Selling council-owned housing could once again be back on the agenda for Hutt City.
Hutt City Council has just over 200 properties for the socially disadvantaged and elderly. The properties are managed by the council-controlled company Urban Plus, which is struggling with high debt and a lack of working capital.
In the mid 1990s the council sold the bulk of its housing stock to local businessman Dick Werry. Politicians at the time argued the council had a role to make sure the socially disadvantaged had somewhere to live.
Most of the properties it owns are one bedroom units.
Urban Plus chief executive Gary Nichols earlier this month presented a report to the finance committee outlining its difficult financial situation.
Its debt of $9 million is too high and it needs to look for ways to reduce it. Urban Plus had also paid too much for some of the properties it purchased from the council, Mr Nichols said.
A cash injection was needed if Urban Plus was to meet its aim of building new homes for the socially disadvantaged, he said.
The only way to improve the financial situation was to get involved with more commercial developments. That could see Urban Plus pursuing developments in Wellington City and Upper Hutt.
Councillor Chris Milne disagreed that was the only option and said Urban Plus could use the capital from selling its housing stock for new properties.
Its housing units are valued at about $13 million, which equates to roughly $80,000 a property. That is a lot of money to have tied up and he noted it would pay half the cost of the Petone Arena.
Urban Plus could use the capital from the properties to build new homes.
"We need to make this $13 million work for us."
Housing New Zeakabd has numerous properties in Lower Hutt on large sections, which were perfect for re- development, he said.
"If we can work with HNZ to access their properties, then we can really get cracking."
The city needs more one bedroom units, which private developers are not interested in building, he said.
If Urban Plus sold 20 per cent of its stock each year it could use the money to build new one bedroom units. In 10 years it would have doubled its number of properties and replaced its existing old properties with modern buildings.
After the meeting Mr Milne said he doubted councillors have the stomach to sell all the properties. His plan allows the council to retain a role in social housing, fund Urban Plus, and significantly increase the number of one bedroom units.
The committee agreed to look at the idea and invite HNZ to be part of the discussion.
- Hutt News