Two pensioners say they’ve been forced out of their Arrowtown home after City Hall upped the land rent by almost 900 per cent.
Bill Swann, 78, who bought his Nairn Street home in the late ’60s, describes the increase on the annual bill from $4125 to $39,000 as “bloody ridiculous”.
He and partner Gweneth Marshall, 77, moved to Invercargill last month, saying they could no longer afford to live in the resort.
While Swann owned his digs, the land belongs to council. The current 21-year lease expired in January when it was subject to a market review.
Marshall says the situation has been shocking, stressful and heartbreaking.
Council’s property and infrastructure boss Peter Hansby says it’s worked with the pair since early 2016 to find a solution and has offered various options. He says the council was “genuinely concerned with finding a resolution that was acceptable to both parties”.
The brutal jump is put down to current market values.
Rent is assessed at six per cent of the land value at the time of lease renewal. The 614sqm section was valued at $650,000.
But Hansby also reckons “the rent has been very advantageously low for the tenant for at least the last 10 years leading up to the rent review”.
Marshall understands council is entitled to up the rent but says the price tag is extortionate.
“Not to the amount that it went to,” she says.
“I think most reasonable people would realise that too.
“It wasn’t financially viable for us to stay there.”
Swann, who grew up in the historic gold mining town, says the whole thing could have been handled better.
“I worked for council for 30 years, and considering the age of a bloke, they could have looked at the lease a little bit differently.
“I think they could have – but they said they couldn’t. To me, I think that is bullshit … They have gone to $39,000. That, in my book, is just bloody ridiculous.”
He is saddened by the outcome and questions how anyone on a pension is supposed to afford the big-bucks bill.
Council has purchased the property and details were finalised early this month.
It confirms an opportunity to buy out the land component, making it a freehold property in 2007, was not taken up by Swann.
His case was discussed at a closed council meeting in June.
Hansby says it proposed a further five years at $5000 per annum – before the jump to $39,000.
But Marshall says the process is wrong. And she worries others could find themselves in the same boat in the future.
Last month the mayoral housing taskforce proposed a Secure Home scheme, which separates the land and house.
The aim – so lower-income households can afford to buy a home while renting the land it is sited on, in perpetuity, for a “nominal” amount.
While council’s “expectation” is that it will not affect such leases in the same way, Marshall urges caution.
“It would be low to start with and then people could be in the same position we were in. I think people need to be very wary of what could happen.”
Quotable Value’s revaluation figures of the district’s 25,059 properties were released on October 9. The total capital value is $32 billion, double what it was three years ago.
The land value is $19b.
Council received 566 objections from homeowners who received new rating values in the post last month.