Affordable Housing Project

GBMAHP Logo Tiny

 

As described in the Concept Proposal, the 2020 Golden Bay Housing Survey gave insights into what many in our community could afford:

  • Ownership: 38% Can afford house < $300k (average $253k)
  • Rent:
    • 28% < $250/week ($213 average)
    • 56% < $350/week ($319 average)

To address the housing crisis, there were three key considerations:

  • Start with affordability and find solution
    • $200-$300/week for rent
    • $300-$400/week for own/rent-to-own
  • Fully comply with all existing Tasmin District Council zoning and regulations
    • No ‘workarounds’
  • Move rapidly
    • Do not rely on donations/government/philantrophist funding
    • Use existing housing solutions
    • Partner with existing organizations

This led to the development of the following approach:

  • Do not use a co-housing model. While this interests some, many want their own indpendent home. 
  • Try to build $150,000 houses
    • There are many options available which can provide a warm, fully compliant home in the price range. 
    • NOT ‘tiny homes’ as many people would prefer to live in more traditional homes.
    • Start off with 2 bedroom homes at this would satisfy 50% of the demand in our survey (3+ bedroom in future)
    • 60 sqm as the home size
    • Transportable
    • Code compliant
    • Healthy
    • Cost includes services
  • The land cost must be addressed separately to the house cost as this is what is driving unaffordability, and we need a different approach
  • Lease land through occupancy licenses which give the home owner the right to site a house on someone else's land for an agreed period (after which they would be transported)
  • For rentals site the houses on individual properties as secondary minor dwellings. The landowners would be paid an annual lease or may opt to take ownership of the house after a period of time. Where permitted by Tasman District Council, have multiple dwellings on a single site, again paying landowners for leasing land.
  • For ownership it is essential to allow for multiple dwellings on a single title with long-term leases (see below), with developments in the Takaka flood zone since Takaka township is the most desirable place for people to live. This would be achieved by securing land and providing it on long-term leasehold arrangements.
  • For implementation:
    • Partner with established entities
    • Fund through a community bond or other forms of impact investments 
    • Look for external options to increase affordability
    • Accept that you cannot help all people

As shown below, there are three different 'models' for having a home under the project:

  • Rental where the project owns the house;
  • Rent-to-Own where either the tenant or the landowner hosting the home owns the house; and,
  • Ownership where people who do not meet our elgibility criteria have access to land and would like the project to build them an affordable house (taking advantage of our efficiencies and economies of scale). 

With the first two models the project finances the houses; with the third model it is financed by the landowner (although we can connect potential participants with a mortagage broker if needed).

housing model simple

 

The project is split into three phases:

  • Phase 1: Proof of Concept. Here, we try and answer a number of key questions by building a number of houses:
    • Can land be accessed?
    • Can funds be raised?
    • Can we build an affordable home to meet target rents?
    • What are the most cost effective solutions?
  • Phase 2: Implementation. At the end of Phase 1 we review our experiences and confirm how we will proceed with full implementation. Then start building houses! The potential demand could be as many as 200.
  • Phase 3: Development. Phase 3 is focused on providing opportunities for home ownership either through outright purchase or rent-to-own. This would see the project secure land and then construct multiple affordable houses.  For Phase 3 we are proposing to adopt the model used by the Queenstown Lakes Community Housing Trust.  As shown below, this can be best described as the project is providing 'A Nest - Not a Nest Egg'. The house remains in the community in perpetuity, not in the private market. Those who purchase houses through the project benefit from the increased value of the house, but only based on the consumer's price index (CPI), not the housing price index. The differences are major: between 2010 and June 2020 the CPI went up by over 12% compared to 83% for the housing price index over the same period. If people want to benefit from house price inflation, then this project is not a good fit for them and they should focus on the private market.nest not nest egg