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Council Rent Hike Based on Flawed Calculations

Council Rent Hike Based on Flawed Calculations

The Coalition for Fair Rents is calling upon Christchurch City Council to revisit its recent decision to raise its social housing rentals by 24%, saying the information on which they based their decision was not properly calculated.

“The councillors relied on figures which indicated that after the increase most rentals would still meet the measure of affordability that Council uses, which was 30% or less of a tenant’s gross income”, said Coalition spokesperson Sharon Torstonson. These figures were calculated by deducting the Accommodation Supplement from the full rent, then seeing what percentage the remaining rental was of the tenant’s income.

The affordability measure is defined by the Ministry of Social Development, which also says how it is to be calculated. “As Council is explicitly using the Ministry’s definition it must also use the formula, which says that the Accommodation Supplement is to be included as income. Using the correct formula, almost all of the single tenants will be paying rents that exceed the affordability measure and some will be paying around 50% of their income”, said Sharon Torstonson.

Decisions that Council makes have to be consistent with their plans and strategies. The Council’s Social Housing Strategy has a commitment to the provision of affordable housing. If these rent increases go ahead, Council will no longer be complying with its own strategy.


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