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CHAG Submission On Council Housing Sales

Council Housng Action Group

c/- Sigrid Shayer

12/7 Hayden Street

Freemans Bay

Ph: 09 3611517

Submission on the Statements of Proposal to sell Auckland City’s pensioner and general residential housing

June 6th 2002

This submission speaks on behalf of many people, nearly a thousand of whom filled in forms produced by CHAG and made their own individual comments against the sale of the Council’s housing stock. Over 7,500 people who signed the Wake Up Auckland petition were also against the sale of Council housing. These thousands are just some of those that feel this way. They can be but a reflection of the wider view that these sales are unethical, unnecessary and emanate from a plainly obstinate stance over the merits of public intervention in the private property market versus ostensibly a need to raise capital to lower the City’s debt. Some of the submissions against the sale of housing are heartfelt pleas to stop the devastation about to be brought upon their parents, family and members of the community. Many are against the principle that a Council can just suddenly dispose of an asset which serves such a vital purpose, now and in the future.

The Council Housing Action Group and Wake Up Auckland have organised many well attended meetings, and where protests have taken place, much support by members of the public has been registered by the sounds of many toots from passing cars. The Government itself is very concerned about the matter as was indicated when John Tamihere MP addressed one of our public meetings on behalf of the Prime Minister Helen Clark, and by their intention to strengthen the provisions of the Local Government Bill in favour of much more public input into such a decision as well as more research into its impact.

This submission will raise the issues of responsibility, the lack of adherence to democratic procedures incoming to this decision, Auckland’s unique property market and its effect on affordability, the individual and family devastation that is being caused, the longer term costs of such a decision, and the overall need to stop the sales and front up more considerately to how to address housing issues in this city.

Whose Role?

The City currently owns around 1600 pensioner units over 53 sites, and around 130 general residential units, mainly in Freemans Bay and Grey Lynn. These have been in Council hands for at least 30-40 years. The core reason given for selling is that the role of housing provision is one for central government, not local government. However, there has been a long history of partnership between central and local government, with low interest loans being given to local government, including Auckland, for the building of rentals for low income households and pensioners. Local benefactors have also gifted land for such purposes. The Local Government Act even encourages local government to get involved, by giving them powers to buy land for housing, to build, purchase or convert housing and flats, and to advance loans for housing purposes.

Only 4 local authorities in the country do not provide pensioner housing. Auckland is in danger of setting the trend, backwards. Christchurch City Council, not much smaller than Auckland City, has nearly 2,600 units for low income households and pensioners, at below market rents, and with years of good management has created a healthy working surplus.

Yet despite the Council pointing the finger at central government it does not appear to be negotiating with central government, and it certainly is not negotiating amidst the Auckland communities. One has to wonder whether the majority on this Council would rather there be NO intervention at all by the public sector in housing matters, and instead workhouses (from the Victorian era) built to keep the poor and their families off the streets. The private sector will never be able to ensure that everyone has a decent, secure affordable home. This is a basic human need as the home is a basic building block in our lives, providing security and stability from which we can engage with the wider society. The Council’s decision to sell goes against a range of UN declarations on these matters.

Affordability

This city needs more housing affordable to low income households, not less. Our society is becoming more unequal, with the gap between the rich and poor ever widening. NZ is a low wage economy for most people. Rents and property prices are rising before our eyes into the hands of property speculators and developers. Research for the Auckland Regional Growth Forum (RGF)’s draft Affordable Housing Strategy has shown that a significant number of low, and even moderate income households, are experiencing severe affordability problems. Those 40% of the region’s households with an income of $30,000 or less, are finding it virtually impossible to buy a home in the Auckland area . Many tenants in Auckland City are paying well over 50% of their small incomes on rent. HNZ can’t cope, with nearly 3000 people on their waiting list just within the Auckland city boundary .

With the projected population growth and rise in land values, the RGF report predicts that these affordability problems will increase by at least 50% in the next 15 years. The elderly will also be making up a greater proportion of the population and with increasing numbers of younger people in Auckland not able to afford owning a home, there will be a higher demand on low cost rental housing as they get older.

Sales Strategies and Democracy

The pensioner and residential housing stock have different sales strategies applied to them. The residential units are being disposed of in indecent haste and with no regard for the democratic process, and it would appear that this is breaking the law. This is despite the fact that these units have paid for themselves and are paying their way without drawing on rates. It will be very difficult to regain the equivalent stock in the not-for-profit sector.

Already 13 residential units are in the process of being sold, with the intention to put the remaining 120 or so that are still tenanted on the market as soon as Council finalises the annual plan at the end of June. One has to be cynical about the sincerity of the Council in heeding the views contained within the submissions and the whole consultation process. With vacant residential units already being sold off, and tenants who are willing and who can afford to buy being forced to complete sales agreements by the end of July, it would appear that the Council has unilaterally made its decision. It made it before it came into office, with no intention of being representative of the people, rather seeing their election as giving them power to do what THEY want, much of which was not known to the electorate. The sales of the vacant properties aren’t even in the annual plan, yet they are plainly part of the overall sales policy. That is NOT what this country’s democratic process is supposed to be.

Such terrible damage was done when the Les Mills Council last sold off the majority of the stock in the most cold hearted fashion from 1996 to 1998. The intense strain then was too much for some. People who had lived in the area for many years were shunted off unwillingly into unknown areas, cut off from their usual networks, their family and places of work. Although current tenants have been given security of tenure until March 2003, their lives are about to be disrupted, even turned upside down. Many are in despair.

Pensioner Upheaval

And this is just the beginning. The council’s 1,600 pensioner units, spread over 53 sites across the city, are next in line for sale, this time over 20 years, with 14 sites earmarked for sale in the next 4 years, effecting at least 250 people. Tenants have been guaranteed tenure for 20 years only, but not of their current home, only for a pensioner unit, any pensioner unit. They will be forced to relocate to other sites, sometimes more than once, in order for a site to be made vacant prior to sale. Many are frail and are accustomed to their local community within the pensioner village and beyond, their local doctors, shops and other services. This is not what we should expect from a “civilised’ society.

Out of Control

As a supposed caring and civilised society we have a contradiction when the home is also viewed as a form of capital and commodity investment and used to speculate on future monetary profits. Property prices have reached such absurdly high levels, far removed from the early days when they were a more manageable proportion of the average income. Prices are now so high in the UK that mortgage lenders are debating the merit of offering mortgages on 50-100 year terms, with repayment carried on by the mortgagee’s children. This could be what will happen here. Selling off publicly owned stock will contribute to this problem, as less is retained in the not-for-profit sector where it can be offered at below market rent. We need to rethink our approach to housing provision.

Housing Policy

The City’s existing policy towards housing is one of research, advocacy, regulation and provision, and in particular finding ways to work with other parties. The broad framework in which the city’s role in housing is located, developed from the extensive and comprehensive consultation process behind the current “Community Vision for Auckland 2020’ (Strategic Plan April 2000) was to “set a strong direction for Council activities - and their funding - for the next 5-10 years”. I would not reckon much has changed, and with the Mayor only getting 18% of the total Auckland vote, much of which was reportedly from road enthusiasts, there certainly would not be a mandate for this action. The many pensioners who voted for John Banks and who now justifiably feel stabbed in the back certainly had no idea that this was what they were voting for.

Another reason why the Council feels it is necessary to sell these houses is to raise capital to help pay off debt. This seems an even weaker argument, as the idea that the Council was or is facing an emergency with its debt has been countered as being spurious by many commentators. Another argument used is that as the number of general residential units is so small there is no point having them at all. This is not logical. They are better than nothing, and need to be built on, not done away with.

Longer Term Costs

The sales of these houses will be a pyrrhic victory for those on the Council who are currently in favour of this decision. The short term gain will change into longer term costs that will have to be borne by local government and communities. These include:

„X forcing more people to live in overcrowded situations;

„X families being refused rental accommodation as children are seen as a liability;

„X an increase in health and mental health problems;

„X creating further tensions in the social fabric of society and increased costs of law and order;

„X increasing employment difficulties through not finding suitable accommodation;

„X increasing difficulties for businesses in the central CBD to attract service workers, traditionally low paid, as more are forced further from the city centre;

„X an increase in traffic problems as more people who work in the city move further out.

Local Government Bill

It is most likely that the majority of Aucklanders oppose the selling of its housing stock. With the government recently announcing that local authority housing stock will be categorised as “strategic assets’ under the Local Government Bill, it would be prudent for Auckland City to postpone the proposed, and actual, sales programme. Currently going through its last stages in parliament, this legislation will be back-dated to April 15th 2002, and it is expected to require local authorities to engage the public more extensively than Auckland City is currently doing. At the very least there needs to be a process of gauging the views and mood of the public that is much more engaging with the arguments and with the many interested parties.

Rethink

A city the size of Auckland, and with its claim to world status, should not shirk from assuming some responsibility for ensuring that its population is adequately housed. There needs to be debate amongst interested parties about a statutory role for local authorities.

Auckland’s council units need to remain in public hands, for the well-being of current tenants, and as the basis for the development of a more thought through and equitable approach to addressing the varied housing needs of all Aucklanders.

DON’T SELL OUR COUNCIL HOUSING!


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