23 May 2016

Media release:

Council tenants face eviction as government cons City Councils

Tenants of council-provided social housing face the risk of eviction after the government mislead councils into putting council housing into private housing trusts believing this would give them access to the government’s IRRS (Income Related Rental Subsidy).

However it has now become apparent that the trusts will not be eligible for the subsidy for any existing tenant because the government is now insisting the IRRS will be available:

· ONLY for NEW tenants of council housing and

· ONLY if they are referred through the Ministry of Social Development

So far four councils have established social housing trusts (Auckland, Hamilton, Christchurch and Whakatane) and as far as we know none of them were aware of the new government requirement when they voted to do so.

Other councils are still giving local residents wrong advice. For example last month Horowhenua mayor Brendan Duffy told residents the council was looking to sell its social housing portfolio to a social housing provider because

“Under a community housing provider, tenants could actually be better off by up to $61 a week because they would be able to qualify for the government's Income Related Rent Subsidy”

Thus is untrue and reflects appalling advice being given to residents by councils which are being deliberately misled by the government.

The housing trusts were established specifically so they would have access to the IRRS for their eligible tenants but will find themselves in the impossible situation of having to evict existing tenants in order to gain the IRRS subsidy for new tenants.

The financial viability of the trusts depends on the IRRS subsidy which will now only be available if council trusts replace existing tenants with tenants from government waiting lists.

Christchurch example

From the outset Christchurch City residents were seriously mislead.

In April 2014 the Christchurch Housing Accord was signed between Mayor Lianne Dalziel and Housing Minister Nick Smith and included:
“The government will work with the Council to enable the entity (what became the Otautahi Community Housing Trust) to become a registered Community Housing Provider and have access to the Income Related Rent Subsidy for qualifying tenants of the new Community Housing Provider”

In May 2014 the Council consulted with the community and told residents in its May 2014 Statement of Proposal to form a housing trust:

“As the Council is ineligible for the Government’s IRRS assistance, it is difficult for the Council itself to satisfy this requirement. It will always be more cost-effective for the local community to have a tax-payer contribution. The Council, therefore, has little choice but to restructure its involvement in social housing so that eligibility can be secured. This will necessarily involve ownership or control of the existing social housing portfolio being divested to a new entity that is eligible for the IRRS.”

Finally in September 2014 Christchurch City councillors voted to set up the Otautahi Community Housing Trust for the city’s social housing believing the Trust would get the IRRS (Income Related Rental Subsidy) from the government for its eligible tenants.

“That the intention would be to lease appropriate Council housing to that entity in order to access the Income Related Rent Subsidy…”

Council have allowed themselves to be taken for a ride by a deviant government determined to transfer the housing crisis onto community housing providers.

It remains to see if any of these councils will have the backbone to fight the new government requirements.

ends

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