Time to make an important decision - urgent call for a meeting
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?
Paul Hughes Sun 18 Dec 2016 11:42PM
Very encouraging Tina
Mike Stringfellow Mon 19 Dec 2016 1:42AM
I have spoken to Brian Donnelly at the NZ Housing Foundation. They are in discussions with Housing for People but they have no "rights" to the housing product. Housing Foundation generally works at scale but would look at a one off. However, there is nothing stopping us, once we get a trust set up approaching them ourselves.
In addition I think it is unlikely that finance would be settled by mid-Jan if we did partner with HFP.
I also spoke to Alison Cadman at Dwell. She met Darren once a year ago. Darren I believe misrepresented his relationship with them as well.
I feel Darren has misrepresented what the situation is and would not support any partnership with them at the moment.
Mark Galbraith Mon 19 Dec 2016 2:15AM
We live at 22 Te Miti St by the way
Paul Hughes Mon 19 Dec 2016 3:47AM
Thanks Mike
Peter Handford Mon 19 Dec 2016 3:55AM
I haven't been following things very thoroughly - so may be a bit out of line but a few points...
We are basically looking at a shared ownership model it seems? The standard agreements used by the Queenstown housing trust look quite workable for this - could we just use these, with the Paekakariki housing company being the part owner and Raima and Pete the other part owner. The attached agreement seems to deal with most of the issues of sales at various points etc.
Have we discussed with kiwibank or other banks about getting a mortgage for the company, and a mortgage for raima and pete? If we can get a mortgage and have the agreement, do we need another entity involved.
One of my big concerns is that we could quite realistically end up with negative equity - if the long predicted slump in house prices occurs (it may not occur - but it could). We need to understand what that means - and know how we would manage it.
In the end it all comes down to money - do we have enough for the deposit and servicing debt for a reasonable period?
Have we talked to the Paekakariki Community Trust. They are a charitable trust - could possibly be some legal means to work with them if there is a need for charitable status etc.
Look forward to discussing tonight.
Tina Pope · Sun 18 Dec 2016 10:07PM
First, meeting is 8pm at Mark and Andrea's.
Mark G has explained this accurately and I do agree that this is a good outcome for Raima and Pete in that they get to be co-owners.
My reservations arise from:
1. The high cost to the Trust - $20K plus half of the capital gain at the end of 10 years.
2. The risk of an having an unknown entity which we have no control over having a stake in the house which could be grabbed by banks if they go pear-shaped with developments in process (they currently have no debt but we have no guarantee that they won't do so in future).
3. The charitable donations held by HfP then are lost to Paekākāriki (although admittedly used on Kāpiti Coast) and the more difficult "sell" in light of that (and in light of the Deborah Marlow history here).
4. Darren made it clear he wanted to talk to the McCleods, the community trust, the community board, pete's employer etc etc. I feel worried he will muddy our relationships here.
4. My gut tells me not to partner with them. I think this is partly patch protection for me but I do feel that we have a good alternative partner in Dwell who comes at this from a completely different place. Compare "we're interested in supporting you and locals would retain decision-making" with "we want the story, we want to be paid for our IP, we want to be able to leverage off the equity in this house for other developments, we want a slice of future housing developments here". I commend them for working hard to maximise the benefits for their kaupapa. But I don't feel that the values are well matched and think we can do this without them.
I feel very confident that we can raise bridging finance locally to buy the house by 16th. I have just received a call offering $200K for three months at 1% cost. I have two others interested in exploring that option. Ideally I would be chasing 6 months finance to allow enough time to set up as a trust, explore the partnerships (including HfP, Dwell, other housing trusts, local investors and property owners, and directly with NZ Housing Foundation). We -and Raima and Pete - would have 6 months more to raise more funds so we're in a better position to keep ownership in the village with all the benefits staying in the village, so we can maximise them for our own kaupapa and people.
Raima is coming tonight and I have invited her to really stand in the place of what's best for her and her family and speak to that.
Looking forward to having this discussion tonight. Feeling confident we can do this one way or another given the responses to date on the survey and conversations I've already had.