The high cost of living is about to affect some elderly tenants in council housing in Central Otago, as rent increases are tipped as part of an annual review.
The increases will be the first rent rise since the last review in 2019 disrupted the annual review flow, and market rent assessments have remained static until now.
Central Otago District Council property and facilities officer Janice Remnant delivered a report to councillors at a meeting last month, telling them the council owned and maintained 98 “elderly persons’ housing” units throughout the district.
The weekly rent charged ranged from $70 to $125 in Ranfurly, $75 to $150 in Roxburgh, $135 to $225 in Alexandra and Clyde, and $205 to $270 in Cromwell.
Of the 26 units in Alexandra and Clyde, eight would have no rent increase, eight would have a $5 increase and 10 faced a $10 increase.
All 31 Cromwell units would have a rent increase: for 19 units it would be a rise of $5 and for the remaining 12 a rise of $10.
Units in Roxburgh would face a rent increase of $5 except for the two bed-sit units, for which there would be no increase.
Of Ranfurly’s 26 rental units, 10 would have a $5 rent increase and 16 would have no increase.
Ms Remnant said the council had a policy of charging market rent for new tenancies, and market rent was set annually.
As part of the 2018-28 long-term plan, the council had given consideration to subsidising rents, but recognised substantial costs would be placed on ratepayers and that reducing or subsidising the rents would have the effect of reducing any supplement provided to tenants by the Ministry of Social Development’s accommodation supplement.
That meant the status quo of charging market rents for elderly persons’ units remained.
The last rent review was undertaken in May 2019 and new rents became effective on September 1 of that year.
As part of its Covid-19 response plan, the Government put a freeze on all rents for six months from March 26 to June 25 in 2020.
A market rent assessment undertaken in July 2020 meant market rents remained static for the units. There were two tenants who were paying under market rent so their rent was increased to meet market rent.
The new rates apply from July 1, and tenants will be notified this month.