Christchurch City Council loan to developer would rip off
26 NOVEMBER 2019
The Christchurch City Council must reject Ōtautahi Urban Guild's $450,000 ratepayer-funded loan request for its housing development, says the New Zealand Taxpayers' Union.
Taxpayers' Union spokesperson Islay Aitchison says: "Capital for property development is expensive because it's a high-risk area of investment. A low-interest or interest-free loan is a major subsidy from ratepayers."
"The Guild is promising the Council that its sustainable homes will be up to 20 per cent cheaper than those from the private sector. If that's the case, any sensible bank would anticipate that the houses will sell quickly and loan the Guild funding. There'd be no need to gamble with ratepayer money."
"In fact, Council staff are actually anticipating that a loan would ultimately need to be written off. The Council shouldn't see that as a reason to hand one over."
"Not only is this proposal a rip-off for ratepayers, subsidising trendy projects like this undermines the private sector's ability to compete. The Council should welcome those willing to risk their own money, who are better equipped to do a good job.
"The Guild only asked for this funding because local government subsidies for private developments are becoming more and more normalised. The Council needs to send a strong message and say no."