Rotorua’s council is looking to improve its pensioner housing services – by removing itself as landlord.

There is a waitlist for the council’s 152 subsidised housing units, of which 24 are vacant awaiting refurbishment.

Ratepayers subsidise the rent for tenants who meet the criteria to stay in the units. Rotorua Lakes Council collected $800,000 in rent a year with upkeep costs of $2.1 million.

Mayor Tania Tapsell previously described the financial model as “very difficult”.

During the Long-Term Plan process, 351 submissions related to pensioner housing and 252 supported leasing the council’s stock to a community housing provider.

The council agreed to invest $2.2m in the next two years in vacant homes to get them tenanted.

Councillors on Wednesday unanimously voted to seek expressions of interest from community housing providers keen to take the portfolio on, as they had access to Government funding the council did not.

Leasing was expected to provide opportunities to grow the portfolio, ensure it was financially sustainable, provide greater support services for vulnerable tenants and ensure ongoing housing security for existing tenants.

Council development and partnerships manager Stephanie Kelly previously said the success of this option relied on an income-related rent subsidy being approved for tenants.

Council landlords could not access this but community housing providers could, via an application.

The expressions-of-interest process was intended to provide the council with options for potential lease arrangements.

These included leasing all land and dwellings in the portfolio, leasing one or some of the pensioner complexes, or leasing the ground for one or more of the complexes along with the purchase of the units.

The second step involved detailed proposals from shortlisted providers including their proposed leasing arrangements, a business case, financial modelling, tenancy management system details and proposed governance arrangements.

A final decision will be made at a council meeting.

Rotorua Lakes Council community and district development group manager Jean-Paul Gaston (right). Photo / Laura Smith.

Community and district development group manager Jean-Paul Gaston said its intent was for rent to stay affordable at a maximum of 30 per cent of market rent.

He said when the council visited tenants for feedback, a lot of it focused on the level of maintenance the council had provided.

Local Democracy Reporting shared the story of Mary Smith last year - a pensioner flat resident who waited two years for a deteriorating window to be replaced.

Tapsell said in Wednesday’s Community and District Development Committee meeting the council’s decision meant there would be local people looking after locals.

“We have seen some downfalls when Government agencies, regional or national, are given the task of looking after those who are vulnerable and in need of a home.”

Committee chairwoman Sandra Kai Fong said some of its units were in good condition, while others were not. There was also land that could be developed, she said.

Kai Fong believed seeking expressions of interest, and the subsequent “range of options”, allowed it to provide “more and better” as well as certainty for tenants.

Councillor Don Paterson initially had concerns.

Councillor Don Paterson at a July meeting. Photo / Laura Smith.

“We do have a responsibility to our elderly in our community.

“They have paid rates all their lives and they deserve something at the end.”

If the outcome was better, he supported the new model, but said if there were “too many” community housing providers involved it could “get very messy”.

“Very hard for us to maintain oversight and make sure they are delivering on their end of the bargain.”

Councillor Conan O’Brien also held reservations but said if it went to the expressions of interest stage, “at least we could say we have had all sides represented and put before us.”

Other councils have taken themselves out of the landlord business.

In 2022, Tauranga City Council sold most of its elder housing portfolio to Kāinga Ora, which paid $17.2 million for seven villages and agreed to spend $32.4 million upgrading and redeveloping them over the next 25 years.

The council put two Mount Maunganui villages on the open market.

LDR is local body journalism co-funded by RNZ and NZ On Air.