Waikato Regional Council is set to investigate funding options for an affordable housing initiative proposed by philanthropic organisation, Momentum Waikato.
At a meeting last Thursday, councillors heard that Momentum Waikato is seeking to invest in affordable housing outcomes through its impact investment strategy.
The initial focus will be in areas with an identified need and where there is alignment with the Waikato Housing Initiative’s documented housing shortfalls in the region.
To support the initiative, Momentum Waikato is seeking an initial $10 million contribution from Waikato Regional Council as a “cornerstone” investment. Dependent on the form of this funding, a minimum return of 3% would be guaranteed, Momentum Waikato’s Kelvyn Eglinton said.
“Housing is an enabler to grow the economy,” Mr Eglinton said.
“Affordability is the biggest opportunity and a deliberate initiative is required in areas of the Waikato region where people can service a mortgage.”
He said a funding injection from Waikato Regional Council will help to attract other investors to enable an affordable housing fund to those in need, with provisions to ensure housing isn’t sold off at a profit.
In 2019 the Waikato Housing Initiative undertook a Regional Housing Stocktake based on 2018 statistical information. It found a regional shortfall of 7,500 homes and a projected need for a further 51,000 homes by 2043.
The stocktake also identified that the median house price, at more than six times the median household income, is considered to be “extremely unaffordable”. To December 2021, median house prices had risen to 9.6 times the median household incomes.
With Kāinga Ora responsible for national social housing needs, there remains an opportunity in relation to affordable housing, councillors heard last week. To meet this, Momentum Waikato is proposing a Community Investment Fund that would invest in affordable housing outcomes.
Councillors heard that an investment from the council could take the form of a grant to either establish the fund or support the project; a loan to support the project; or blended funding to support a project.
“There are two potential council funding sources that could be considered – the Regional Development Fund established in 2015 to support regionally significant projects which promote regional economic development, and are achieved in a way that also enhance environmental, social and cultural outcomes, or direct investment in the Community Impact Fund by way of the council’s Investment Fund,” Council said in a statement following the meeting.
Councillors voted in support of funding for Momentum Waikato as a concept, and directed staff to further investigate a pathway to contribute to a community impact fund.
A report on the outcome of the investigation will be presented to councillors in the new triennium.