The Gore District Council will explore whether Housing New Zealand can help finance the building of houses in the Matai Ridge subdivision.
The motion, proposed by councillor Nicky Davis and seconded by Glenys Dickson, was carried at the council meeting on Tuesday.
After the meeting, Cr Dickson said the Housing New Zealand KiwiBuild scheme might be a way out of the situation for ratepayers.
“We can sell the sections and pay back the cost of the land and then capitalise on the rates for the next six years and pay back the infrastructure, so then there would be no losses to the ratepayer,” Cr Dickson said.
In December 2018 the council decided not to continue with the project due to increasing development costs.
At Tuesday’s meeting, chaired by Deputy Mayor Cliff Bolger, councillors passed a recommendation that a suitable debt retirement programme for the project be included in the 2021-2031 long-term plan.
When Cr Bolger opened the topic for discussion, Cr Dickson made the suggestion regarding Housing New Zealand.
Cr Bolger said it was his understanding the type of client Housing New Zealand would help into a house would be different from those the council had in mind.
“We were pitching that subdivision as possibly [for] people who were building their investment second homes and, as I understand, that fund is more available for people who might be starting out in new homes.”
Chief executive Steve Parry agreed with Cr Bolger about the kind of client the council hoped to attract to invest in the subdivision.
“At the time we were pitching the development to fill a void in the middle or upper middle of the local market. It wasn’t really a first-home buyer-type proposition,” he said.
Cr Davis said while the project was on hold, there was still the possibility the council could go ahead with it in the future.
“It would be worth looking into the Housing NZ situation for this subdivision to see whether or not it fits the criteria they would have because if it does, they fund quite a lot of the development,” she said.
The 36 sections already had resource consents and plans for drainage, lights and other facilities.
It did no harm to investigate the possibility, she said.
A motion to this effect was carried by the meeting and general discussion about the subdivision followed.
Cr Bret Highsted said it was the first time the matter had been publicly discussed and it was important to give context as to why nine of the 11 councillors present in the meeting voted to stop the development.
“Our decision was to avoid exposing the ratepayers to the risks of the development of the project we had in front of us and that was carry $4million in debt, $172,000 in interest . and once fully sold, a loss of close to a million dollars,” Cr Highsted said.
Cr Bolger said it did concern him that after making the decision to mothball the project councillors were discussing other options.
“We’re carrying a debt forward and now we’re scrambling down the back of sofas and under couches for any cent that can dig us out of this situation.”
Cr Graham Sharp said he was regularly asked about Matai Ridge because the public did not understand the situation.
“Nobody understands the mess that we are in with it .. It is a mess and if I had a chance I wouldn’t land bank it at all, I’d sell it .. get out of it, cut your losses when you can. We’ve made a mistake, we should get out of it.”
The Southland Housing Assessment Report, released in 2018 by the Southland Housing Action Forum, shows the region needs about 2800 houses in the next 12 months to cater for resident growth.