OCHT DOESN’T HAVE ENOUGH CASH TO BUILD FASTER

https://www.facebook.com/NicolaWillisMP/posts/1075263449617564

This is the Ōtautahi Community Housing Trust. They say they could build twice as many houses immediately if the Government made one small policy change. – Nicola Willis MP – 22 March 2021

Recently I’ve been accused of not being critical enough on OCHT. Frankly I found that accusation a bit unfair and I think there’s at least one board member who will agree…

This post on Facebook by National party housing spokes person Nicola Willis, just made my head explode.

You see, I sat with trust CEO Cate Kearney and her policy lead a while back and talked about her plan to target 100 homes a year being the limit of their capacity, now I hear it could be 200 homes but they’re just lacking the funds to do it.

This does my head in because I have every idea just how much cash there is in the market right now. I could point to half a million in private capital which could translate to $10 million with bank borrowings.

I was calling Bruce Rendall, CCC’s head of property on an other issue not long after and he was very quick to point out that the council has been working on a number of other options to help the trust secure more funding (that was the day I wished I recorded calls or simply asked for more detail via email) and I suspected he’d seen the same post from Willis and had been expecting someone’s call, if not mine.

Cr Phil Mauger is on the OCHT trust board, understands property development well and got the thick end of my tongue later in the week….

I pointed out that in the 9 months that public officials have been “dithering in process” (and please note that I don’t hold Bruce to account for this, he is but one cog in a system that is the job of elected members to control the pace of) Williams Corporation, the biggest housing developer in Christchurch by numbers, have raised $65 million in the private market and delivered over 300 new builds in city (let’s put that in perspective, two kids and their mums v’s the capacity of a council with a $13 billion dollar value).

Phil pointed out that Matthew (WC) pays significantly more for his money (10%) than OCHT/CCC. He’s right! However, Matthew’s customers don’t pay much more once the build is complete and they have keys.

In my view, the trust has become greedy and expects everything for nothing (well 0.4% while the rest of us are paying 4% and Matthew is paying 10% is just about nothing). When a chief plans a menu they understand that the spuds are cheap while the meat cut will be expensive.

CCC held an engagement meeting on the updated social housing policy draft which I attended. Bruce commented in conversation that treasury simply hadn’t allocated enough funds to meet policy demands in the CHP sector (or something like that, again, must record conversations!… that’s what real reporters do!).

My view is that government has given ‘us’ as much money as they’re going to. I suspect that the banking sector is looking at how the government has been handing out ‘free money’ via the LGA fund in direct competition to its retail business to take customers from its borrowing business to build competing assets on state land while using public funds to find the customers (the 22,400 on the social housing waiting list) and is getting more than grumpy.

Frankly the more I look at the housing market and the LGA usage, it looks like a race to the bottom with the banks winning (quite happy to take some short term losses) with private market renters taking the biggest whack as they can’t get IRRS rents and soaring property values are driving their rents through the roof.

Elected members are always very quick to point out that social housing is ‘off the rates budget’ but never venture to understand if the community would like to use its ability to develop an investment opportunity such as we’ve done with power, airports, ports and other community assets. Civic housing is currently a $325m dollar asset, and elected members are pleased that it’s “off the rates budget”, guys, it should be delivering 10% ROI (in fact much more given the land assets we have).

There’s an opportunity here for the wider community, I’ve written about this before, it’s time to stop the dithering, pick up the pace, be willing to pay for the meat, not just the spuds, and work as a whole community!

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