The decision left tenants feeling uncertain, but they were told yesterday not to panic - they were not about to be thrown out of their homes.
The Clare St units, now 45 years old, and with a current rateable value of $700,000, are part of 108 units of community housing owned by the council in Oamaru, Hampden and Palmerston.
On 2089sq m of land, there are 11 bedsits and six single-bedroomed units built of Oamaru stone in 1965, the first community housing built by the former Oamaru Borough Council.
Yesterday, representatives of the council met about a dozen of the tenants and announced the decision to sell.
All units are occupied, but only four of the tenants meet the criteria for housing for the elderly, of being over 60 years and on limited incomes or benefits.
The rest are of varying ages.
Tenants were subdued when given the news, seeking assurances they would have plenty of warning if they had to move, rents were increased by any new owner, or other major changes made.
One tenant said they were all on limited incomes, so any rent increase would cause anxiety.
Rents at present are $70 a week for bedsits and $80 a week for one-bedroom units in the complex.
The units will be offered for sale as a going concern through A. C. Spivey Ltd, with existing tenants remaining in place.
For the past six years, the complex has been managed by the Meadowbank Bowling Club under contract to the council.
Tony Spivey jun said tenants would be given 90 days notice of any changes.
That would give tenants time to consider their options, including looking for other accommodation if rents went up too much.
Tenants aged 60 years and over who met the criteria could apply for council-owned and managed units.
It would "take a few weeks" before a marketing programme was organised and the complex put on the market, and he promised tenants would be kept informed.
Once the complex was on the market, tenants would be given at least 48 hours' notice of any inspection by prospective buyers, who would be accompanied by Mr Spivey.
Mr Spivey's advice to tenants was: "Don't panic - you're not going to be thrown out of your homes.
Just carry on normally and we'll work with you to make the transition as easy as possible."
The decision to sell follows a community housing review in 2006 and other reviews since then.
Part of this has been reviewing the internal layout and design of all of the units council owns.
As a result, the council decided to progressively renew the present community housing stock either by refurbishing it or selling to provide funds for new units that met modern requirements and building codes.
The council has committed itself to spending $3.6 million in 2011-12 to upgrade 30 community housing units, using a mixture of loan and Government subsidy.
