Fresh questions are being asked about the Dunedin City Council’s investment in community housing, as a new report shows a deficit within the portfolio’s operation is set to hit $600,000.

The growing deficit was highlighted in a staff report delivered to councillors at this week’s DCC pre-draft annual plan hearing.

The report, by planning and support manager Anna Nilsen, showed a deficit which stood at $100,000 in January last year was expected to reach $320,000 by the end of this financial year, in June.

That was forecast to nearly double to $600,000 in the 2020-21 year, the report showed.

In response, the council signalled again that it would review its existing Dunedin housing policy and social housing strategy in time for next year’s long-term plan hearings.

The report prompted questions from some councillors at this week’s hearing.

Cr Carmen Houlahan said the council’s role was to look after the city’s most vulnerable, but questioned whether it should be involved in community housing.

Cr Marie Laufiso said social housing fitted with the purpose of local government as it promoted communities’ wellbeing.

Mayor Aaron Hawkins acknowledged the issue needed greater attention in the long term, with a focus on people unable to afford to rent, let alone buy houses.

An increased number of public housing units would ensure more people could live in suitable homes, he said.

The report detailed how the mounting deficit was fuelled by compliance costs, ageing assets and general costs of material and labour increasing faster than rental revenue.

Total rental revenue across the portfolio was $6.5million in the draft 2020-21 budget, against expenditure of $7.1million.

The council had not broken even for nine of the past 15 years.

The report said increases in the 2019-20 year were within 2% and a proposed increase in the 2020-21 annual plan was less than 3%.

This was because rents were kept low to remain affordable, based on being set at 30% of a tenant’s average income.

The report said the average rent was $119 per week, for various types of single-bed units.

Councillors noted the review of the Dunedin housing policy, and its social housing strategy, in time for next year’s long-term plan hearings.