“How will the new funding work for CHPs.We’ve asked the community housing sector to move in new directions since the decision to open up IRRS and I know that kind of change can be unnerving.
Here’s how I see the flexibility MSD now have in place for CHPs buying social housing.
In many cases it’s a bit like taking out a 25 year mortgage.
The key new words are tailored and flexible.
If we look at the negotiable contracts for building new social housing, a CHP can get a 25 year Government backed income stream – based on the Income Related Rent subsidy – effectively the going market rate of rent.
Under the flexible tailored contracts MSD will continue to pay even if the house is empty between tenancies.
MSD is also open to negotiating to pay more than the IRRS.
They are also open to paying an upfront development payment – in most cases around 10 to 20 per cent of the total cost of building.”
Read more of Paula Bennett’s speech here.