And council staff appear unsure on the best way to start tackling and paying for the big list of improvements the report suggests need done at its 98 units district-wide.
The full report, prepared by Opus International Consultants, was discussed at a recent district assets committee meeting but the item included in the council agenda only recommends the committee accept the community housing heating and modernisation assessment report for now.
It is not yet pressing councillors to start deciding on where to start although the report itself outlines work it sees as urgent, improvements that are needed as well as "modernisation" jobs.
These are estimated to collectively cost the council $1.07 million, $1.23 million and $1.18 million respectively, bringing the total cost of work needed to $3.49 million.
The report was called for exactly a year ago after some members of the previous council expressed concerns about the polar-like conditions experienced by tenants last winter.
A council building inspector, who had been living at the Naish Courts complex in Balclutha, claimed he could hardly get the room temperature above 6degC.
That council eventually decided to wait for the full report into all of the housing units before deciding on any action.
The report looks at the existing condition of the units and the likely maintenance costs for the next decade.
In it, district assets manager Jules Witt said the the average cost of repairing each unit was about $36,000 but the actual cost per unit varied from about $11,000 to as high as $50,000.
He is asking the committee to consider whether a private landlord would invest such large sums of money for little return, to consider rents should reflect the level of facilities provided and, finally, if it agrees to do the work, would the council be providing better quality housing than those privately owned by elderly ratepayers.
In the past, maintenance work has been paid from rental income on an "as needed" basis and usually done when units are vacant and money allows.
The council does not fully fund for depreciation on the units and there is no money available for the upgrades.
Rates money has traditionally not been used to pay for the units but Mr Witt said the scale of the work meant a loan might need to be raised.
Council inquiries about getting taxpayer help through the New Zealand Housing Innovation Fund returned a "rather negative response", prompting him to suggest it might be wise for the council to consider the future of community housing in the district.
"Urgent repairs are necessary to maintain the assets to a desired level but these will need to be prioritised according to the need. Further funding will also need to be considered and this may result in an increase in rental accommodation."
Mr Witt said a formal approach will be made to the Government's housing fund.
Once it gets a response, the council could start prioritising work and look at how to pa
