Rental increases proposed for council-owned elderly housing will be staged over two years in the Ashburton District.

Councillors discussed potential changes to the elderly housing policy at a hearing last week, where they signalled a staged increase from around 55 to 80 per cent of the market rate for existing tenants, with any new tenants starting at the 80 per cent rate.

The council owns and maintains 102 units in six complexes spread throughout Ashburton, Methven and Rakaia, available for people aged over-65.

Most of tenants are eligible for Government’s accommodation supplement, so rental increases will predominantly be covered by the government subsidy.

The council was anticipating a report from the Ministry of Social Development on the tenants’ eligibility for funding assistance, but it was not received in time for the hearing.

Council chief executive Hamish Riach said the policy change followed discussions about lifting rents so ratepayers don't have to subsidise the cost.

The council currently charges around 55 per cent of the market rate for some of its units, but to afford the maintenance and renewals, without relying on ratepayer subsidy, requires an increase to at least 80 per cent.

In 2026/27, ratepayers are contributing $124,000 to the service, which Riach clarified is based on a lower level of maintenance and renewal than is proposed for when the rents increase.

During the policy review process, the council contacted all tenants, held information meetings, and facilitated sessions with the Ministry of Social Development so tenants could see what assistance is available.

Fourteen tenants attended those sessions.

Council property manager Renee Julius said tenants that already receive the accommodation supplement would see an increase to cover most of the rent rise, and the increase may mean other tenants become eligible for government subsidy.

Of the 57 submissions on the policy changes, 60 per cent (41) came from tenants.

Councillor Julie Moffett said the response from tenants suggested they accepted the need for the increase and “they do seem to understand why”.

The councillors all agreed the increase was necessary to facilitate the required increased levels of maintenance, without the cost falling back on ratepayers

The debate wasn’t on the why to increase the rent, it was the how.

Councillor Deb Gilkison agreed with some of the submissions suggesting phasing in the increase for existing tenants to avoid an “aggressive jump”.

Deputy Mayor Richard Wilson disagreed as he said the council's elderly person housing is for the “most needy in our society” and because of that the Government’s accommodation supplement will cover much of the increase.

Wilson said the intention is to make the service self-funding and to defer it with a staged approach just means the cost continues to fall back on people “paying for it elsewhere from their rates”.

Ashburton Mayor Liz McMillan preferred a staged increase, “but I do think overwhelmingly we need to get all these units upgraded to a standard that's fit for people to live in”.

Only councillors Wilson, Moffett and Phill Hooper wanted the full raise from July 2027, but a majority supported a staged, two-year introduction.

The final draft of the Elderly Persons Housing policy, including modelling on how an increase will be phased in over two years, will come back for adoption September 23.