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Two units in the first cohousing project to be built in Dunedin are set to be owned by the city as social housing.
The Dunedin City Council yesterday voted to commit about $700,000 - or possibly more - to buy two of the units planned for the former High Street School site.
Construction of the project, the second cohousing project in New Zealand, is expected to start early next year.
Urban Cohousing Otepoti Ltd was granted resource consent in 2014 for 26 units, a common house and shared grounds.
The group's co-director, Catherine Spencer, said last week almost all the units set to be built, which started at about $240,000 for a one-bedroom unit, had been sold.
Ms Spencer spoke at a public forum before the issue was discussed by the council yesterday.
She said all units needed to be ''spoken for'' before the banks would lend money for the project to go ahead.
While nobody had signed a sales and purchase agreement, 19 units were spoken for out of what was now expected to be 22 units to be built.
Ms Spencer said suggestions in a council report council staff would have to go to monthly co-housing meetings at the site were not correct.
The report from property manager Kevin Taylor noted one disadvantage of the plan was additional work for council staff in letting properties in the development, because prospective tenants would need to ''buy into cohousing philosophy'', and because tenants might need to go through an induction process to live there.
''This, I assure you, is not the case,'' Ms Spencer said.
Tenants would have to go to meetings, and the cohousing group would run the induction meetings to make sure tenants were ''the right fit''.
At the meeting, Mayor Dave Cull moved the council agree to buy two two-bedroom units at the site.
Cr Kate Wilson added an amendment the council keep the option of upgrading one of the units to a three-bedroom home, though Mr Taylor said there was ''absolute emphatic demand'' for one- or two-bedroom homes.
The cost of two two-room units was $690,600, though a three-bedroom unit would be more.
Deputy mayor Chris Staynes seconded the motion, which passed with no opposition.
Last night, Mr Cull said councillors were aware through the group's resource consent application of its plans, which were before the council for the first time.
''Some of us might have been aware in parallel, subsequent to that, the group had come to the council and suggested there may be some benefit to both of us by having a social housing component to it.''
Asked if a communal project was the best fit for council tenants, Mr Cull said historically the council's social housing was set up for elderly people, and the vast majority in the past had been elderly people of limited means.
More recently it had been decided social housing needs in future would expand beyond that.
The council was now ''acutely conscious'' of housing challenges across the board, so it would have been building more social housing, or having it built.
The cohousing project fulfilled some of those aims.
''It seemed to me worth giving, even if it's just a trial. It's only two units, and it's worth giving it a go because it's a very well intentioned and well organised group.''