Since 2021, it's been Council's aim to have our Elderly Persons Housing Service operating self sustainably by 2027 (i.e. operate without ratepayer funding), but it’s clear now that the cost of running the service has increased beyond what was anticipated.

Council has historically rented out its senior housing at lower prices, but this strategy won’t work long term if we want to keep providing safe and affordable housing for elderly people in our community that need it.

We’ve already deferred about $500,000 in maintenance over the past few years, and many of our units are old and require ongoing work to ensure they remain compliant with Healthy Homes rules into the future. So, we really need to think about making some changes.

One of the things that Council is considering is raising rents to 80% of market rate, we have been encouraging tenants to talk to the Ministry for Social Development to see if they are eligible for an accommodation supplement or other financial help. We anticipate most of the tenants would be eligible for financial assistance if rents were to rise.

Now that we have talked with the tenants, we want to hear what our community thinks. We know this is a big change for tenants, but we’re not making big decisions yet, just collecting information and feedback so we can make an informed decision. This is a big issue for our community, and we are treading lightly because we want to do the right thing for tenants now, and in the decades to come.

The Ashburton District Council currently owns and operates 102 Elderly Persons Housing (EPH) units across Ashburton, Rakaia, and Methven.

These units are available to rent for low-income older residents who have limited ability to secure warm, dry, and affordable housing in the private market.

The Elderly Persons Housing (EPH) policy sets the basis for how Council will provide elderly housing in the Ashburton District, with the intention of it being a self-funding activity of Council (i.e. not ratepayer subsidised).

The policy provides clear guidance around who is eligible to live in Council owned EPH housing and how the level of rental is set.

Having a policy ensures that:

• Council’s approach to providing elderly persons housing is clear, consistent, and transparent
• Eligibility criteria and rental setting are applied fairly and consistently
• The service is financially sustainable over the long term

Council is proposing to set rents for Elderly Persons Housing at a minimum of 80% of market rent (baseline of 80%), with rents reviewed and adjusted annually in line with changes in the assessed market rate.

Setting rents at a baseline of 80% of market rent:

• maintains rents below market levels, supporting affordability for low‑income elderly tenants
• provides a more sustainable funding base for the service
• reduces reliance on ratepayer funding over time
• helps ensure housing is maintained to a higher standard than before
• may trigger more financial help from the Government for tenants

This approach balances the need to keep housing affordable for tenants while ensuring the service can be maintained to an appropriate standard into the future.

Back in 2021, Council consulted with the community on proposed changes to the way the service was funded. Based on the feedback we received, Council began staged rental increases of $10 per year. By 2027/28, our aim was that the service would operate without the need for top ups from ratepayers. However, a review of the service this year has highlighted a number of ongoing challenges that mean we need to reconsider how the service is funded both now and into the future.

Aging homes need a greater level of maintenance and repairs

Council has previously taken a conservative approach to maintenance to help keep the cost of providing this service affordable. However, as the housing stock has aged, this approach is no longer sustainable. A detailed assessment of all units has been carried out to better understand their condition. This work has shown that increased investment is now required to address deferred maintenance and to ensure the homes can continue to meet expected standards into the future.

It’s costing more to provide affordable housing

Like many households, the cost of running and maintaining these homes has increased over time and is expected to continue rising. Insurance, rates, and essential services all cost more than they did in the past. The cost of repairs has also increased. This means Council is no longer able to complete as many upgrades each year as it once could.

To continue providing this service at an acceptable standard, we need to increase funding to keep pace with these rising costs. This includes not only meeting day-to-day operating expenses but also ensuring there is enough funding available for ongoing maintenance and timely repairs. Without this, there is a risk that the condition of the units will continue to decline over time.

Council does not receive direct funding from central government to provide elderly persons housing.

This means the service can only be funded in two ways—through rent paid by tenants, or through rates paid by the wider community.

Given these constraints, and the intention for the service to operate with minimal reliance on ratepayer funding, Council is considering whether there are more sustainable funding approaches.

This includes exploring whether greater use could be made of existing central government support, such as the Accommodation Supplement and other forms of financial assistance, to better support tenants directly while helping to meet the cost of providing the service.