Sun 18 Dec 2016 2:31AM

Time to make an important decision - urgent call for a meeting

TP Tina Pope Public Seen by 264

Mark G, Mike and Tina met Homes for People and thrashed out some stuff on Saturday. See Mike's thread "Partnering with Homes for People" below. If we are to go with the model that HfP have offered then we have to make that decision by mid-week at the latest. This will give the required time for Raima and Pete to apply to The NZ Housing Foundation and Kiwibank, a sale and purchase agreement to be secured and the GiveaLittle/PledgeMe campaign to be set up. If we decide not to then we need to focus on getting local bridging finance to buy us time to talk directly to NZ Housing Foundation about backing Raima and Pete's mortgage or Dwell who have their own affordable equity product, and doing it ourselves or under the umbrella of Dwell. We have already secured a guaranteed $120K bridging for 6 months and am confident this is a doable option. We need to make this decision and I think as many of the wider group need to be in on this as possible. I think a face-to-face meeting would be so much better than trying to decide this in writing, although that's an option. Can we try to meet Mon or Wed evening this week please?


Mark Galbraith Sun 18 Dec 2016 3:17AM

Yes Tina I agree a quick decision is required I think Monday best as time is running out. Happy to have meeting at ours


Paul Hughes Sun 18 Dec 2016 4:38AM

There is a post quake mtg at 7 on monday already


Mark Galbraith Sun 18 Dec 2016 5:27AM

I've already had one person from reading the website declare an interest in taking up a share in the company. I had to explain the two different scenarios i.e. HFP or the original plan so I think we need to get this sorted by end of tomorrow. In my opinion the HFP scenario is best by a long shot in terms of outcome for Raima and Pete.
What about trying a shorter meeting before or after the post quake meeting? How many people would be trying to attend both? Alternatively we decide through Loomio but I agree with Tina face-to-face is far more preferable.


Peter Handford Sun 18 Dec 2016 6:11AM

I could make a meeting this week. Monday probably best for me.

Pete Handford


Formerly PA Handford & Associates Ltd

Ph 04 904 0876 | Mob 021 0623397

www.groundtruth.co.nz ( http://www.groundtruth.co.nz/ )

PO Box 52, Paekakariki, NZ


Tina Pope Sun 18 Dec 2016 7:13AM

I agree with Mark G - we need to get this decided. Can we make it at 8 or 8.30? I can't make an earlier one as already have a school board meeting then. Maybe @markgalbraith you could write up the pros and cons from your perspective in this thread and @mikestringfellow and I can do the same. That way others can read it and may have questions or opinions that can feed into the discussion, even if they can't make a meeting. If we can get consensus at the meeting then we could note the reason why and make a decision via Loomio.


Mark Amery Sun 18 Dec 2016 7:51AM

That would really help to make a clearer meeting. I am sure we're all a bit pushed, but also feel its vital.


Mark Amery Sun 18 Dec 2016 7:52AM

I'd also suggest that is posted here so those who can't make it can provide some written comment - that is the strength of this platform. We could even made a final decision here.


Mark Galbraith Sun 18 Dec 2016 8:48AM

Homes for People [H4P] have a website you can check out, they provide housing using the NZ Housing Foundation affordable equity programme. This is a set of agreements and relationships that enable H4P to arrange a mortgage for households to a level that they can afford and then the rest of the house price is made of up of trust funds or equity. The household must own at least 51% otherwise they won't proceed. The household then over time re-finance and buy out the trust ending up as 100% homeowners. This is a way for lower income households to buy a house without the deposit/income to get a normal mortgage. Generally H4P achieve the additional funds/equity by building new homes using donated or cheap labour, materials, professional services etc. The intellectual property and relationships with Kiwibank that are part of the affordable equity programme are very carefully guarded by the NZ Housing Foundation so there are few entities that can provide this.
In our case the arrangement would work like this; firstly we would enter into an agreement with H4P involving a memorandum of understanding and an investment agreement. H4P would then complete a sale and purchase agreement with the McCleods [sp?]. Raima and Pete would enter into an affordable equity agreement with H4P. H4P would then arrange mortgage for this amount with the bank. H4P would assist in running a give a little campaign [for R&P] to maximise their deposit. The remaining funds required would be raised through people buying shares in Paekakariki Housing Ltd. After ten years H4P would look to refinance Raima and Pete into the rest of, or a larger share of, the home [at market rates]. New investors would be sought to make up the balance or the property sold and proceeds returned to R&P, H4P and Paekakariki Housing Ltd and thence to shareholders.
Capital gain would be shared with R&P as a function of their % ownership, the rest is proposed to be paid out by H4P as a 4% p.a. return to Paekakariki Housing Ltd, $20,000.00 paid to H4P and then balance [if any] shared between H4P and the Paekakariki Housing Trust. This arrangement would need to be approved by H4Ps trustees - the other option discussed is a simple 50/50 split of capital gain. The exact nature of this will be negotiated but H4P in effect need to be 'paid' for us using their IP so they can continue to be sustainable and keep providing the service. However any money they do receive from this project will be ring-fenced to be spent within Kapiti [not necessarily Paekakariki].

  • So we still need to get shareholders to buy into Paekakariki Housing Ltd - this has not changed. We still aim to provide a 4% p.a. return - this has not changed.
  • Raima and Pete would be buying their own house - this is the number one change and indeed I believe the best outcome possible.
  • 'Us' as in the Paekakariki yet to be formed Housing Trust would receive a lesser benefit from any capital gain.
  • What are, in my opinion major issues,such as finding a guarantor and negotiating the mortgage with the bank are no longer issues with this setup.
  • There is some risk in that if for some reason H4P defaulted on bank obligations [they do not have loans currently though] the bank may come after their assets which include the house. This is being clarified by H4P through NZ Housing Foundation and Paekakariki Housing Ltd would seek to become secured creditors [legal advice to be sought on this].

My opinion is that if we can get this arrangement to work then the outcome for R & P is undeniably far better than our original model and the fact that they are buying their house makes it not charity but rather a sustainable model for the future.

@tinapope I think you should be devils advocate and ask some hard questions here.
I will answer queries throughout the day tomorrow - so please ask - there are no stupid questions!


Kerren Hedlund Sun 18 Dec 2016 9:46AM

Have we asked @raimakingi and Pete what they prefer? If not, who will do this? Is the issue for them, are they willing to take on a mortgage and be homeowners or do they prefer to pay rent and be part shareholders with a 4% return? What about rates and other fees, who pays this?

J and I have always preferred R&P to own their home, and not pay rent, but pay a mortgage. It felt as if, while we could provide safer tenure, they were still beholden to landlords and the charity of others. We are still not so clear why with PHT taking out the loan, the "rent" Raima paid would not be buying her more equity (% principal, %interest and other costs). So Paul perhaps you can explain this again.

However what is clear is that PHT could not get them a mortgage so this was not an option for us. HFP can.

HFP is not investing any money it appears. Rather HFP is giving their time, relationships, products, and access to mortgage. So we are "paying" 20,000 or half of any gain to them, which they will use to continue the effort in Kapiti. Yes it feels we're (PHT) a bit sidelined but that is just a feeling because in the end, the Trust gets started and some experience, with reliable partners (HFP/NZH which will also help with fundraising), a home for Raima, and our shareholders their return. And maybe we get some more street cred by partnering with HFP/NZH that it makes it easier to get our charitable trust status, as we know this will be difficult giving the Queensland precedent and the fact other trusts are being refused entry into the social housing providers network.

I think also we have to remember we are experimenting here, and this may not always be the model we use in the future. And we might turn around almost immediately and with Tina's other investors find another home for someone who needs it [we haven't even started offering the service yet!]. Or do another house with Dwell as a partner. Or one on our own.

@mikestringfellow what does Allison say about HFP? She's already said she can't help us out in Feb but perhaps asking her what she sees are the advantages of working with Dwell over HFP if we were to delay?

@tinapope if we did delay, aren't we promising a return to our 4 bridging investors to pay for their inconvenience? Will this end up being 20,000 (5,000 each or more) as well?

Depending on the time, I may not make it on Monday as Paul H says, we've scheduled a Community preparedness meeting at mine at 7. But Justin will come.


Liz Kennedy Sun 18 Dec 2016 6:50PM

I can come tonight

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