Over time, Roger Fewtrell hopes to use his wealth to give up to 250 first-time buyers about $100,000 each towards deposits for "affordable, new, nice watertight homes" he plans to build across the city.
Mr Fewtrell, who sold his business Southern Hospitality last year, said people would have to go through a selection process to get the gifts.
"I am not the man at the bottom of the cliff doling out food parcels. The aim of the game is to get people who are trying hard into their own house, whatever it takes."
He wanted to give the money to people who were "battling to save enough for a house deposit while the cost of living is going up and are capable of servicing a mortgage. There are heaps of people paying rent who have no hope of saving for anything, let alone a house".
Amounts given by him could vary, depending on the person’s need, Mr Fewtrell said. It could be between $50,000 and $150,000 "for a really deserving case".
The gifts would begin in about a year once the homes started to be completed, he said.
Mr Fewtrell is also setting up a charity called Dunedin Homes Charitable Trust, which will invite people to apply for home improvements such as new roofs, double glazing or heat pumps.
In January this year, Mr Fewtrell said he was developing about 60 affordable homes across the city and would be selling houses about $100,000 below value to be affordable.
Speaking to the Otago Daily Times on Friday, he said his company DRDL2023 — which stands for Dunedin Residential Developments Ltd — was now aiming to build four times as many homes.
His company had to sell homes at market value, which had led him to the decision to simply give away cash from his personal wealth to help people into one of his homes, rather than offer homes at a discount. The homes would still be sold at affordable prices, he said.
"I’ve looked at all the options but the only sensible way is for me personally to donate the money," he said.
He hoped to achieve more homes for the city partly through getting consents for subdivision of existing sites, Mr Fewtrell said. Homes would mainly be stand-alone homes on a 400sq m to 500sq m section, although some apartments were being built.
A tender for the roadworks and other infrastructure for his development of 18 homes in a paddock behind Ross Home in North East Valley was happening within a fortnight, he said. Six building firms were building houses on the site, to give variety and make it look like everyone built their own homes, he said.
People applying for one of Mr Fewtrell’s house deposits will need to complete a form, which Mr Fewtrell described as being a bit like applying for a mortgage.
Applicants will have to demonstrate they have a job, can pay a mortgage and have managed to achieve some savings of their own to contribute to the deposit.
If a homeowner who bought from him and benefited from the deposit handout wanted to sell their home within three years, they would have to sell it back to him for the same amount they paid for it and return the handout, Mr Fewtrell said.
After three years, they would be free to sell to whoever they wanted and keep any capital gain, he said.
The plan aimed to prevent his homes being sold to investors, although some investors might still try to "pull the wool over his eyes", Mr Fewtrell said.
Mr Fewtrell, 75, described giving away his hard-won fortune to help people have healthy and affordable homes was his "master plan ... and great fun.
"How many property developers want to spend the last years of their life giving their money to people they don’t know? It’s got to be silly, hasn’t it?"
He said it left plenty of money for himself. He had about $10m in land assets and had already given an inheritance to his two children. Any money left over when he died would go to charity, he said.
