Are We Critical Enough of OCHT?

OCHT is one of 57 government credited CHP’s, born from the Christchurch City Council’s housing unit about 5 years ago. It was created, as CCC’s Bruce Rendall explains, so that housing tenants could access the government IRRS. Councils can’t access IRRS. Following the earthquakes the state of the councils social housing was very poor. While there was an insurance payout, CCC was under insured.

In my view, the arrangement of the OCHT trust is paper thin. CCC’s own legal council has been seen to caution the mayor about the abstraction the trust needs to have from CCC, and I suggest that caution is driven by an awareness that with a stroke of the pen, government could rule that the trust is nothing but the council attempting to skirt government rules, it’s an issue that has concerned me for a while.

For these reasons, I’ve been focusing on a few things. I’ve built relationships with CCC and OCHT staff in an attempt to best understand the whole space as I can. I’ve joined with some friends to form the framework to create a competing CHP and engaged with council about a level of partnering once the trust has CHP status (assuming we progress with the plan to completion). I’ve also taken care not to be to critical of OCHT, CCC or KO.

Along the way I’ve been accused of favour by not using our social media elements to promote media articles about the trust that may be seen in a dim light. Those folk are correct, there is favour in this domain.

https://www.stuff.co.nz/national/118655632/73yearold-faces-long-wait-for-social-housing-in-christchurch

This media article highlights my greatest concern. IRRS means that tenants only pay 25% of what they earn. In the current market it means that people in social housing are much better off than those in the private market, and for the most part, they know it.

I well understand that there are some who in social housing who are very unhappy right now, frankly I think they need some perspective.

https://www.tenancy.govt.nz/healthy-homes/healthy-homes-compliance-timeframes/

“From 1 July 2023

  • All Kāinga Ora (formerly Housing New Zealand) houses and registered Community Housing Provider houses must comply with the healthy homes standards.”

CCC delivered $16 million dollars to fund delivery of heating and ventilation.

https://www.stuff.co.nz/national/health/118603572/christchurchs-social-housing-upgrades-off-to-slow-start

Stephen and I followed the progress of this project. We quietly raised our concerns about it being delayed long before media started writing articles. We expressed many concerns.

The reality is that the project got delivered well ahead of any government requirements.

https://www.stuff.co.nz/timaru-herald/news/300249053/tenants-win-3000-from-landlord-for-failing-to-provide-insulation-or-repairs

For some perspective, readers should consider where the private market is at. It’s currently in the ‘stick mode’ of ‘carrot and stick’.

YOUR LANDLORD OR YOUR MUMMY?

https://www.stuff.co.nz/national/124211788/landlord-using-security-guards-to-defuse-tension-at-christchurch-flat-complex

A problem with social housing, and not the only one, is that they now attract social problems. Problems outlines in this article are being addressed by the trust, however in my view it’s very unclear who’s job it really is to deal with the ‘mummy and daddy’ issues.

The trusts job is to provide housing, and they do that above the required standards. However they also get involved in complex social issues dealing with people that frankly, no one wants to deal with.

https://chra.hud.govt.nz/about-chra/performance-standards-and-guidelines/

For perspective, here’s a link that details the requirements for a CHP (the trust is a CHP). It has conditions that go well beyond those on a normal landlord, who don’t have to become ‘camp mum’. It’s these requirements that drive the level of involvement OCHT has with its community.

At the same time, a large organization with a significant market influence also has to make sure it doesn’t fall fowl of many other laws, including but not limited to commerce legislation.

https://comcom.govt.nz/business/avoiding-anti-competitive-behaviour/taking-advantage-of-market-power

Considering all these things, don’t let my ‘apparent lack of action’ fool you. My global reach is extensive and I have every idea how to tip the whole woka over, but I’m careful not to push at anyone in social housing to hard, I don’t feel it would be helpful for the social housing community.

In the face of personal criticism I reached out to CCC’s Bruce Rendall, his full response is below, and I thank him for taking time to respond in such detail and quickly. He drafted this response within a couple of hours of my phone call.

Bruce touched on a number of elements that I have covered, less so a number of other projects I know he’s been working on as that level of detail really is academic. Over all, I personally endorse his and his teams efforts, they’re getting more done than I am and way more than many others in this country who have a lot more resources and should be doing much better.

WHY WE BUILT THIS RESOURCE

Before I close, I’d like to remind readers why Stephen and I created this platform. CCC published lots of information about social housing around the last election for candidates. It’s a $325 million dollar asset which is very hard to get your head around. We created this site to share our learning’s and help inform elected members. Stephen’s major interest has been in improving his lot and that of the community around him, and frankly he’s done an amazing job. I don’t normally lobby on projects this small. My historic ‘lobby interests’ have been centered around multi billion dollar telecommunications projects. I personally have just about no interest in childish community squabbles.

Cheers Don.

Bruce writes….

“Don

Further to our discussions, I wanted to put down in writing some quick thoughts about where we are now with the Council’s social housing portfolio.  To get there we need to think about the fundamental problem and we were in 2014/15 when decisions were made about the new delivery model.

“Social” housing is subsidised housing.  More information can be found in our Housing Policy (https://www.ccc.govt.nz/the-council/plans-strategies-policies-and-bylaws/policies/strengthening-communities-policies/housing-policy/).  The fundamental problem with Council’s portfolio (and much of the rest of local government social housing in NZ) is the subsidy or rather lack of subsidy, which has resulted in under investment in the assets. 

Local authorities are not eligible for the Government’s landlord subsides (the income related rent subsidy or IRRS), most do not use rates funding for subsidising housing, and most keep rents at a below market level for affordability reasons.   Additionally there has been a tendency to use rental returns for additional support services and growth, at the expense of maintenance and renewals.  Ultimately the lack of funds has led to deterioration in the quality of the housing. 

Various local authorities have recognised this at different times and have chosen different paths to try and address this including exiting provision.  Christchurch recognised that it needed to do something in 2014 /15, which lead to the formation of OCHT.  OCHT is eligible for the IRRS, and has progressively transitioned a portion of the portfolio from unsubsidised to subsidised.   The effect of this is more revenue, which is directed towards maintenance (eg exterior painting, major corrective repairs etc), renewals (eg roof replacements; storm water replacements) and legislated required upgrades (eg insulation, heat pumps etc).  Once we’ve lifted the standard of the portfolio to a better level, then we can start accumulating funds for replacing units.

Since 2016 we’ve installed heat pumps in all units (there are a very small number where we have multiple access refusals and have not been able to install heat pumps with agreement).  We’ve installed and upgraded insulation where we can, always with the aim of exceeding standards where ever possible.  Works continue to improve the warmth and dryness of units through draught stopping and curtain upgrades.  Painting programmes, which had been put on hold while we delivered our earthquake repair work, have restarted.  We don’t just paint for aesthetics, although we get feedback from tenants that making sure the home looks better has a positive impact on how they feel.  Painting also helps extend the life of the building and helps keep the property dry.

We’re also looking at doing things differently.  OCHT have already made savings in our reactive maintenance (ie repairs when things are broken), and we are jointly  about to make changes to how we deliver scheduled (eg fire system inspections), planned maintenance (eg reactive or infrequent maintenance where we can plan when it is delivered), and renewal works.  Our modelling suggests further savings.  All savings and increased revenue must be used to lift the standard of the portfolio to an acceptable point.

The feedback from the tenant satisfaction surveys shows that this extra investment is having benefits.  We’re also in the process of developing better condition information across the portfolio, which will help us track the quality of units.

While I’m positive, I do know that we are on a journey and there is a long way to go.  We know that there are complexes that have reached the end of the useful life and we should replace them, but we haven’t accumulated enough money to do this yet. 

We’re using a variety of techniques  to address this issue.  We have closed some units where it is too risky for tenants and spending money to lift standards would be a waste.  This approach is used sparingly because we are very aware of the growing waiting list for public housing.  Other site we do works to ensure that the assets are safe and meet legal requirements, but try to limit other expenditure.   Together with OCHT we look at ways to fund and finance new builds, which has resulted in 159 units competed or in construction, and another minimum 72 in planning.

I hope that this gives you some comfort that we are heading in the right direction to improve our social housing

Bruce

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