Affordable housing option unveiled in Christchurch tender

BUSINESSDESK: State-owned Housing New Zealand has unveiled a flagship project for medium-density inner city developments in its $15 billion housing portfolio it says could become a new mixed tenure housing model for New Zealand.

The tender document for 399 Manchester St in Christchurch on the fringe of the city's earthquake-devastated central business district addresses the need for affordable housing by building 20 to 30 one- and two-bedroom apartments, a third of which will be owned or leased by Housing New Zealand.

"It is to be a demonstration site – showing innovative planning, technology, building and ongoing management systems that will become the benchmark for developments on Housing New Zealand sites in New Zealand and for developers to showcase globally," the glossy tender document says.

The development is essentially a public-private partnership but at $6 million to $7 million in total value is too small to interest large public-partnership operators looking to partner the government in social housing, an industry insider says.

The project is not using the standard Treasury document for PPPs. The government's housing portfolio is larger than its school portfolio.

The tender invites expressions of interest to design and build the first of a series of high-profile game-changing housing developments.

"This project is Housing New Zealand's first flagship redevelopment project in Christchurch – a demonstration of the innovative rebuild to be applied to this city," the document says.

Expressions of interest are wanted for an equity and development group to design, engineer and redevelop the site.

Two respondents, known as contenders, will be short-listed and Housing NZ will contribute a maximum $200,000 plus GST to the cost of developing proposals.

A joint venture, subject to approval by the Housing NZ's board, is then envisaged with a success respondent.

Housing NZ will buy or lease up to a third of the units as social housing, with a maximum total development cost of $250,000 a unit. It will also make annual service payments for up to 25 years.

The partner will provide equity and will be the primary developer.

The 2000sq m site is adjacent to one of New Zealand's oldest and largest Kauri homes, Holly Lea, which is also known as McLeans Mansion, the document says.

Housing NZ own 69,000 properties in New Zealand and Finance Minister Bill English said at the weekend that lessons were being learned from the Christchurch rebuild which could be used elsewhere to develop affordable housing.

"The government owns $15 billion worth of houses, and, in most cities, the best opportunities within the cities is actually on the government-owned Housing Corp land," Mr English said on TVNZ's Q+A programme.

Housing NZ talks of a mixed tenure community development with some units privately owned, some leased and some social housing.

"What's on offer here is a fresh start with a fresh approach," the Housing NZ document says.