A planned auction of pensioner flats has been pulled by Hamilton City Council after complaints social agency buyers were being shut out.

The block of River Rd flats was due to be auctioned next week, drawing criticism from city politicians who argued they had reserved the right to consider offers from "sympathetic" buyers prepared to continue running them as social housing, rather than being sold to the highest bidder.

The River Rd block is one of three regarded by council staff as not fit for purpose, and endorsed for sale in June this year by the council.

But in an email to elected members council general manager performance Blair Bowcott blamed "mis-communication" between staff and the real estate agent for the situation, and confirmed the auction wouldn't happen. "Staff have instructed the agent to change the River Rd sale approach to reflect that of the other two pensioner housing properties. The sale process for all three properties is an expression-of-interest campaign, that will allow offers from sympathetic buyers and open market offers." All three property campaigns would now close on September 14. "There will not be any auction," Mr Bowcott said in the email.

The best offers for each site, representing a combined offering of 51 flats of which 21 are currently vacant, along with genuine sympathetic provider offers for any of the sites will go to the council on September 27.

Tenants Action group spokesperson Audrey Durose was late yesterday relieved to be told of the auction being canned, although she was pessimistic about the likelihood of a sympathetic buyer.

Residents learned of the intended auction only when a potential buyer turned up to have a look around: "One of the ladies was talking to them . . . and he said something about an auction on the 12th. I suspect a developer is going to get hold of it, but at least it gives the social housing providers a chance," Ms Durose said.

Councillor Dave Macpherson had earlier taken council staff to task over the auction, complaining there was nothing in the auction advertising to suggest the council was open to receiving expressions of interest in the River Rd property from sympathetic buyers, outside the auction process.

The agent will now follow up with all potential bidders who had expressed an interest in the auction for the River Rd property and encourage them to participate via the expressions of interest process, said Mr Bowcott.

Councillors in June gave themselves wriggle room by asking that offers from buyers prepared to operate the pensioner flats as social housing be considered.

Their 9-4 vote followed the defeat of a move to offer the properties only to sympathetic buyer, which was expected to return about 20 per cent less.

- © Fairfax NZ News

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