Housing Foundation Seminar 16 July 2013

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The Housing Foundationmaking a difference our affordable housing solutions

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The Housing Foundation: our approach, our DNA Were a Charitable Trust formed in 2003 in response to small almost non existent

community-based housing sector and a lack of affordable housing options.

Social enterprise that is independent, innovative, credible, business like, operating in acommercial manner in the market place.

Flexible and very lean operator with experienced trustees and management

Action focussed: Housing concepts / ideas demonstrated through real projects.Built and funded 300 + homes and retained equity in 140+ homes

Partner with public, private and community sectors for specific developments Our resources and philanthropic funds are used to leverage in Government and private

finance to deliver economic and financially sustainable outcomes

Our goal: To create new neighbourhoods through blind tenure affordable housing that:o

Empowers households through a range of housing productso Mixes tenures, incomes, typologies to achieve social well being and connectednesso Builds sustainable environments and communities through PLACEMAKING


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Housing Foundation - some guiding principles Housing affordability is more than a house pricing metric . Affordability is not just

the entry house cost (price), it is also providing households with the ability to sustain

decent housing in locations where households need to be We provide quality new built homes that add to the overall supply of housing to the

market and stimulates the local economy We retain a residual investment interest (an ownership share) in the houses to

ensure housing quality and the neighbourhood value is retained & enhanced

Apply Placemaking management principles to our developmentso Placemaking is the process of connecting urban design and the built environment

with sustainable community development practiceso Principles need to be applied at the earliest design stage; start by thinking about

people living there now and how the new development will provide for themo It is vital when planning new neighbourhoods or the urban renewal of existing

communities. When its not planned for or implemented it can lead to socialcleansing.

o Requires long-term investment in the management across the neighbourhood


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Our role - fill housing supply gaps in the social andaffordable housing element of the housing continuum

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Housing FoundationFOCUS


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What we do Directly deliver affordable housing products to working renting households

Affordable Rental (rent to buy) and Affordable Equity (shared ownership) products

Identify & implement new affordable housing products to fill gaps in the housingcontinuum Support Community Housing Providers (CHPs) build their capacity in:

Auckland, Northland, Coromandel, Tauranga, Wellington, Marlborough, Christchurch,Queenstown founder member of Auckland Community Housing Provider Network

Fund Carpentry Trade Training programmes at Massey High School & NorthlandCollege (Kaikohe)

Highlight affordable housing issues and promote solutions

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Denny Ave 7

Everton Place 13

Robertson Rd 32Wymondley Rd 5 (16)

Takanini School Rd 7

West Coast Rd 73 (48 )

Calvert Rd 2

Colwill Rd 11

Rosebank 7

Onehunga 2

Reding Rd, Takanini 3

Denver Ave 15 (25)

Various houses across the Isthmus 5

Cambridge Tce 12

Orchard St 21 (11)

Addison 19

Claverdon Dr 13 (10)

CompletedIn development

In contract

PlusChristchurch 44Kaikohe 2 (Trade Training)Massey High School 1 (Trade training)

Pukaki 10

Clendon 8

Westall (10)

Arawa 13 (0 )

Avondale Rd 2

North Shore 1 Some of developmentsas of July 2013

Trent St 26 (16 )

Addison 9

Waimahia 280 (50 60)Under negotiation Papakura 24 to 40

Mangere 10


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Our affordable housing products for working

households who rent:

Affordable equity (Shared Home Ownership)

Affordable rental (with the option of buying)


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Affordable Equity - How it worksHousehold

Buys a share of the house(with deposit & mortgage)

Housing FoundationRetains a share ofhouse and recycles

65% - 85%Share

15% - 35% Share

The ho usehold can buy more shares in their home so one daythey will own 100% of their home (process is called staircasing)

The opportunity to increase their share of ownership isincentivised and based on their affordability (30% DSR)

If the household wants to sell, HF has first right to buy. If HFdeclines then the property can be sold on the open market andour capital is recycled in to another affordable house

Families are mentored into building a savings history andrelationship with their bank


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How affordable equity housing is funded

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Retained HFSurpluses

SHU Grants

Community

Grants

Philanthropy

Family Home

$ 425 k

HouseholdDeposit

$15 k

HF EquityComponent

$110 k

HouseholdMortgagewith Bank

$300 k

Funded by

LimitingGrowthFactor

Model leverages Equity

Component by approx.4:1 (Capital retainedand recycled)

S o u r c e

d f r o m

:


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Affordable Rental - How it works

Home rented to household at marketrent for five years

Market rent goes up by no more than

3% p.a. or inflation which ever is lower Housing Foundation incurs all ownership

costs

Housing Foundation provides financialplanning support so the household canclear their debts and save

Household pays a soft market rent

Occupancy agreement gives householdright to buy after 5 years

Purchase price at end of occupancyagreement is set at original price (belowmarket value) plus 25% of differencebetween original price and current marketvalue at point of purchase

Household has a financial plan for raisingfinance to purchase outright in 5 yearstime

Over 5 years Household100% ownershipHousing Foundation

100 % ownership


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Signature Project - West Coast Rd (a mixed tenureneighbourhood)

Overall Mix No. ofHouses% within

Neighbourhood

Affordable Equity (SharedOwnership) 33 45%

Affordable Rental Rent toBuy

13 18%

Habitat for Humanity 3 4%

Rental - Other CommunityGroups

5 7%

Older Persons Rental Housing(The Salvation Army)

14 19%

State Rentals HNZC Headlease

5 7%

Totals 73 100%

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45%

18%4%

7%

19%7%

Overall Mix

NZHF ASE

HE - Rent to Bu

HFH

Rental - OtherCommunity Gr

TSA

HNZC Headlea

Average Price / Value in 20112 bedroom $305,0003 bedroom $385,0004 bedroom $410,0005 bedroom $429,000

% Rental 50%


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How WCR fits within its neighbourhood


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A high level summary of the Quality of Life findings fromhouseholds living in a Housing Foundation planned

affordable housing development

By CityScope Consultants in conjunction with Nexus Planning &Research

Completed April 2013

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The residents perspective of living in West Coast Road


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SummaryQuality of life is the same

or improved

House is perceived to be warm (% excellent or very good) 87%

House is perceived to be sunny (% excellent or very good) 77%

Safe places for children to play (% excellent or very good) 49%

Perceptions of kitchen (% excellent or very good) 65%

Perceptions of privacy (% excellent or very good) 60%

Perceptions of fixtures and fittings (% excellent or very good) 45%Perceptions of dryness (% excellent or very good) 74%

Easy to maintain homes (% excellent or very good) 66%

Affordable to heat (% excellent or very good) 62%

Change to life that has positively impact on QoL 69%Crime free neighbourhood 18%

Household size (average household size) 3.7 people


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Quality of life research findings:

Creating a community is a key to improving the quality of residents lives

Tenure matters. Ownership is important to residents: it may contribute tofinancial pressures, but it is a motivator for debt reduction and saving.o Because of the economic climate those households who own equity feel more

vulnerable to income changes through changes in employment

Quality of the housing appears to be driving a reduction in winter illnesses, and

for some households a greater participation in education amongst children. Households appear to accept the trade-off between short-term financial pain for

the promise of longer term financial gain.

Quality of life gains are evident for residents irrespective of tenure, but arestrongest for those on the road to ownership

Diversity (tenure and ethnicity) is working well and appears to contribute to astrong sense of community.


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Household decision to move to West Coast Road

90% of all households, across all tenures say that moving to theHousing Foundation development was a Very Good or Good decision

60%

30%

10%

HF Development

Very good GoodNeither good nor bad Bad

Very bad

16How do you feel about your decision to live in this house? Would you say it was a ?Q


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Affordable housing is starved of affordable capital to support equity

investment (such as grants, soft interest loans) and working capital fordevelopments and to create scale in the community housing sector

Access to land is less of an issue, but it is expensive; And there is a lackof planning legislation giving effect to the new supply of social andaffordable housing within newly consented housing developments

Council regulatory processes and development contributions add timecosts (though delays) and real costs to developments

Household economics: low household income, debt and poor creditrecords are significant barriers.

Challengesthe usual suspects


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Developing new affordable housing products that provide rentinghouseholds with security of a stake in their home and a pathway in to homeownership

Investigating the potential for a Social Housing Bond to fund the yearlydelivery of a min of 500 new homes in to the affordable and social housingsector. Lot of issues to work through:

Is there an investment appetite for such an instrument? Will the market accept a 10 year bond before realising their capital How low can the yearly yield be? Who underwrites the realisation of the bond and its yield?

Working with Community Investment organisations (philanthropic bodies) to

determine how they can invest their capital in to affordable housing Working with the Tamaki Collective to create an affordable housing

development of scale in South Auckland

Growing the sector what are we doing?


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What we have learned No Magic Bullet for solving our Affordable Housing problem

Need wider range of supply side housing products and services

Delivery must be focussed on the diverse needs Significant new capital (equity, debt, working capital) and partners are

needed to achieve scale and enable greater leverage of Govt funding Projects require high level of collaboration and leverage to avoid unnecessary

costs. Bureaucracies mean well but rarely work collectively internally, or

understand what partnering means One size does not fit all , low Income households still want housing choice &

quality

Households crying out for support and nurturing: Household debt, low

incomes, poor credit are absolute barriers for households trying to get out ofthe rental trap. Financial literacy programmes are invaluable

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K i t t t k S l i f


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Key points to take away Solutions are not easy or fast Central Government cannot fund the affordable housing sector and

affordable housing supply chain on its own. Councils, the Private Sector,Community Investment and Philanthropists all have important roles.

Government, Councils and Businesses cant ignore the economic, social andenvironmental issues of housing affordability

Time is ripe to instigate new housing funding partnerships between public /private / philanthropic partners to address the structural barriers of housing

affordability facing New Zealanders There is need for a range of social and affordable housing providers with

different housing products across the housing continuum

Placemaking and planned mixed tenure new neighbourhoods give people

the opportunity to have a stake in their community. Placemaking is the firstand the last planning step

Greater scale, more affordable investment and better planning is needed


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Thank you Questions?

www.housingfoundation.co.nz

Housing Foundation Seminar 16 July 2013

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Transcript of Housing Foundation Seminar 16 July 2013