House trust is shut out

SHARE

Queenstown families helped into home ownership via an affordable housing trust have been branded too rich for charity. 

In a blow to the Queenstown Lakes Community Housing Trust, the Charities Com-mission yesterday removed its charitable status – saddling QLCHT with $500,000 in tax annually, which chair David Cole has warned could eventually threaten its existence. 

The reasons for the commission’s decision can now be revealed. It rules many of the 32 beneficiary families in QLCHT’s “shared ownership programme” aren’t poor enough for the trust to legally operate as a charity.
Of QLCHT families: 

* 11 made deposits of $80,000-plus, five topped $100,000, with the highest $205,000 

* 10 families had household incomes of $80,000-plus – only nine of 32 were below the national median of $64,000 

* Using the trust’s income/rent ratio, the commission claims 26 families were “not in need of affordable housing”. 

“Many of these people would be able to meet their housing needs through renting or purchasing a house in an alternative location,” it rules. 

The commission rejects QLCHT’s argument that the Wakatipu is unique because people on moderate incomes can be considered poor. 

“This is due to the high price of housing in the area. The fact those on moderate incomes cannot afford to buy a house in a particular locality does not mean those persons are ‘poor’,” the commission writes. 

Lack of home ownership isn’t unusual, the commission adds: “All over New Zealand, people are living in rented accommodation or other alternatives to ownership.” 

QLCHT may do good work but it’s not a charity in the legal sense, the commission rules, citing a 1601 British statute. 

Charitable purposes under the statute include “the relief of aged, impotent and poor people … maintenance of sick and maimed soldiers and mariners … aid and help of young tradesmen, handicraftsmen and persons decayed … relief or redemption of prisoners and captives”. 

Early this month, Cole feared “the same 17th century definitions” would be applied by the commission against other community housing trusts, creating “a domino effect”. 

In its most bitter pill, the commission accuses QLCHT of discriminating against people “suffering severe financial hardship” – because the trust’s minimum-deposit criteria excludes them. 

“While it may be a positive programme that’ll provide individuals with a valuable asset, it falls short of being charitable under the relief of poverty.” 

Cole has stressed none of the scheme’s current homeowners will be affected – nor will 22 homes in the pipeline, but fewer new homes will be built. 

Cole has also noted the commission decision is no reflection on the “good work” the trust is doing to solve “affordability issues in Queenstown”.

See also: