Central Otago’s affordable housing situation is in “dire straits”, according to a group attempting to find a solution.

Yesterday the issue prompted a long discussion by the Central Otago District Council (CODC), who were faced with deciding how and if council should get involved.

Much of the discussion revolved around whether ratepayers would be prepared to help fund affordable housing projects.

The Central Otago Affordable Housing Trust had been working since 2017 to find ways to address what they consider a crisis of housing, the meeting heard.

Rental costs for workers were very high as was the cost of building and the area had “missed the boat already” in addressing the issue, Trust representative Glen Christiansen told CODC yesterday, during a public forum session.

He said an employee had reported having to pay $750 per week for a four bedroom house in Cromwell and that the average build could cost $720,000 in the town.

He said local businesses needed staff, but there was nowhere for them to live and now some would leave New Zealand to work where the cost of housing better matched wages.

Glen, who manages The Gate hotel, felt the issue should have been addressed years ago and Central Otago had somewhat “missed the boat already” in being able to provide suitable housing stock.

“We are in dire straits, there’s no nicer way to put it.”

An impassioned plea to council for help with housing affordability, was made yesterday by Central Otago Affordable Housing Trust representative Glen Christansen of Cromwell

The group had said that 1.5ha of land at council’s Gair Avenue subdivision in Cromwell, valued at $12.5M, would need to be gifted to kick start a programme to develop affordable homes.

That would represent one third of area.

The houses could be managed to ensure they were sold on without normal market-led capital gains so they remained affordable for the next purchaser.

He told council the group were confident of full support from business ratepayers and predicted around 75% of general ratepayers would also be prepared to help fund such initiatives.

The land was needed to leverage funding to secure loans to build the houses, according to a council report presented yesterday, however, that potential income had already been tagged for use elsewhere.

“There is significant financial value in this land and the Cromwell Community Board is relying on land sales to help fund the Cromwell Masterplan programme of work.

"In addition to the value of the land, there would be other real costs council would face including consents, subdivision costs and horizontal infrastructure costs.

None of these costs are currently budgeted for and would likely have a rates impact,” the report stated.

Mayor Tim Cadogan felt the community should be consulted before any actions that would effect rates was approved.

“The question has not been asked of the community as to are you willing to invest $12M or $15M to do something.

"We are playing in the dark a little bit.”

A motion that opened the way for consultation was suggested by Cr Neil Gillespie, but not included in what was eventually agreed.

Cr Nigel McKinlay said the Gair Avenue development should go ahead as is and not become tied into a housing trust model.

He said he lacked confidence in what could be achieved through such schemes where ownership rules created a situation for buyers, like having a “glorified lease”.

“It sets up the council as a landlord and someone plays God to decide who gets that subsidy.”

Council’s current Stage 2 development at Gair Avenue involved 110 houses.

The Pines housing development in Alexandra was the only other council-owned land available for any such scheme.

It was resolved to develop a policy for affordable housing and look for opportunities to collaborate on the issue and help fund it from external sources.