A report into a planned ''boutique'' rental housing development in Arrowtown, valued at more than $3.5 million, recommends the community be consulted over the proposal, Local Government Act 2012 requirements appearing to have been satisfied.
The Queenstown Lakes District Council will discuss the report, prepared by regulatory and corporate general manager Roger Taylor, at its meeting on Tuesday.
The proposal, to develop 10 homes at 11-21 Suffolk St, to be held in perpetuity by the Queenstown Lakes Housing Trust on behalf of the community, will be discussed at a public meeting in Arrowtown on Wednesday night.
In its report to the council, the trust described the site as ''an unsightly blemish in the Arrowtown urban area'', comprising 12 ''old, dilapidated cabins used for short-term rental''.
The trust planned to build a ''comprehensive'' architecturally designed residential development, eight of the homes to be rented to the trust's eligible households and remaining two reserved for senior citizens.
The trust's proposal would tidy up the area, ensure the land remained in community ownership, create a community asset valued at more than $3.5 million and require no risk or new investment from the council.
In his report Mr Taylor said available data demonstrated the housing affordability problem in Queenstown was worse than anywhere else in New Zealand. However, at a meeting in April the council debated the merits of giving the land to the trust and, while until December last year there was a ''clear basis for council's involvement in providing affordable housing'', an amendment to a section of the Local Government Act created three ''tests''.
They were an ''activity test'', to determine if a development could be categorised as local infrastructure, local public services or regulatory functions; a ''quality test'', to determine if the proposal was fit for purpose and provided for reasonable future growth; and the ''economic test'', to determine if it was the most cost-effective option for businesses and households.
Mr Taylor believed both the activity and quality tests could be met, but there could be ''potential difficulty'' in meeting the economic test.
''On a stand-alone basis, gifting the value of the land results in a net loss of community equity when considered strictly on the basis of the balance sheet of council,'' his report said.
''However, that has to be balanced by two factors: the gift is to another community-`owned' organisation and by gifting to [the trust] they are able to attract government funding that will significantly increase the combined equity value of the community.
''In this basis, it can reasonably be concluded that this proposed approach is the most cost-effective way of providing affordable housing to this community.''
Should the trust receive a $1 million grant from the Crown, the support of the council and the community, it hoped to have the land transferred to it on September 30, the expiration date of the leases.
