A developer who’s selling land consented for rental digs is frustrated other parties — particularly the local council and employers — aren’t making it easier to build affordable accommodation.
Roy Thompson’s managing director of New Ground Capital (NGC), which completed the first of three Toru apartment buildings, below the Remarkables Park shopping centre, in 2020.
Fifty of the 78 units in the seven-level building were bought by Queenstown Lakes Community Housing Trust for affordable housing.
NGC had consent to build, next door, two more similar-sized buildings, adding another 152 units.
Thompson says they initially didn’t proceed when rents dropped due to Covid.
Rents bounced back, but ‘‘just too much time had passed’’ since NGC started the project in 2017, and, while conceding building costs are expensive, other parties weren’t helping.
Affordable housing, he says, needs a collaborative approach where all parties with a vested interest in increasing rental housing work together.
‘‘Whether it’s us or somebody else, it needs council genuinely to engage and support the process, employers to come to the party through agreements to lease or even through equity, and it needs builders on-side.’’
Council, Thompson claims, just sits on its hands and expects developers to lower their margins.
‘‘They don’t provide any support whatsoever, no incentives to prioritise different types of housing.
‘‘If I’m going to do a Toru stage 2, let’s say I was committing to do 50% of it affordable, well, why should private capital pay all of that, why wouldn’t council incentivise that kind of activity by at least providing some sort of relief through [waiving] development contributions?’’
Employers, he adds, also need to walk the talk.
‘‘We are sick and tired of no one else coming to the party.
‘‘I’m frustrated, very frustrated.’’
Mayor Glyn Lewers, however, says council’s open to discussing affordable housing projects with developers, as flagged in its new joint housing action plan.
However, it’s ‘‘capitally constrained’’, evidenced by the draft annual plan.
‘‘If they came to us with a financial proposal, we’d probably look to pony up with the government, and, to be honest, the government would be interested if it created actual extra supply and affordability.’’
Lewers says council would also look to funnel affordable housing through the community housing trust, and would need assurances the housing remained affordable and wouldn’t be flicked off later for capital gain.
Under contract, but maybe smaller
Invest Queenstown’s Simon Green says the development site consented for Toru’s stage two and three buildings is under contract.
‘‘We’ve got a client going through some pretty hefty due diligence in terms of what they may or may not do with it.’’
Though the option’s there to uplift the existing consent, ‘‘the general feedback we’ve had from interested parties is the [building] costs are just prohibitive at the moment for that higher-level development in terms of going up seven or eight storeys’’.
‘‘The cost of that is exponentially more expensive than your two-to-three-storey, high-density townhouse scenario.
‘‘But the inquiry on it has all been from parties interest ed in producing rental accommodation, building something that is helping to address some of those accommodation shortages.’’