Rotorua Lakes Council has admitted it could permanently lose some pensioner housing units as it pushes ahead with plans to demolish 31 homes before replacement funding is secured. The admission came during an update on the council's pensioner housing portfolio, where councillors also learned that 14 applications challenging recent rent increases remain before the Tenancy Tribunal.
Why is Rotorua Council demolishing pensioner homes?
The council transferred management of its 152-unit pensioner housing portfolio to community housing provider Emerge Aotearoa in March, after concluding the ageing housing stock was financially unsustainable in its existing form. The reforms included lifting rents towards market levels while relying on government assistance and council top-up payments to protect vulnerable tenants.
The transition proved controversial after some expected financial assistance did not materialise, prompting ongoing opposition from residents. A review of the portfolio found several Lucas Place properties needed significant repair or demolition, and the council voted behind closed doors in March to pursue a demolition and redevelopment option.
How many homes will be demolished and when?
About 31 units on the southern side of Lucas Place will be knocked down, with 17 tenants relocated. Demolition is scheduled to begin in early 2027. Current concepts suggest redevelopment could increase tenancy capacity from 66 units to 94, if external funding can be secured.
What are the risks of demolishing before funding is confirmed?
Housing, growth and partnerships manager Stephanie Kelly told councillors at Wednesday's Infrastructure Committee meeting that Rotorua had not been identified as a priority location for government housing funding in the 2026/27 financial year. Asked about proceeding with demolition before replacement funding was confirmed, Kelly acknowledged there was uncertainty.
It is absolutely a risk we might have a permanent reduction. But we remain committed to growing our portfolio.
Kelly said the council was pushing ahead with demolition planning and consenting to make the project shovel-ready for future funding opportunities.
Could pensioner housing be removed from council responsibilities?
Councillor Te Rika Temara-Benfell said the government's proposed Local Government System Improvements Bill could remove pensioner housing from being a council core service. Future councils could face difficult decisions about the portfolio, he said, adding: The uncertainty makes me nervous.
Mayor Tania Tapsell said she was disappointed Rotorua was not considered a priority housing location. She asked staff to be open-minded to partnerships with local developers and iwi as a potential solution, with staff suggesting those discussions were already underway.
What is the cost comparison between demolition and refurbishment?
Councillor Trevor Maxwell questioned the estimated $500,000 demolition cost. Infrastructure and assets manager Stavros Michael said the refurbishment alternative was estimated to cost $2.4m.
Are tenants better off under the new arrangements?
Maxwell said some tenants appeared to be worse off despite earlier assurances nobody would pay more under the new arrangements. While some might be happy, some are still not very happy with the arrangements being made, he said. Some are hurting.
The complaints to the Tenancy Tribunal were about rent increases. An initial 20 applications were lodged. Six were resolved or withdrawn before a hearing on 9 September. The remaining 14 applications, 10 of which involve Lucas Place residents, were adjourned to a 29 October hearing.
Kelly said most tenants were now on a reduced rent of $252 per week and therefore eligible for an $80 accommodation supplement, leaving $172 to pay. After learning the estimated market rate for the properties was $350-$360, councillor Robert Lee said tenants had good reason to be pretty happy with the new system.
What concerns have been raised about tenant wellbeing?
Councillor Merepeka Raukawa-Tait raised concerns about the wellbeing of elderly tenants. She said she wanted assurance that Emerge was not just collecting rents and clipping the ticket but providing wraparound services. Loneliness and mental health issues among older residents remained a concern, she said, adding: I want to reassure that somebody does go knock on doors and check in.
Temara-Benfell questioned whether councillors were receiving the full picture, noting emails from tenants that were not quite aligned with staff and Emerge reports. He called for regular independent assessments to ensure councillors received an unbiased perspective.
Kelly said staff would investigate options and report back to councillors. Emerge was required to provide monthly reports under its contract. The feedback we have got from the majority of tenants has been largely positive, she said.
Seven of the relocating Lucas Place tenants were due to move this week, with the rest expected before December. Of the council's 152 pensioner units, 86 are occupied and 66 vacant, of which 28 were ready to be tenanted.
What happens next for Rotorua's pensioner housing?
The coming months will be critical. The Tenancy Tribunal hearing on 29 October will determine the outcome of the 14 rent increase challenges. Meanwhile, the council continues demolition planning without confirmed replacement funding, leaving the future of Lucas Place residents and the wider portfolio in a state of uncertainty.