Māori social housing provider learns the hard way on Hamilton housing project

After the first few units were built, the development faltered, "with funding and project management problems resulting in no further construction", a Hamilton City Council report says.

A flagship social housing provider is selling Hamilton land once earmarked for affordable houses in order to stay afloat after biting off more than it could chew.

And there's no guarantee the land up for grabs in one of the city's most deprived neighbourhoods won't catch the eye of a developer.

Enderley's Wairere Village was meant to be a 62-unit affordable housing development along Shakespeare Avenue and Tennyson Road.

However, the "extremely ambitious" development turned out to be "far larger and more complex" than Te Rūnanga o Kirikiriroa, the group behind it, anticipated.

The village has been talked about since 2014 and six to eight homes have been finished - but with delays, unanticipated costs and problems along the way.

Now Te Rūnanga, a social service provider, wants to sell some Shakespeare Avenue land to raise cash to keep the community housing development going and reduce debt.

One parcel of that land has conditions set by Hamilton City Council which would make the sale impossible - so Te Rūnanga is asking councillors to change them.

So far, six units have been completed at Wairere Village, a Hamilton City Council report says.

"The TROK [Te Rūnanga o Kirikiriroa] development has subsequently faltered, with funding and project management problems resulting in no further construction."

The Rūnanga learned lessons the hard way, a letter from Te Rūnanga o Kirikiriroa chief executive Andrea Elliott-Hohepa says and the organisation now clearly understands "the magnitude of a development of this scale".

Elliott-Hohepa is a new chief executive at Te Rūnanga, but described in the letter how the organisation set up a subsidiary called Ngā Rau Tātangai (NRT) to deliver Wairere Village.


Industrial vacancy levels across Hamilton
After the first few units were built, the development faltered, "with funding and project management problems resulting in no further construction", a Hamilton City Council report says.
"This project was an extremely ambitious one for NRT," she said. "Whilst the Rūnanga had achieved success with a smaller 14 unit build for kaumatua housing (in collaboration with Rauawaawa Kaumatua Charitable Trust), this development was far larger and more complex than both NRT and the Rūnanga ever fully anticipated."

On top of that, the organisation set up Rezlab, a steel framing business, to give young people apprenticeships and to support the housing development.

They were excellent ideas, Elliott-Hohepa said, but big, unexpected extra costs came from issues such as "huge consultancy costs", delays, and poor advice.

In December 2017, Te Rūnanga formally shut down Rezlab and brought subsidiary NRT back under its wing.

The board still wants to complete the housing project in some form, Elliott-Hohepa said, and a working party is considering options such as partnering with another organisation or completing a smaller version.

There has been some success, she wrote, as eight homes are completed and a positive and connected community is building.

"The sale of Shakespeare Avenue [land] will reduce debt, enable the completion of stage one and potentially enable a pared down version of the development."

Among the land proposed for sale is a parcel which Hamilton City Council gifted to Te Rūnanga in 2014.

It came with a condition: if not used for community housing, it would be returned to council or passed on to another registered community housing provider.

Te Rūnanga is asking city council to transfer that encumbrance to another piece of land which will be part of the development, and council staffers recommend councillors do it.

Te Rūnanga o Kirikiriroa wants to cash up by selling Shakespeare Avenue land including the part marked in pink - which was gifted by Hamilton City Council. Council would have to remove a condition on the land before it could be sold for residential housing.

Wairere Village's progress so far is disappointing, a report said, but TROK's alternative is sound and will leave council in a slightly better position "as the security offered is over a greater area of better quality land".

"The TROK proposal falls clearly within the spirit of the original gift – to facilitate the delivery of additional community housing units in an economically and socially deprived area of the city."

Councillors are due to decide at a Tuesday meeting.

Elliott-Hohepa could not be reached for further comment on Monday.

What happened at Wairere Village?
March 2014: 
Te Rūnanga o Kirikiroa buys former Housing New Zealand land in Enderley for a social housing project. The plan for a 2.2 hectare housing project on vacant land along Shakespeare Ave and Tennyson Rd is presented to Hamilton City Council.

July 2014: Hamilton City Council gifts two small parcels of land - which it wasn't using and couldn't sell - to Te Rūnanga, for the 62-unit development. There is an encumbrance on the land to say if Te Rūnanga didn't complete the planned development, the land would go back to council or to another registered provider.

May 2015: Construction of the first five Wairere Village houses begins.

January 2016: Contractor Liberty Homes walks off the job at Wairere Village after a pay dispute, progress grinds to a halt.

February 2016: 
First two homes meant to be delivered to new owners. The stoush means that doesn't happen.

September 2016:
Wairere Village opens a show home - a two-bedroom kaumatua unit. The first five homes are well under way and 25 of the two-storey houses have already been sold from the plans.

December 2017: Te Rūnanga brings Ngā Rau Tātangi, its subsidiary charged with delivering the project, back under its wing. Associated steel framing business Rezlab formally closed.

June 2018: Six to eight of the 62 units completed. Te Rūnanga o Kirikiriroa wants to sell some Shakespeare Avenue land, asks Hamilton City Council for encumbrance on one piece of gifted land to be moved to another piece, which will be part of the social housing development.

From Stuff.co.nz
​https://www.stuff.co.nz/business/property/104975198/mori-social-housing-provider-learns-the-hard-way-on-hamilton-housing-project