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Base Contracting has started site preparation work for the first stage of a Queenstown Lakes Community Housing Trust project to build 10 homes on Suffolk St land bordering Jack Reid Park.
Trust chairman David Cole said the four homes comprising the first stage were expected to be ready for occupancy next February. A start on the remaining six homes depends on Queenstown Lakes District Council support for a new community and sports centre in Jack Reid Park.
If the centre gets council approval and funding, it will replace buildings used by the Arrowtown Rugby Club that extend into the housing project site.
Mr Cole said the trust had spent the past 15 months working through the planning process for the project. The final hurdle, securing access across reserve land to the site of the six units in the second stage, had taken about two months to resolve.
The trust has faced stiff public opposition to the project. The council transferred the Suffolk St property to the trust last June, despite about two-thirds of public submissions on the proposal being opposed.
A majority of people attending a public meeting on the project last May also expressed their opposition.
Mr Cole said gaining approval for the project had been a ''robust process''.
''You always have to respect other people's views and opinions, but I'm optimistic that when we've completed the development, Arrowtown people are going to be impressed by the amenity and its visual appeal.''
The $3.6 million project is being funded by a $1 million grant from the Government, as well as trust cash reserves and borrowing.
The homes will be available at below-market rental rates for a maximum of five years and, unlike the trust's other houses, will remain in trust ownership in perpetuity. Eligibility criteria include the tenant being a New Zealand resident, and at least one member of the household being in full-time employment.
Trust executive officer Julie Scott said its ''affordable rental'' scheme aimed to help tenants save so that by the end of their tenancies, they could move on to another trust scheme that assisted lower-income households into home ownership.