as required by the One Plan flood hazard policies. The 1:100 year flood model
shows that for most parts, the McCrae’s Bush area will be inundated by 0.5m of flood water or less. At
the stream located along the northern boundary of the proposed site, flood water levels in the 1:100 year
event have been predicted at 0.5 and 1.0m (Figure 3-1). Similar flood water depths were predicted from
the 1:200 year model (Figure 3-2).
Figures 3-1 and 3-2 also show the modelled flow velocities during the 1:100 year and 1:200 year flood
events. Velocities vary across the site depending on the flood depth and nature of the vegetation. For a
1:100 year event the flow velocities range from 0.019m/s to 0.570m/s, and for a 1:200 year event they
are marginally higher and range between 0.132m/s and 0.602m/s.
6
151
Natural Burial Site Suitability - Assessment Report
Figure 3-1: Modelled flood depths and flow velocities for 1 in 100 year event (courtesy of the
Horizons Regional Council, March 2015).
7
152
Natural Burial Site Suitability - Assessment Report
Figure 3-2: Modelled flood depths and flow velocities for 1 in 200 year event (courtesy of the
Horizons Regional Council, March 2015).
8
153
Natural Burial Site Suitability - Assessment Report
6
Coppin and Richards provide a chart (Figure 3-3) which shows that where velocities of flow are
marginally less than 1.0m/s, as they would be for 1:100 and 1:200 year events, based on Horizon’s
information, the time duration of flooding that could be tolerated by sites that have the lowest class of
cover (plain grass – poor cover), would be in excess of 50 hours (red band, Figure 3-3). The Horizons
7
Regional Council estimates that the duration of the flood events would be of the order of 30 hours
which is well within the time frame suggested in Figure 3-3.
Modelled max.
flow velocity
at McCrae’s
Bush is < 0.6
m/s
>50 hours
Figure 3-3: Recommended limiting velocities for erosion resistance of plain and reinforced grass
against unidirectional flow
The most erosion-prone circumstances on the site would be a flooding situation shortly after a burial when
no vegetation cover has been established. Figure 3-4 defines zones of suspension, erosion and
sedimentation for different grain size of soils ranging from clays to rocks.
6
Use of Vegetation in Civil Engineering: Coppin, N.J., and Richards, I.G. Construction Industry Research
and Information Association; Butterworths, Reprinted 2007.
7
Pohangina River – Flood and Hazard Mapping, Hydro Tasmania Consulting, Study Report E204350Report-01, April 2010.
9
154
Natural Burial Site Suitability - Assessment Report
Figure 3-4: Susceptibility of soils to erosion
8
The soils on site consist of fine silty sands which are likely to have a grain size of between 0.02mm and
0.06mm (red band, Figure 3-4). Indications are that these soils will erode at flow velocities of between
0.2m/s and 0.5m/s which are within the range of flow velocities expected for a 1:100 and 1:200 year event.
Whilst there is a remote chance only of a large flood event coinciding with a recent burial, it will be
appropriate to provide some form of mitigation to reduce the potential for erosion of graves on the site. This
is discussed further below.
3.2
Discussions and Mitigation Measures
Flood modelling information indicates that the site would be inundated to depths of up to 1. 0 metres in
places during 1: 100 and 1:200 year events. The estimated flow velocities are low and well under 1.0m/s
which indicates that even with poor cover by grass the site could be flooded for over 50 hours with no
scour taking place.
The site soils are fine silty sands and if they were not vegetated, for instance, following a recent burial,
then flooding of the site by a 1:100 or 1:200 year event could cause erosion of the soils. A simple
mitigation for this would be to cover the bare soil with a natural fibre mat which would serve to protect
the bare soil whilst grass and other vegetation became established on it. Alternatively, instant roll-out
lawn can be used. It is not known whether this practice would be acceptable as part of the natural burial
concept.
Another option may be to place large gravels or cobbles on top of the bare earth since rocks of up to 1
kg in mass will remain in-situ in flow velocities of up to 1.5m/s, as is illustrated in Figure 3-5. The rocks
would also serve to prevent dogs from digging up the burial sites, which has been raised as a concern
by the deputation. However, as noted above, this practice may not sit well with people who seek natural
burials for their loved ones and it would also make mowing of the sites more difficult .
8
Design and Practice – the Technical Manual for Design and Construction of Projects Utilizing the
Mechanically Bonded Polypropylene Nonwoven Geotextile Polyfelt TS, Chemie Linz AG, Austria, 1986.
10
155
Natural Burial Site Suitability - Assessment Report
1.5m/s
Figure 3-5: Riprap sizing
4
Engineering of Kelvin Grove Site
4.1
Background
PNCC recently purchased a block of land approximately 7.2 hectares in extent adjacent to the existing
Kelvin Grove cemetery (red boundary, Figure 4-1). PNCC consider that part of the site may be feasible
for use as a natural burial site.
Based on PNCC surface contour maps, ground topography slopes towards an unnamed stream on the
eastern side. Another stream traverses around a spur on the eastern side and joins the unnamed stream
(shown by the blue lines in Figure 4-1). Checks with the Horizons Regional Council indicate the site is
not within a District Plan Flood Zone.
Two residential dwellings are located particularly close, approximately 30m and 50m to the northern
boundary of the site. To mitigate potential siting objections, a 70m set back has been assumed from the
northern boundary, thus providing a total separation distance of over 100m from the nearest residential
dwelling (see area marked green, Figure 4-1).
11
156
Natural Burial Site Suitability - Assessment Report
Propose site for
natural burial
Boundary of
recently acquired
site
Future
Stream
Future
site
Future
Stream
Figure 4-1: Boundary and contour map of the proposed site at Kelvin Grove.
Based on an external dimension of 5m x 5m for each burial plot (burial pit dimension of 3m x 1.6m) and
the provision of a 5m wide unsealed road all-round the site, approximately 150 burials can be
accommodated at the proposed site (see drawing sheets 1 and 2, Appendix A). A minimum setback of
20m from the streams has been provided for the siting of the burial plots. The site will thus reach full
capacity in approximately 11 years based on PNCC’s projection of approximately 15 natural burials per
year. Thereafter, the site can be further extended at the north-western and southern side or a new site
developed at the eastern side (see areas marked grey, Figure 4-1).
4.2
Site Characteristics
Based on a preliminary soil investigation undertaken by MWH in August 2014, natural soils within the
Kelvin Grove site area are predominantly of clayey material up to a depth of 2m (see Table 4 -1).
Table 4-1: Kelvin Grove Preliminary Soil Investigation
Comment
Characteristic
Soils
Clayey with some silt
Groundwater
Depth
No groundwater depth
information available, and
water was not encountered
in auger holes to a depth of
about 2 metres. However,
soil discolouration of the
soil was evident indicating
poor drainage of the soils.
Stream running along the
boundary of the site
Surface
Water
Flood Maps
The District and Regional
planning maps do not
identify any flood plains at
or within the vicinity of the
proposed site.
Clayey soils with imperfect to poor drainage
characteristics which provide poor aeration and
therefore impeded decomposition.
High groundwater may promote water logging
which reduces aeration and may inhibit
decomposition. It is noted that the paddock
immediately adjacent to the proposed location
shows signs of ponding which could indicate a
high water table and/or poor drainage in the
area.
Surface water bodies within the vicinity of the
site may cause problems with localised flooding
during high flows or high intensity rainfall events
Regular flooding may limit decomposition
through lack of aeration within the soils. Erosion
and scour may also be an issue for the shallow
burial depth recommended for a natural burial
site. However, planting a tree or shrub over
every grave can assist in stabilising soils and
12
157
Natural Burial Site Suitability - Assessment Report
Cultural
Values
PNCC planning maps do
not identify any tangata
whenua values within the
vicinity of the proposed
site.
This site is located
adjacent to the existing
Kelvin Grove Cemetery.
General
Observations
4.3
The proposed location is
situated at the very corner
of a property which is at
lowest point in the terrain,
the proposed location for
the graves is located on a
small spur.
reducing soil moisture.
In general, culturally sensitive sites should be
avoided when siting a new burial ground.
It is noted that natural burial sites placed inside
a traditional cemetery, which has marked
graves (e.g. rows of headstones or markers),
and close to graves, are not as successful as
sites away from traditional graves, because
such sites do not fit with the ethos of the natural
burial movement
A low point in the terrain may promote overland
flow and water logged soils. The actual site
appears to be elevated which overland flow
paths are likely to flow around the site, however
there would be little scope for expansion without
improving the drainage of the surrounding area
Engineering concept
In general clay soil tends to have high water retention and is likely to result in water logging of
excavations. Natural burials however require proper drainage and aeration in the soil to promote rapid
decomposition.
To enable the site to be suitable for natural burial, soil aeration and groundwater drainage would need to
be improved. To achieve this objective, the Kelvin Grove site should be engineered based on the
following key concepts:
x
Groundwater drainage to be improved.
x
The natural soil around burial plot will be replaced with soil mix that enables natural aeration.
To improve groundwater drainage, perforated subsoil pipes (e.g. DrainFlo) are proposed to be installed
over the entire burial site. A series of perforated pipes should be installed at a minimum of 0.3 metres
below the base of the burial plots and convey collected water to the collector pipes. The collector pipes
should then discharge to the nearby stream. (see sketch drawing 3, Appendix A). Resource consent
may be required from Horizons Regional Council for discharging into the stream.
To promote natural aeration, the existing in-situ soil for each burial plot (dimensions of approximately
1.6m wide x 3m long x 1.5m deep) should be excavated and replaced with a soil/compost/sand mix. Soil
replacement could be done “on-demand” for each plot to reduce costs.
4.4
Rough costings
Subsurface drainage system
Table 4-2: Rough order costings for drainage works at the Kelvin Grove site
Description of work
Qty
Rate
Amount
1
Surveying and setting out – allow 2 days
16h
$150/h
$2,400
2
Removal of vegetation
1
6,900m
2
$0.50/m
2
$3,450
3
General levelling and road forming (unsealed)
6,900m
2
$2.00/m
2
$13,800
4
Supply and install 110dia perforated pipes at 1.5-
600m
$35/m
$21,000
13
158
Natural Burial Site Suitability - Assessment Report
1.8m depths as per proposed drainage plan
5
Supply and install 150dia collector pipes at 1.51.8m depths as per proposed drainage plan
300m
6
Backfill trench with 100mm depth of 7mm -20mm
gravel
40m
7
Backfill remainder of trench with excavated soil,
well broken up
360m
8
Connection of collector pipe to existing stormwater
drainage system at Kelvin Grove Cemetery
LS
Total
$55/m
3
$16,500
$200/m
3
$30/m
3
$2,000
2
3
$8,000
$10,800
$2,000
$77,950
1
exclude tree stumps, if any.
2
excludes engineering fees and council supervision fees.
Soil replacement
Table 4-3: Rough costings for soil replacement at each burial plot
Description of work
Qty
Rate
Amount
1
Excavate 1.6m(w) x 3m(l) x 1.5m(d) pit and
dispose excavated material on-site and backfill
with soil/compost mix – allow 4h for digger +
operator
4h
$250
$1,000*
2
Supply of soil/compost mix
8m
$180
$1,440
3
Planting/ mulching
LS
$500
$500
Total
3
$2,940
*Alternatively, this cost can be shared with burial costs.
4.5
Discussions
The Kelvin Grove site contains clay soils with poor drainage which is likely to result in water logging.
Natural burials seek to promote rapid decomposition which requires aeration. A drainage system at the
base of the burial site is proposed to alleviate water logging issue. The cost of installing a drainage
system was estimated at $77,950.
Within clay soils proper aeration could be achieved by replacing the in-situ soil in each burial plot with a
more suitable soil type such as a mix of soil / compost / sand. Each burial plot will be planted with a tree
and ground protected in the form of ground covers of shrubs. The cost of soil replacement and planting
was estimated at $2,940 per burial plot.
14
159
Natural Burial Site Suitability - Assessment Report
5
Conclusions and Recommendations
5.1
Risk of Contaminating Bores at Ashhurst Site
x
Groundwater at the Ashhurst site appears to flow towards the south-westerly direction which is
somewhat counter-intuitive, but is based on available ground and groundwater depth
information, which is approximate only.
x
Based on available data, the two known private bores south of the proposed site are not within
the groundwater flow direction. Notwithstanding this, the two bores are well away from the
proposed burial site in terms of natural burial guidelines.
x
More groundwater data would be required to verify the accuracy of this flow direction.
x
The separation distances from the boundary of the proposed site to all known private bores
satisfies separation distances recommended by international best practices and relevant
guidelines.
x
A drainage system is proposed at the southern boundary of the site to intercept ground water
flows, and deep-rooting trees planted to reduce groundwater.
5.2
Risk of Flooding at the Ashhurst Site
x
The 1:100y and 1:200y flood model shows that this area in general will be inundated by up to
0.5m of flood water and at lower lying areas along the northern boundary by 0.5-1.0m.
x
Flow velocities during the 1:100 and 1:200y events tend to increase as flood waters move inland
from the Pohangina River.
x
The predicted duration of flood events is about 30 hours which is significantly less than the time
duration that could be tolerated by sites that even have the lowest class of cover (plain grass – poor
cover), which is 50 hours. So, provided there is grass cover, albeit poor, the site would not be prone
to erosion.
x
If there were bare soils on site, such as immediately following a burial or before vegetative cover
has been established, the predicted flow velocities for 1:100 and 1:200y events would be sufficient
to erode the fine silty sands. Mitigation for this could be to use natural fibre materials to provide an
erosion protection mat whilst vegetation became established. Alternatively, instant roll-out lawn or
small boulders (about 1 kg in mass) could be used to cover the burial sites to protect them.
5.3
Engineering of Kelvin Grove site
x
A subsurface drainage system can be engineered at the Kelvin Grove site to improve subsurface
drainage at a cost of $77,950.
x
Soil replacement/planting was estimated at around $2,940 per burial plot.
x
There is sufficient space and opportunity to accommodate up to 150 burial plots at the Kelvin
Grove site.
15
160
Natural Burial Site Suitability - Assessment Report
Appendix A
– Sketch Drawings
16
161
162
163
164
REF# 1727418
COMMUNITY DEVELOPMENT COMMITTEE
COMMITTEE WORK SCHEDULE – NOVEMBER 2015
Item
No.
1
2
3
Estimated Report
Date
November 2015
December
November 2015
December
November 2015
Subject
Report on implications of providing an ‘eco-friendly’
burial space in Palmerston North
Events and Festival Strategy
Rates Remissions for housing accommodation
providers
4
5
165
November 2015
Social Housing Strategy – Delivery Options Report
December 2015
Neighbourhood Working
6
7
8
9
December 2015
Safe City Strategy Review
2016
Gambling Policy (Draft)
2016
TAB Venues Policy (Draft)
2017
Community Centres
TBA
Social Wellbeing Report
TBA
Local Alcohol Policy (Draft)
TBA
Older Persons Report
10
11
12
Officer Responsible
General Manager, City
Networks
General Manager, City
Future
Current Position
Consulting on
General Manager,
City Future
General Manager, City
Future
General Manager, City
Future
General Manager, City
Future
General Manager
Libraries and Community
Services
General Manager, City
Future
General Manager
Libraries and Community
Services
9 November 2009
Clause 80-09
11 May 2015
Clause 21-15
Chief Financial Officer
General Manager
Libraries and Community
Services
General Manager, City
Future
Date of Instruction/ Point of
Origin
Workshop November
To be reviewed in
conjunction with Social
Strategy
Workshop 12 October
5 June 2013
Clause 41-13