File ref: IRC-4656
2 June 2023
Chris McCashin
[FYI request #22316 email]
Kia ora Chris,
Te Kāinga
Thank you for your request made under the Local Government Official Information and Meetings
Act 1987 (the Act), received on 29 March 2023. You requested the fol owing information:
1. The referendum, survey, sample size, options, alternatives, any and all information that
confirms Wel ingtonians want more housing options and how Wel ington City Council
determine that the majority of Wel ingtonians want more housing and the options
Wellington City Council have to deliver more housing and the proposed costs
2. Provide the lead time of these buildings - when were the long-term leases signed, WCC
started paying rent versus when these could be delivered and a rental return
3. Please provide current occupancy of these units as wel
4. The feasibility, analysis, reporting associated with the three Te Kainga rental buildings that
determine these projects to be "cost neutral" including but not limited to long term lease
(including lease document), CAPEX / cost share, forecast rents, vacancy, management
costs, administration costs, additional staff at WCC, maintenance costs, OPEX,
responsibility of rates.
5. Any and al reporting, recommendations that show these projects to be "cost neutral",
completed internally and externally.
Wellington City Council has partly granted
your request for information.
Below is the document that falls in scope of your request and my decision to release the
document.
Item
Document name/description
Decision
Appendix 1 Housing and Business Land Capacity Assessment
Released
(HBA)
Background Information
In 2016 the Mayor of Wel ington City Council (Justin Lester) established a Housing Taskforce to
tackle the escalating issue of housing affordability in the Capital. This taskforce resulted in the
Wel ington Housing Strategy. The strategy is based on the vision that ‘All Wellingtonians are well-
housed’. A component of achieving this vision is ensuring that more homes in Wellington are
affordable.
The Te Kāinga programme originated from the
Report of the Mayor's Housing Taskforce. One of
those actions was to “Actively work with Community Housing Providers, developers, and builders
to unlock a pipeline of affordable housing (new/conversions) development. This may include
Refurbish and retrofit existing inner-city buildings to provide additional affordable housing units
for key worker groups, certain income brackets and those who are entering the housing market
for the first time.” (Page 6).
On 7 December 2017, the Council unanimously voted in favour of a draft 10-year Housing Strategy
during a
City Strategy Committee meeting which agreed to develop a housing strategy, with a key
priority being central business district building to apartment conversions.
In June 2018 the
City Strategy Committee approved the Wel ington City Council Housing Strategy
(the Strategy). The Strategy had been developed based on extensive engagement and consultation
on housing issues in Wel ington. The Strategy sets a long-term vision of “All Wellingtonians well-
housed”. Supporting the Housing Strategy is the Wel ington Housing Affordability Model
(WHAM).
Question 1
Under the
National Policy Statement on Urban Development the Council is required to prepare a
Housing and Business Land Capacity Assessment (HBA) to determine if there is sufficient
development capacity to meet the housing demand in the region. The HBA assesses the demand
for housing and business space, and then compares that to what is enabled in the District Plan,
‘Appendix 1’ captures this HBA.
Further to this, a copy of the ‘Consultation Document’ against the Councils 2018-28 Long Term
Plan can be found
here, from page 21 provides information around how we consulted regarding
housing with detailed two options Page 9 of
volume 1 of the Wel ington City Council’s Long-term
Plan 2018–28 confirming 81 percent of submitters supported the housing preferred option 1.
More information can be foun
d here.
Question 2
For each development, an Agreement to Lease (ATL) was signed prior to any building work being
completed. Leases commenced once building works were complete and the buildings able to be
occupied.
• Aroha (197 Willis St) – ATL signed on 22 July 2019, lease commenced 5 March 2021
• Te Pu (180 Willis St) – ATL signed 8 December 2021, lease commenced 16 March 2023.
• Te Aka (203 Willis St) – ATL signed 16 September 2021, lease commenced 1 June 2022
• Te Aka (203 Willis St) – Variation to the ATL to include 6 accessible ground level
apartments, signed 21 December 2022 and the lease commenced 15 March 2023.
Wellington City Council | 2 of 5
Question 3
The table below provides a breakdown of each Te Kāinga property confirming location, the
number of apartments in each building and current occupancy percentage as of May 2023:
Max
Building
number of Occupancy %
Apartments
Aroha
52
92%
Occupied
197 Willis Street
Te Aka
48
94%
Occupied
203 Wills Street
Te Aka – Accessible
units
6
0% Occupied
203 Willis St
Te Pu
74
60%
Occupied
180 Willis Street
Please note:
• Te Pu became available on 16 March 2023 and given its recent availability and the larger
number of tenants this location can house in comparison to Aroha and Te Aka, these
apartments are not yet filled. 10 application offers have been accepted; however, these
tenants have not yet moved in and therefore are not included in the occupancy statistics
above.
Questions 4 and 5
The feasibility, analysis, reporting associated with the three Te Kainga rental buildings that
determine these projects to be "cost neutral" including but not limited to long term lease (including
lease document), CAPEX / cost share, forecast rents, vacancy, management costs, administration
costs, additional staff at WCC, maintenance costs, OPEX, responsibility of rates.
Any and all reporting, recommendations that show these projects to be "cost neutral", completed
internally and externally.
We have assessed these questions that relate to commercial documentation requested, which
details the rent paid to the building owner and responsibility for particular costs, and are refusing
this part of your request under section 7(2)(b)(i ) of the Act as the release of information in scope
of this request would likely unreasonably prejudice the position of Te Kāinga’s commercial
landlord.
However, consideration has been made when balancing public interest and below is a summarised
methodology of how each project is assessed;
Income Received
Comment
Rent Received
Rent received from individual tenancy agreements
Management Fee
Usual y percentage of rent
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Tenant Liability
Allowance made
Less Expenses
Headlease Cost
Reviewed periodically based on lease document
Less Operating Expenses
Set up costs
To account for initial set up costs in Y1
Tenancy management
Cost of providing tenancy management
Utilities (electricity, water etc) Where applicable, based on lease documentation
Maintenance
Where applicable, based on lease documentation
Legal
As required, budgeted
Marketing
As required, budgeted
Contingency/Other
Contingency and other ancil ary budgeted costs
Profit/Deficit
Targeted to be net zero, I.e., money in equals money out
• Council rents entire floors of buildings (headlease) and sublets those apartments to the Te
Kāinga tenants (rent received). In addition to headlease rent, the Council’s outgoings may
include tenancy management, some operating costs, debts/damages that are not
recovered and other initially costs such as marketing, legal costs and contingency.
• As it is a long-term programme, there will be months/years where outgoings exceed
income, and vice versa, however the objective is that over the life of the lease, the
programme is net neutral. The rental settings are regularly reviewed and can be adjusted
as required to respond to the market and performance of the buildings.
• The details of the feasibility, analysis and reporting cannot be released without breaching
the commercial confidentiality of the building owners and affecting Council’s negotiations
on other buildings.
• To date, the programme has not been subsidised rates or debt.
Request
Response
Long term lease (including lease document)
Refused under section 7(2)(b)(ii) of the Act.
CAPEX / cost share
There is no capital expenditure budget. Capital
expenses are paid for by the landlord.
Forecast rents
Forecast rents wil be dependent on factors
that influence the headlease amount to be
paid, occupancy rates, and affordability.
Rents are assessed annually.
Vacancy
Occupancy rates are provided above. The
models and forecasts assume an average level
of vacancy, including higher vacancies at the
beginning of the lease whilst the properties are
fil ed, and when refurbishments of the
apartments are undertaken in the future.
Management costs and administration costs
A management fee is paid by the landlord as
part of the lease agreement that covers the
Council’s management and administration
costs.
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Additional staff at WCC
There are no additional staff for the Te Kāinga
programme that are not covered by the
management fee received.
Opex and responsibility of rates
There is not any operational expenditure
budgeted for the operation of the programme
outside of the income received.
Any and al reporting, recommendations that
Refused section 7(2)(b)(ii) of the Act.
show these projects to be "cost neutral",
No reporting or recommendations can be
completed internally and externally.
released without including the details of the
arrangements. For example, we cannot show
any profit/loss detail without showing the
headlease amounts and other aspects of the
agreement.
Right of review
If you are not satisfied with the Council’s response, you may request the Office of the Ombudsman
to investigate the Council’s decision. Further information is available on the Ombudsman website,
www.ombudsman.parliament.nz.
Please note, we may proactively release our response to your request with your personal
information removed.
Thank you again for your request, if you have any questions, please feel free to contact me.
Kind regards
Ollie Marchant
Official Information
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