Fresh questions are being asked about the Dunedin City Council’s investment in community housing, as a new report shows a deficit within the portfolio’s operation is set to hit $600,000.
The growing deficit was highlighted in a staff report delivered to councillors at this week’s DCC pre-draft annual plan hearing.
The report, by planning and support manager Anna Nilsen, showed a deficit which stood at $100,000 in January last year was expected to reach $320,000 by the end of this financial year, in June.
That was forecast to nearly double to $600,000 in the 2020-21 year, the report showed.
In response, the council signalled again that it would review its existing Dunedin housing policy and social housing strategy in time for next year’s long-term plan hearings.
The report prompted questions from some councillors at this week’s hearing.
Cr Carmen Houlahan said the council’s role was to look after the city’s most vulnerable, but questioned whether it should be involved in community housing.
Cr Marie Laufiso said social housing fitted with the purpose of local government as it promoted communities’ wellbeing.
Mayor Aaron Hawkins acknowledged the issue needed greater attention in the long term, with a focus on people unable to afford to rent, let alone buy houses.
An increased number of public housing units would ensure more people could live in suitable homes, he said.
The report detailed how the mounting deficit was fuelled by compliance costs, ageing assets and general costs of material and labour increasing faster than rental revenue.
Total rental revenue across the portfolio was $6.5million in the draft 2020-21 budget, against expenditure of $7.1million.
The council had not broken even for nine of the past 15 years.
The report said increases in the 2019-20 year were within 2% and a proposed increase in the 2020-21 annual plan was less than 3%.
This was because rents were kept low to remain affordable, based on being set at 30% of a tenant’s average income.
The report said the average rent was $119 per week, for various types of single-bed units.
Councillors noted the review of the Dunedin housing policy, and its social housing strategy, in time for next year’s long-term plan hearings.
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Yes, the new Labour-led government with the Greens changed the Local Government Act back to what it was before the National-led government restricted the ‘purposes of local government’ like this: 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. (Local Government Act 2002, section 10 (1)).
Now the law is back like this again: « The main objectives of this bill ( the Amendment which is now law) are to restore the purpose of local government to be "to promote the social, economic, environmental, and cultural well-being of communities"; ...’
But just because councils again have the legal power to do ANYTHING is no sound argument that they should. Ratepayers couldn’t possibly afford it. Councils also have a legal responsibility to be financially prudent and fair to all residents. Their core business is to manage the city affordably. A vast difference in these two political views about ‘the purpose of local government’ - practical and realistic or utopian and unaffordable.
The more local government is involved in buying up land and building residential property the more the people who know how to do this efficiently are stopped from doing it. Government, and especially local government, is growing stronger and more and more controlling in our lives. Our freedoms are being reduced every day. It is election year. Thank God we still have the freedom, if we choose to, to bring this growing oppression to an end.
Instead of spending ratepayer money cutting bus fares or destroying business on George St, this area would be a far better place to spend $60 to $70 million. Just how many housing units could be built for $30 million leaving plenty left over for upgrades and maintenance. It wouldn't remove many cars from the road but it would actually help people.
This council isn't interested in helping ratepayers or general Dunedin citizens.
It's only interested in pushing its extreme-left ideology. No cars, meat, pets, privacy, profit or dissent allowed.