New Elderly Units Cost Labelled Exorbitant
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Invercargill's new council-built elderly housing complex cost twice the rate of a high-spec retirement village unit — and some councillors want to know why.
The Miller St complex, which opened in May, is a $2.8 million development featuring six single-bedroom units with mobility-friendly bathrooms and garden beds. It replaced four units from the 1950s on the same site. The maths works out to roughly $9,200 per square metre.
Councillor Lisa Tou-McNaughton raised the figure directly at a recent council meeting. "When we get to the building stage, how will we as a council ensure our procurement processes are fiscally robust so we are not building new units at $9,200 a square metre, which we did at Miller St, which is twice the rate to build a high spec unit in a retirement village?" she asked.
Tou-McNaughton called the rate "excessive". Councillor Andrea de Vries went further, calling it "exorbitant", and asked whether the council was cross-utilising its own expertise in areas like landscaping.
Council manager Patricia Christie said design was a key cost factor and that all aspects of the Miller St project had gone through a procurement process. A fiscal lens would be applied to new development sites going forward.
The financial picture extends beyond build costs. Councillor Alex Crackett noted that rent covered operations but not depreciation, interest, or debt — and that the "position of the entire portfolio just worsens each year". Her concern: all ratepayers are funding elderly housing, many of them struggling themselves.
The demand is real. More than 50 people were still on the council's elderly housing waiting list when Miller St opened. Presbyterian Support told council in May that Invercargill's housing stock is dominated by three-bedroom homes, even though 55% of households are only one-to-two person. Building consents for retirement village units and apartments have made up only a small proportion of consents since 1990.
The council owns and manages 21 complexes across Invercargill and Bluff, comprising 222 units in total. Last week it decided to explore partnering with other organisations for elderly housing delivery while also looking at three possible new sites.
Expensive builds, a worsening portfolio, and a waiting list of more than 50 people. The pressure to do something is obvious. Whether the council can do it without spending twice what a retirement village would is less clear.