Christchurch social housing providers have asked the council to provide a rebate so they no longer have to pay its development contributions. They want the city council to stop charging them development fees when they build new homes.
Stuff talked to Comcare Trust chief executive Kay Fletcher who said the trust had built 60 new units for single people over the past three years and had to pay the Christchurch City Council $500,000 in development contributions.
"It adds quite significant costs to a small organisation," she told the council's social, community development and housing committee meeting on Wednesday.
Since 2002, the council has collected development contributions from developers if the project requires the council to provide new or upgraded infrastructure, such as roads, parks, or community facilities.
In 2013, the council introduced a scheme giving developers a 100 per cent development contribution rebate for residential developments in the central city.
Pam Sharpe, of the Housing Plus Charitable Foundation, said she supported the council providing a rebate to central city developers but said the council should also want the city's more vulnerable people to survive.
The foundation was spending $3.5 million building social housing units in Christchurch and had to pay out $185,000 in development contributions to the council.
She said $185,000 might seem like a drop in the bucket, but it was a lot of money to the foundation.
The committee decided to recommend the council develop a $1.5m rebate scheme for social housing developments.
A staff report said the scheme would initially last for five years and be reviewed at the end of the term or when the funding was fully allocated.
The cost of the rebate would be in revenue that was lost.
"In effect, ratepayers are paying the development contribution invoice, rather than the developer," the report said.
The $1.5m would be borrowed and repaid over 30 years, like other rates-funded debt.
The impact on rates would be about $120,000 a year in principal and interest payments, which equated to a 0.02 per cent rates increase.
The cost of the scheme has not been budgeted for and would require next year's Long Term Plan, the council's 10-year budget, to be adjusted.
Housing New Zealand, the country's biggest landlord, and the council would not be eligible for the rebate, only groups deemed as community housing providers would be.
Cr Vicki Buck asked why the council would exclude itself from the rebate.
Council policy team leader Gavin Thomas said the council had a policy that social housing would not be funded by rates and the rebate would be, which prevented the council from benefiting from it.
Cr Glenn Livingstone said the benefits outweighed the cost of the proposal because social housing was sorely needed.
More affordable homes would be built as a result of the rebate, he said.
Committee chairman Cr Phil Clearwater said there was a real need for social housing in the city and the rebate would help address that.
"What we are addressing today is a human right for people."
The report said reducing the cost of developing new social housing could encourage community housing providers to build more homes.
"There is a shortage of social and affordable rental housing for low income households in Christchurch and any additional provision will have positive benefits for residents."