Redevelopment of units in Fitzroy St, South Dunedin, is set to continue, but two other projects will not proceed because of rising building costs, the council signalled.
Going ahead with a redevelopment in Oxford St, South Dunedin, and another in Thorn St, Caversham, would have increased debt by $13.9 million in the council’s draft budgets for the 2025-34 long-term plan.
There had been a 41% increase in the cost of building a home since 2019, councillors were told.
The council voted 8-6 last week to push ahead at Fitzroy St only — this would replace four units, bringing total stock back to 940 units.
Otago Housing Alliance strategic lead and former Dunedin mayor Aaron Hawkins said the political climate was difficult and austerity seemed to be showing through.
"When you’re fighting a war on a hundred fronts it’s understandable that people won’t always be able to maintain the energy to fight them all and I’m disappointed that this is a front that they surrendered, but I don’t hold that against anybody," he said.
Government agency Kāinga Ora seemed to be "running away from the city" and it was "disappointing to see council surrender" at the same time.
Mr Hawkins was mayor in 2021 when, on the back of emphatic public support, the council decided to include $20m of new capital and another $22.6m for renewal in the 10-year plan to build more community housing and redevelop and maintain housing stock.
A report in the agenda for last week’s council meeting said an advantage of redeveloping at Fitzroy St only was this "partially aligns with community consultation feedback" from the 2021-31 long-term plan.
Mr Hawkins said the council appeared to be inconsistent about its attitude to increasing costs.
"Of course things are more expensive, but certainly the line that council have run in campaigning for the new Dunedin hospital is that you absorb those costs and get on with it in terms of providing the infrastructure that your community needs."
Asked if he would be making a submission on the long-term plan, Mr Hawkins said "we’ll certainly engage in the process".
He hoped to see "where we might be able to get the support of council to contribute to the work that’s happening around public housing, even if they don’t have the appetite to be a developer themselves".
The community sector was committed to being part of the solution, he said.
"But it will require support and investment from public and private sources if we’re to get anywhere near delivering what is needed in terms of affordable housing in Dunedin."
Most of the council’s community housing consists of one-bedroom units and they are prioritised for people aged over 55 who are in urgent need of housing.
It was noted in the report building one-bedroom units came at a cost premium.
The council already had resource and building consents to build four one-bedroom units at Oxford St when it paused the community housing redevelopment programme.
In Thorn St, detailed design plans had been drawn up to replace nine units and add 11.
It appeared from the council report a planned redevelopment at an undisclosed site that could have added 10 units was also off the table.
Dunedin Mayor Jules Radich said the council was at least looking to go ahead with one of the projects.
The council had to be wary of adding to debt, he said.
"I think it’s important to remain fiscally responsible and, obviously, finish what we’ve started, but not take on any new projects at this time."
Cr Brent Weatherall described the pruned programme as a compromise.
"We just can’t increase the agreed spend when our income is not keeping up with the dramatic increase in building costs."
The vote
That the Dunedin City Council continue with redevelopment at Fitzroy St only:
For (8): Mayor Jules Radich and Crs Bill Acklin, Kevin Gilbert, Carmen Houlahan, Cherry Lucas, Lee Vandervis, Brent Weatherall, Andrew Whiley.
Against (6): Crs David Benson-Pope, Christine Garey, Steve Walker, Marie Laufiso, Mandy Mayhem, Jim O’Malley.
