Wellingtonians are jumping at “affordable” rentals of just $750 per week for three bedrooms.
Wellington City Council opened expressions of interest last Monday for 52 apartments on Willis St. Eight days on, 230 people have put their name forward.
Te Kāinga Aroha apartments are a joint project between the council and The Wellington Company and saw office space in the former Freemasons building converted into apartments. Rents start at $410 for a one-bedroom apartment, $580 for two, and $750 for three.
For those who haven’t faced renting in a while, the numbers may seem anything-but affordable but, in the thick of a housing crisis, they – relatively – are.
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Trade Me data shows the average weekly rent for a central Wellington one or two-bedroom apartment in December was $520 and three or four bedrooms were $795 a week. Figures show that the median rents had risen in the city every year from 2015 to 2019, when they took a brief hiatus.
Mid-2019 saw Youth Council deputy chair Laura Jackson warn city councillors there was “simply not enough [affordable] accommodation” in the central city and some students were leaving Wellington as a result.
Councillor Fleur Fitzsimons, who has the housing portfolio, said these apartments were about ensuring “teachers, nurses and other public sector workers can work and live in our city”.
The real affordability of the new apartments was that the council was not in the project to make money, meaning renters would not be faced with market-driven rent hikes, she said.
But, because the project had to be cost-neutral to council – meaning it couldn’t cost it any money but did not return a profit – there may be some future increases to deal with extra costs to council.
The council hoped to announce more office-block-to-apartment developments in the coming week that, when developed, would be rented out on the same criteria. There was also talk of some new builds on the cards, Fitzsimons said.
Not everyone who applied would be able to get an apartment and, if too many people met the criteria, a ballot would be drawn to make the selection.
Priority will be given to people who work in, or intend to work in, an essential public sector role; those on a low to medium income who have difficulty accessing rentals and are not eligible for income related rent; and those who do not own their own home.
The deal with the Wellington Company lasts 15 years, after which it will be handed back to The Wellington Company but the council will have first right to buy it if it decides to sell.
Wellington Company director Ian Cassels said the project, driven by his son Alex, was “a clear expression of our commitment to ameliorate the threat to the city of good quality affordable rentals”.
Renters United organiser Robert Whitaker said market rents were generally unaffordable but, compared to the current market, these were relatively-affordable. They would become more-affordable over time if the council did not impose unnecessary rent hikes.
The council also needed to invest in much more social housing stock as people on lower incomes were finding they could not afford to live in the city, he said.
The apartments, which are still under construction, will be ready for tenants in March.