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Council Trying To Break Contract

Monday 10 November 2007

Cr Cathy Casey

Council Trying To Break Contract With Charitable Trust Over Affordable Housing

A contract worth $9 million signed between Auckland City Council and the New Zealand Housing Foundation to provide 100 affordable houses over the next four years is at risk because John Banks believes that local councils have no role in the provision of affordable housing. The issue is to be discussed at Thursday's full council meeting.

The contract, signed before the election in good faith by David Rankin on behalf of Auckland City Council allows the New Zealand Housing Foundation to partner with McConnell Property Ltd and others to build a minimum of 100 homes which will then be available for purchase by lower income working families unable to buy their own home at present.

Cr Cathy Casey says she is appalled that the new Council has spent ratepayers money on legal advice to try and find a way to break the contract entered into in good faith by all parties.

"Why on earth would council risk a legal challenge from the New Zealand Housing Foundation with its resultant court costs and possible compensation for breach of contract? The Foundation entered into a bona fide agreement with this council before the election, indeed the land for the first development in Denny Ave, Mt Roskill has already been purchased and the resource consent to build has already been lodged."

"The message this gives to anyone who contracts with the council is that a contract is only secure as along as the current council is in power. If the council changes, contractors cannot be sure of anything!"

"Banks' view that this council should not be involved in increasing the stock of affordable housing is not supported by the Auckland public. He sold off council's pensioner housing in the face of massive opposition. In trying to impose his will again, he is ignoring the substantial consultation that the affordable housing has already gone through to fund this project via a targeted rate which has been in place since July 2005. He is also putting ratepayers' money at risk through a costly legal battle with a small charitable trust – not to mention the gross breach of trust."

"This so-called business friendly council has already spent a lot of ratepayers' money needlessly over the logo debacle with Triangle Television. Now they intend to trample all over the New Zealand Housing Foundation. Who on earth will want to partner with Auckland City Council after this? This is a gross breach of trust."


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