Wellington Council Goes landlording

[flyernzl]

Wellington Council gets into rentals.

https://www.tvnz.co.nz/one-news/new-zealand/wellington-council-intervening-in-capital-s-broken-rental-market

News item makes interesting watching.

The proposed rentals are supposed to be for 'essential workers', rents apparently will only increase by the CPI over the life of the tenancy, and the whole exercise will be at no cost to the ratepayers.

Yeah, right.

If the current proposals for 'lifetime tenancies' are enacted this year what would happen if (say) a schoolteacher takes up the tenancy and then, a year or two later, tosses in that job and becomes perhaps a real estate salesperson? How would the council then be able to terminate that persons tenancy?

If there are substantial increases in, say, the cost of insurance on the property to the tune of 40% or 50% (quite likely) how will those costs be covered/recovered if the rents can only go up by the CPI?

What written guarantees are in the leasing agreement saying that the building must not at any time be subsidised by the ratepayers, either on a cashflow basis or by ratepayer-guaranteed loans? I bet there are none.

If you are a Wellington ratepayer I'd be creating a fuss about this proposal as I sense an expensive flop in the making.

[Davo36]

Kind of ironic they are saying it's a 'broken' rental market.

Guess who broke it? Wellington council would have to take most of the blame surely?

[Perry]

"Broken" is like that worm expression the W'gton woodenheads used to rely on.

"That's an issue that'll have to be addressed."

Nary a hint of where, when, by whom or who pays.

Peter's right, though: keep your eyes peeled for ratepayer subsidy requirements.

Mind you, the council will do everything it can to disguise any such thing, of course. Perhaps even to the point of keeping it "off book?"

Sundry expenses, anyone?

[Bob Kane]

I'm not sure why Wellington City Council are so concern about "essential workers" that they want to lease a whole building off a private developer.
"Essential workers" can get by on their own two legs - they earn good money.
I suspect this scheme started out for poor, homeless people and ran into the predictable problem of who will pay the rent when a poor person cannot.
So they had to change the target audience from poor people to middle-class people and then had the problem of justifying a handout to people earning $80k pa.
"Essential workers" was the clever answer.
A teacher owning a pet is given as an example.
It's all a smokescreen.
There's more going on than what's been said.
The only winner will be the developer owning the building.

[Perry]

Hear Ye, Hear Ye

It's all a smokescreen. There's more going on than what's been said.

No, Bob - surely not?! You can't be suggesting that the council and its functionaries are being ever-so-slightly duplicitous, now, are you?

Wonder if the council is helping finance the project? As guarantor for the developer's loan, perhaps?

The only winner will be the developer owning the building.

And the only losers will be Ratepayers.

Could this affliction infect other councils?

[Bob Kane]

Wonder if the council is helping finance the project? As guarantor for the developer's loan, perhaps?

No - the developer is breaking even on this one.
The developer is being generous to the council on this project in order to get favorable treatment for other projects they want to do.