Council to reconsider proposed rent increase

Photo: ODT files
Photo: ODT files
Rental increases for Dunedin community housing tenants could be softened after opposition to proposed double-digit percentage increases.

The city council had initially proposed to increase the community housing rental rate by $14 per week for single units and $25 per week for double units — an increase of 11% — during this year’s annual plan process.

But the council received more than 240 submissions on the community housing portfolio, of which 171 submissions were related to the proposed 11% rent increase. Seventy (41%) of responses were in favour of the increase and 101 (59%) were against it.

Many of those submissions raised concerns about the affordability of the increase for the tenants during a cost-of-living crisis; others went on to suggest the increase should be in line with either CPI (4%) or the current increase to benefits (4.6%).

Council staff have prepared two alternative options for the councillors to also consider at Tuesday’s meeting.

These were a 3% increase in rent, which would be in line with previous annual increases to rent, or a 4.6% increase in rent, which would be in line with the increase applied to all benefits, including NZ Superannuation paid by Work and Income NZ.

Both of these alternative options "would require additional operating costs to be met by rates", the council staff report said.

Setting the increase at 11% would mean that $2.4m in funding would need to be found from rates revenue, whereas setting the increases at 3% or 4.6% would mean about $2.6m would need to be found from rates.

"Staff note that a community housing rent increase of 26% would align with council’s revenue and finance policy in the long-term plan 2021-31.

"However, a 26% increase would potentially be a decision of high significance and staff consider the alignment of the policy and rents is better considered as part of the nine-year plan."

The council has 940 units in its community housing portfolio which are prioritised for people aged over 55 years, and in urgent need of housing.

The portfolio complements other social and community housing providers in the city that prioritise other groups.

Since 2020 the cost to operate the Community Housing portfolio has been increasing due to general rates, insurance, and depreciation.

Before the council began the annual plan process, the council voted on putting the 11% proposal out to the public.

Councillors Bill Acklin, Sophie Barker, Kevin Gilbert, Cherry Lucas, Lee Vandervis, Brent Weatherall, Andrew Whiley and Mayor Jules Radich voted in favour of putting it out for consultation.

Crs David Benson-Pope, Christine Garey, Marie Laufiso, Mandy Mayhem and Steve Walker voted against it.

After the council makes their decision, the rent increase would take effect from August 9 or from the one-year anniversary of the tenancy, whichever is later.