DOIA20/21070598

F. Jones
[FYI request #16138 email]

Dear F. Jones

Thank you for your email on 20 July 2021 requesting the following information under the
Official Information Act 1982 (the Act):

All advice, emails and correspondence between the Ministry of Housing and Urban
Development (HUD) and Ministers - and between HUD and the Wellington City Council
- from 1 January 2021, in relation to Wellington City Council's (WCC's) social housing
portfolio and the associated Deed of Grant signed between the Crown and WCC.

On 29 July 2021, we asked you to refine your request because, as it stood, it may have
required substantial collation to respond. On 1 August 2021, you refined your request to:

All advice, briefings, papers and aides-memoire between the Ministry of Housing and
Urban Development (HUD) and Ministers - and between HUD and the Wellington City
Council  -  from  1 April 2021, in relation to Wellington City Council's (WCC's) social
housing portfolio and the associated Deed of Grant signed between the Crown and
WCC.

We have identified five documents in scope of your request which are being released to you
with some information withheld under the following sections of the Act:

Section of Act   Reason to withhold
9(2)(a)
Protect the privacy of natural persons, including that of deceased natural
persons
9(2)(ba)(i)
protect information which is subject to an obligation of confidence or which
any person has been or could be compelled to provide under the authority
of any enactment, where the making available of the information would be
likely to prejudice the supply of similar information, or information from the
same source, and it is in the public interest that such information should
continue to be supplied
9(2)(f)(iv)
Maintain the constitutional convention for the time being which protects the
confidentiality of advice tendered by Ministers of the Crown and officials
9(2)(g)(i)
maintain the effective conduct of public affairs through the free and frank
expression of opinions by or between or to Ministers of the Crown or
members of an organisation or officers and employees of any department
or organisation in the course of their duty

The email between Te Tūāpapa Kura Kāinga – Ministry of Housing and Urban Development
and the office of Hon Dr Megan Woods, Minister of Housing, included two attachments. One
of the attachments is withheld in full under section 9(2)(g)(i). The second attachment is
released with some information withheld.  Note that this attachment refers to  Calabar Road
property closing due to seismic issues, rather it was instead sold as a compulsory acquisition.

BRF20/21071028 included, as an annex, a draft letter for the Minister to send to the Mayor of
Wellington City. We have instead included the final version that was sent to the Mayor.

You are only provided with pages 4-5 of M/EB20/21040130 / 2021-3343 as the remainder of
the document is not in scope of your request. Parts of Annex 1 were in scope of your request
but are withheld under section 9(2)(g)(i).

The above information is summarised in the attached document schedule.

In terms of section 9(1) of the Act, I am satisfied that, in the circumstances, the decision to
withhold information under section 9 of the Act is not outweighed by other considerations that
render it desirable to make the information available in the public interest.

You have the right to seek an investigation and review of my response by the Ombudsman,
in accordance with section 28(3) of the Act. The relevant details can be found on the
Ombudsman’s website www.ombudsman.parliament.nz.

As part of our ongoing commitment to openness and transparency, the Ministry proactively
releases information and documents that may be of interest to the public. As such, this
response, with your personal details removed, may be published on our website.

Yours sincerely

Naomi Stephen-Smith
Manager Market and Supply Response

Annex 1: Document schedule

Tracking
Date
Title
Sections of
number
the Act
applied
BRF20/21040927  4 May 2021  Wellington City Council – Council
9(2)(a)
Consideration of Options for its City Housing  9(2)(f)(iv)
Portfolio
M/EB20/21040130 5 May 2021  Meeting with the Mayor of Wellington, Andy  9(2)(ba)(i)
/ 2021-3343
Foster, and Barbara McKerrow, Chief
9(2)(f)(iv)
Executive of Wellington City Council
9(2)(g)(i)
Out of scope
AMI20/21050527  27 May 2021 Wellington City Council: Ministers’ Meeting
9(2)(a)
on City Housing 31 May 2021
9(2)(f)(iv)
IREQ20/21060972 16-24 June  Email: Wellington City Council: Response to  9(2)(a)
2021
Request for Information on WCC Housing
9(2)(f)(iv)
Stock and CHP Establishment Timing,
9(2)(g)(i)
including attachment 2

Attachment 1 withheld in full under 9(2)(g)(i)
BRF20/21071028  5 July 2021  Response to Wellington City Council’s letter  9(2)(a)
and further work on City Housing’s financial  9(2)(f)(iv)
challenges

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Act
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Released
Information
Official

Briefing
Wellington City Council – Council Consideration of Options for
its City Housing Portfolio
For:
Hon Dr Megan Woods, Minister of Housing
Date:
4 May 2021
Security level:
In Confidence
Priority:
Medium
Report number: BRF20/21040927
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Purpose
1.
The purpose of this briefing is to provide an update on Wel ington City Council’s (WCC’s) city
housing. On 6 May 2021, WCC will publish a paper regarding financial sustainability
challenges for its city housing portfolio. The council paper wil  then be considered by the
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Strategy & Policy Committee on 13 May 2021.
Executive summary
2.
WCC faces significant financial sustainability challenges in respect of its city housing
under
portfolio.
3.
On 6 May 2021, WCC will publish a paper to the Strategy & Policy Committee on options to
address financial sustainability challenges for its city housing portfolio. The Strategy & Policy
Committee will consider the paper on 13 May 2021. Alongside this WCC process, the
Minister of Housing and Minister of Building and Construction are meeting the Mayor and
Chief Executive of WCC on 10 May 2021. The purpose of the meeting is to discuss WCC’s
Briefing to Incoming Ministers.
4.
There is the potential WCC will seek Crown support for its city housing. The Minister of
Housing may need to consider how to respond to any approach from WCC for Crown
support.
5.
s 9(2)(f)(iv)
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6.
Official
7.
[In Confidence – BRF20/21040927]
2

s 9(2)(f)(iv)
8.
9.
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Recommended actions
10. It is recommended that you:
1.
Note Wellington City Council faces funding challenges for
Act Noted
operating its city housing portfolio and financing challenges for
its city housing upgrade programme
2.
Note, on 13 May 2021, Wellington City Council’s Strategy &
Noted
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Policy Committee will consider options to address financial
sustainability challenges for its city housing portfolio
3.
s 9(2)(f)(iv)

Noted

4.
Note HUD is providing advice on options to support council
Noted
housing across New Zealand, s 9(2)(f)(iv)

in late June
2021
5.
Refer a copy of this briefing to the Minister of Finance and
Agree / Disagree
Associate Minister of Housing (Hon Poto Williams) for their
information
Information
6.
Released
Indicate if the Minister of Housing wishes to meet with HUD
Yes / No
officials to discuss Wel ington City Council’s city housing
portfolio
Naomi Stephen-Smith
Hon Dr Megan Woods
Manager, Market and Supply
Minister of Housing
Official
Responses
..... / ...... / ......
..... / ...... / ......
04 05 2021
[In Confidence – BRF20/21040927]
3

Background
11. WCC has been providing city housing since the 1950s and holds more than 1,900 city
housing units. WCC provides city housing for 3,000-4,000 tenants at any time. Around 15
percent of city housing tenants are children and around 10 percent are aged 65 or older.
WCC’s city housing rents are set at 70 percent of market rent (although people with higher
levels of assets pay 100 percent of market rent). WCC has indicated that a significant
majority of its tenants would qualify for Income-Related Rent if they were public housing
tenants.
12. In 2007, WCC signed a Deed of Grant with the Crown for the upgrade of its city housing
stock to ensure that its portfolio is safe, secure and of a good standard for modern living.
Under the Deed of Grant the Crown provided a $220m Crown Grant and WCC entered into
obligations regarding investment and management for its city housing.
13. On 29 January 2021, HUD provided the Minister of Housing with a briefing on WCC’s city
housing deed of grant annual report [BRF20/21010846]. s 9(2)(f)(iv)

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14. On 23 March 2021, the City Housing Team at WCC met with council ors to discuss the
chal enges facing the city housing portfolio. Fol owing that meeting, council officers have
undertaken further work on options for the city housing portfolio.
Act
WCC’s Strategy & Policy Committee will consider options for its city housing on 13
May 2021
15. On 6 May 2021, WCC will publish a paper regarding financial sustainability challenges for its
city housing portfolio. The council paper will then be considered by the Strategy & Policy
under
Committee on 13 May 2021.
16. The council paper will set out options to address financial sustainability challenges. Some of
the options involve seeking financial support from the Crown and/or Crown agreement to
amend obligations under the Deed of Grant.
17. In addition, the Minister of Housing and Minister of Building and Construction are meeting the
Mayor and Chief Executive of WCC on 10 May. The purpose of the meeting is to discuss
WCC’s Briefing to Incoming Ministers. HUD is working with the Ministry of Business,
Innovation and Employment (MBIE) to provide a meeting note for this event, which will be
consistent with this briefing.
WCC has obligations under the 2007 Deed of Grant with the Crown
18. The Deed of Grant can be conceptualised as three decade-long tranches. The first tranche,
which exhausted the Crown Grant,1 was focused on the first half of the Housing Upgrade
Information
Programme and was completed in October 2018. The second tranche, which was due to
begin in 2021 is focused on the second half of the Housing Upgrade Programme and was to
Released
be funded through the Council’s $180 million contribution. The delay between these phases
was planned so that WCC was able to accumulate the funds it needed. WCC is yet to seek
approval for the second phase work-programme, and has not begun work.2 The final tranche
requires WCC to continue its obligation to maintain its city housing stock at the same level
(as when the deed was signed) until at least 2037.

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1 Phase one of the Housing Upgrade Programme cost more than initially anticipated ($220m) and resulted in WCC
contributing $17m due to an actual upgrade cost of $237m. WCC is required to fund the remainder of the upgrade
programme (Phase Two), which is scheduled to run from 2021 to 2028
2 WCC is still carrying out ongoing Maintenance including Healthy Homes Compliance.
[In Confidence – BRF20/21040927]
4

19. HUD took over the monitor role for the Crown’s Grant in late 2018 from MBIE. The monitor
role is to ensure that WCC complies with the terms and conditions of the Crown Grant, being
primarily:
a.
Maintain city housing levels of approx. 2300 units until June 2037.
b.
Upgrade the housing portfolio by contributing WCC’s $180 million share to the future
upgrade programme.
c.
Reinvest/ring-fence all rental income from the housing portfolio and the net sales
proceeds from all disposals.
d.
No debt raising against the housing portfolio.3
s 9(2)(f)(iv)
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3 Under clause 6(g) of the Deed, WCC can obtain new debt for upgrading the housing portfolio and reinvest the income
to meet the costs of retiring such debt and related interest costs.
[In Confidence – BRF20/21040927]
5

s 9(2)(f)(iv)
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s 9(2)(f)(iv)
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Consultation
46. The fol owing agencies have been consulted on this briefing: the Treasury, Ministry of Social
Development, Department of Internal Affairs, Kāinga Ora – Homes and Communities, and
Crown Infrastructure Partners.
Next steps
47. The next steps are as follows.
a.
6 May – WCC will publish the paper to the Strategy & Policy Committee on WCC city
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housing.
b.
10 May – The Minister of Housing and Minister of Building and Construction are
meeting the Mayor and Chief Executive of WCC. The purpose of the meeting is to
discuss WCC’s Briefing to Incoming Ministers.
[In Confidence – BRF20/21040927]
8

c.
13 May – WCC’s Strategy & Policy Committee will consider the paper on WCC city
housing.
d.
Late June 2021 – HUD will provide advice on options to support council housing across
New Zealand.
Annexes
48. Annex A: Estimated stock of council-owned housing
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[In Confidence – BRF20/21040927]
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solution. Instead, officers recommend exploring an off-balance sheet solution (e.g. a Special
Purpose Vehicle).
s 9(2)(f)(iv)
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Information
Annexes
20. Annex A: Options identified by WCC officers
21. s 9(2)(f)(iv)
22.

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In Confidence – AMI20/21050527
4

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s 9(2)(f)(iv)
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From:
Jo Murray
To:
Amy Harrison - Parliament
Cc:
Ministerial Services; Bronwyn Hollingsworth
Subject:
Wellington City Council: Response to Request for Information on WCC Housing Stock and CHP
Establishment Timing
Date:
Tuesday, 15 June 2021 5:03:20 PM
Attachments:
200614 HUD Request For Information (Stock Analysis).xlsx
image001.png
image003.png
image005.png
image007.jpg
210615 WCC - Key Observations from the Housing Stock Data.docx
image002.png
image004.png
image006.png
image008.jpg
Kia ora Amy,

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On 31 May 2021, following a meeting of Ministers Woods, Williams and Robertson on
Wellington City Council you requested:

a detailed analysis of Wellington City Council’s housing stock including such features as age,
condition, cost to repair etc;
Act
advice on the process and timeframe to register as a community housing provider.

Wellington City Council: Housing Stock Analysis

under
Summary
Attached is (1) a detailed housing stock analysis prepared by Wellington City Council staff (in
excel) and (2) a set of key observations prepared by HUD.
Additional Commentary
s 9(2)(f)(iv)
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Establishing a Registered Community Housing Provider

Summary
s 9(2)(f)(iv)

Background

The formal process for becoming a registered community housing provider and Class 1 Social
Landlord is straightforward and can take as little as 3-4 months provided the material lodged by
the applicant is complete and demonstrates that the applicant can meet the Performance
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Standards set by the Community Housing Regulatory Authority (CHRA).

On application lodgement, CHRA will conduct a high level review of the application and get back
to the applicant within 30 Business Days if any glaring omissions are noted, then it will conduct a
thorough review of the application against the Performance Standards, speak with the applicant
Act
and seek further information (if needed) and then issue a decision letter – in as little as 60 to 90
days.

under
The Performance Standards cover the applicant entity structure, governance, management,
financial viability, tenancy management, and property and asset management. These can be
found at www.chra.hud.govt.nz.

What tends to take the most time is the process to prepare for application lodgement. Where
an intending applicant is starting from scratch it can in some cases take a couple of years to
decide on their entity structure, what housing assets will sit within the entity, how the entity will
be financed, what IT systems it will use, who it will contract with for reactive maintenance and
lifecycle works, to write up compliant policies (which can be adapted from existing City Housing
policies), to recruit staff, to find an office location and the like. Te Ahuru Mowai (the Ngati Toa
CHP in Porirua) managed the process in under a year, with the assistance of existing CHPs and a
clear understanding from the outset that it would lease the housing assets from Kainga Ora.

Information
s 9(2)(f)(iv)Released

Official

General

Please let me know if you have any questions regarding the above information or would like us
to answer any further questions.

Kind regards, Jo

Jo Murray (she/her/they)
Housing Supply Response and Partnerships
[email address] | Mobile: s 9(2)(a)
www.hud.govt.nz | Level 6, 7 Waterloo Quay, Wellington

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Key Observations from the Housing Stock Data provided
by Wellington City Council
Topic
Comment
Housing Stock
x The housing stock is comprised of 49 operating complexes
(containing 1,821 units) and 100 stand-alone homes
x 3 complexes have been closed in recent years (the
Arlington Flats – due to seismic issues and Calabar Road
in Miramar)
x The Harrison St re-development is underway; with re-
development also proposed for Nairn Street, Maupuia
Road, Tauhinu Road and Lyndhurst Road in Tawa as well
1982
x
the
10 complexes (containing approximately 87 units) and
100 standalone units are proposed for divestment – these
are all currently tenanted
Location
x The majority of the stock is located in the southern
suburbs of Kilbirnie, Miramar, Newtown, Berhampore,
Brooklyn and Mt Cook
Act
Age
x The majority of the stock was built in the 1960s to 80s
x Older stock from the 1920s to 1950s has mostly been
divested or is proposed for divestment
x 158 units have been built since 2011 (104 at Te Mara –
under
ǁŚŝĐŚ ĂƌĞ ůĞĂƐĞĚ ƚŽ <ĈŝŶŐĂ KƌĂͿ
Healthy Homes Upgrades (note
x The ceiling, floor and wall insulation requirements have
these come into effect on the
been met across the entire portfolio
earlier of a new tenancy after 1
x 84-86% of the portfolio is compliant with the moisture
July 2021 or July 2024)
ingress and draught stopping requirements
x 58% of the portfolio is compliant with the ventilation
requirements. Primarily extract fans need to be piped
and installed in the remaining properties to achieve full
compliance
x The cost estimate for doing the remaining work to
achieve full compliance is $17.9m
x s 9(2)(g)(i)
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Information
Deed of Grant Compliance
x Phase 1 of the Housing Upgrade Programme is complete;
Phase 2 was due to commence in 2021 – and needs to be
completed for WCC to meet its obligations under the
Deed. s 9(2)(f)(iv)
Amount spent on Phase 1 of the
x $209m (inc GST) + programme costs
Housing Upgrade Programme
x WCC has indicated this amounts to $220m in total – being
the Crown contribution under the Deed for both Phases 1
and 2 of the Housing Upgrade Programme
Official

Cost estimate for Phase 2 of the
x $285m (inc GST) – being $266.8m as the capital works
Housing Upgrade Programme
programme; and $17.9m on Healthy Homes compliance
x The seismic upgrade proportion is costed at $69m –
although much of this cost has been generated through a
desktop exercise.
x Notwithstanding the allocation for seismic upgrade
works, all Housing Stock in operation meets the current
NBS requirements
x s 9(2)(f)(iv)

2008-2020 Reactive
x $29.8m
Maintenance/General
x The reactive maintenance spend is not consistent year on
1982
Maintenance and Repair
year – it ranges between $2.5m and $6.5m; with an
the
Expenditure (across the Housing
average of $3.65m per year
Stock)
x The age of the property does not seem to directly
correlate with the level of reactive maintenance required;
indicating that there is a tenant component to the cost.
2008-2020 Lifecycle Asset
x $8.7m – (note most of the capital upgrade work was
Act
Maintenance/Renewals
incorporated in the Phase 1 expenditure)
Expenditure (across the Housing
x As expected, there is a more apparent link in the
Stock)
expenditure here to the age of the relevant property
Lease status
x WCC leases 168 units to <ĈŝŶŐĂ KƌĂ͕ KƌĂŶŐĂ dĂŵĂƌŝŬŝ͕ ĂŶĚ
under
to several CHPs (Emerge Aotearoa, Salvation Army, Kahui
Tu Kaha, Kahungunu Whanau Services, and Dwell). 104 at
Te DĈƌĂ ĂƌĞ ƵŶĚĞƌ ůŽŶŐ ƚĞƌŵ ůĞĂƐĞ ƚŽ <ĈŝŶŐĂ KƌĂ͘

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s 9(2)(f)(iv)
Naomi Stephen-Smith
Hon Dr Megan Woods
Manager, Market and Supply
Minister of Housing
Responses
..... / ...... / ......
..... / ...... / ......
05 07 2021
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In Confidence – BRF20/21071028
3

Background
3.
On 24 June, WCC wrote to the Ministers of Housing and Finance seeking access to the
IRRS for City Housing (attached as Annex B). City Housing is the division within WCC that
manages WCC’s social housing portfolio. A draft letter of reply is attached as Annex A.
4.
WCC also wishes to negotiate changes to the 2008 Deed of Grant between WCC and the
Crown. WCC has requested a meeting to discuss the points raised in its letter.
WCC’s City Housing challenges are primarily driven by the Council’s financial
management decisions
5.
Under the Deed of Grant, the Crown provided a $220m Crown grant towards a 20-year
upgrade programme. The Crown’s funding was spent on Phase One of the Housing Upgrade
Programme. WCC agreed to fund Phase Two of the Housing Upgrade Programme at an
estimated cost of $180m. WCC also committed to continue providing social housing until
2037.
the  1982
6.
WCC is however facing chal enges meeting its obligations under the Deed of Grant. WCC
has stated that City Housing will face annual operating deficits growing from $7m in 2021/22
to $49m in 2030/31, and $446m of capital investment is required over the next decade.

s 9(2)(f)(iv)

7.

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8.
On 15 June, HUD provided information to the Ministers of Housing and Finance, and the
Associate Minister of Housing (Public Housing), on WCC’s housing stock and the process for
WCC to establish a Community Housing Provider (CHP) [IREQ20/21060972]. s 9(2)(f)(iv)


9.
On 1 July, HUD provided advice on potential support for councils to deliver housing
[BRF20/21060994 refers]. s 9(2)(f)(iv)

Information
10.
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1

s 9(2)(f)(iv)
In Confidence – BRF20/21071028
4

s 9(2)(f)(iv)
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s 9(2)(f)(iv)
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Next steps
20. A draft letter of reply is attached as Annex A.
21. Mayor Andy Foster has requested an opportunity to meet to discuss the points raised in the
letter to the Ministers of Housing and Finance. s 9(2)(f)(iv)

Official
2 HUD’s legal advice is that providing IRRS funding directly to WCC would require amending the Public and Community
Housing Management Act 1992 (PACHMA) and/or its Regulations. Amending PACHMA will likely take at least 12-18
months. Replicating IRRS-like funding outside of the PACHMA would create a risk of legal challenge. Therefore, further
HUD advice could explore alternatives for comparable funding support and the associated risks.
In Confidence – BRF20/21071028
6

s 9(2)(f)(iv)

22.

Annexes
23. Annex A: Draft letter of reply to WCC.
24. Annex B: Letter from WCC requesting access to the IRRS.

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In Confidence – BRF20/21071028
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Annex A: Draft letter of reply to WCC

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In Confidence – BRF20/21071028
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Annex B: Letter from WCC requesting access to the IRRS

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In Confidence – BRF20/21071028
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Document Outline