TPG has recently worked with a number of Councils across the country to examine and advise on the performance of their Pensioner Housing Units (PHUs). These reviews have been undertaken within the legislative context of the current social housing environment, alongside the assessment and consideration of alternative strategies for social housing provision based on New Zealand experience.
The review of Council PHUs has been driven by a change in Government policy on the qualifying criteria and therefore funding available to subsidise the rent payable by tenants to Council. Essentially direct funding to Councils from central Government has ceased. However a not-for-profit Community Housing Provider (CHP) is entitled to the Income Related Rent Subsidiary (IRRS). Under the IRRS Government pays the difference between what a tenant is able to pay based on the tenant’s income and the market rent of the respective pensioner housing unit.
TPG has been engaged to review a number of Council PHU portfolios to advise on alternative ownership options and sources of funding that may be available to them both directly and indirectly in order to provide a future direction and ensure that this accommodation option remains within their communities. There are alternative ownership options and they all have certain merits but some are not without drawbacks. An example of an alternative option is for the Council to establish a not-for-profit CHP Trust in which Council has 49% or less stake and is operated at arm’s length from Council. Another alternative is for the entire portfolio to transfer to a fully independent CHP. These options enable the Trust to access the IRRS, continue to provide the necessary housing and provide wrap-around services to tenants. A win-win for all parties!