Plans to tackle Queenstown’s lack of affordable housing have been partially scuppered by possible changes to the Overseas Investment Act.
Queenstown Lakes Community Housing Trust executive officer Julie Scott confirmed one foreign investor, who was prepared to finance 50 new apartments in Frankton, has pulled the pin on the transaction.
The trust is buying the proposed houses from New Ground Capital (NGC) which is building the 200-odd unit complex at Remarkables Park.
Ms Scott confirmed the contract was due to go unconditional this week and stressed she was “working pretty hard to get our funding in place.”
That funding, “Shared Home Equity Product” (SHEP) was proposed following the launch of a mayoral task force in December, set up to tackle unaffordable housing.
It has proposed 1000 affordable homes be made available for lower-income households by 2028.
Ms Scott said this strand was based on the SHEP model.
“However, about three weeks ago the investor behind that product told us it was no longer available because of the proposed offshore buyers legislation. The investors have had the wind put up them and are no longer interested. They cannot commit their funding.”
While Ms Scott, who is also a task force member, stressed she was working on other options, it had “put a spanner in the works”.
Changes proposed in the Overseas Investment Amendment Bill would mean only citizens and permanent residents would be able to buy property without being screened by the Overseas Investment Office.
She called on the Government to be clearer.
“Ideally, we would all really love to see the Government put in some waivers around that legislation for ethical investors.
“It could be as simple as saying, ‘if it is going towards a registered community housing provider’ then that is the eligibility and criteria. That would … make everything so much easier and would get houses built in that entry-level market.”
Queenstown Lakes District Mayor Jim Boult described the situation as “very frustrating”.
“Government is setting out to assist with affordable housing but at the same time they are pushing forward legislation that is actually harming our ability to do something about affordable housing. It is a classic case of introducing legislation that has a double-edged sword.
“We had a group of foreign investors … willing to put in a significant sum into an affordable housing solution, to the order of $30million, and because of the possible changes to the Act, they have got nervous and pulled out of it.”
He did not share Ms Scott’s optimism in finding alternative funding.
“At this time, this opportunity to house something like 40-odd families is gone.”
Otago Daily Times