Affordable Rental Pathway
The Affordable Housing Fund’s Affordable Rental Pathway offers $50 million of grant funding to not-for-profit organisations to deliver newly built affordable rental housing.
About the Affordable Rental Pathway
It’s often too expensive to build and sustain new housing and offer rent at a rate that is affordable for lower income people and whānau. The Affordable Rental Pathway helps to address this by offering funding to make these projects financially viable.
These affordable rental homes will be for lower income people and whānau who can’t afford a market rent but can’t access public housing.
Funding is targeted in locations with the greatest need for an increased supply of affordable rental for those on lower incomes, including:
- Tauranga-Western Bay
- Wellington metro (including Wellington, Porirua, Lower Hutt, Upper Hutt and Kāpiti), and
Not-for-profits include organisations such as community housing providers, iwi and Māori housing providers, councils, and charitable trusts.
Eligible organisations and developments
To be eligible for funding through this first round of the Affordable rental pathway, an organisation must be a not-for-profit organisation that can demonstrate capability to develop, maintain, and operate affordable rental homes.
Organisations must be able to identify a specific project in one of our target areas, where they:
- intend to create new supply of privately-owned rental homes, including by developing new homes, purchasing turnkey homes off the plans, or completing commercial conversions or redeveloping homes to an as-new standard
- have identified a specific parcel of land, and have a pathway to owning, leasing, or occupying the land, including whenua Māori
- intend to offer rents that are affordable for their target cohort, which they will need to demonstrate.
Projects must deliver a minimum of 10 homes (dwellings) in Auckland and Wellington metro, or five homes in other target regions. These homes must be offered as long-term rentals to provide tenants with security of tenure, as opposed to short-term leases.
For the Affordable Rental Pathway, dwellings include detached houses, flats, units, townhouses, apartments, and papakāinga, which may be stand alone or joined together. Dwellings also include parts of premises that are largely self-contained. For example, a room or rooms with a kitchenette and an ensuite that the tenant has exclusive rights to occupy, alongside the shared use of common areas and facilities. There must be at least one Residential Tenancies Act tenancy agreement for each dwelling.
For more information on eligible developments, see our guidance below.
What will grant funding from the Affordable Rental Pathway cover?
Grant funding through the Affordable Rental Pathway can cover costs relating to the purchase and/or development of affordable rental housing, including costs relating to:
- pre-development (including professional services)
- the house construction/vertical build
- project support costs
- feasibility studies where these can be directly attributed to the build of this housing.
- ongoing operating costs
- standalone pre-development costs of other projects (including feasibility studies) or
- any costs associated with wrap-around support services.
The amount of funding will vary, depending on the contributions of the applicant and other financial institutions, and based on a demonstrable need. We would expect to fund up to 50 per cent of the project costs.
How to apply
There is a two-stage application process for funding. First, you need to submit a Registration of Interest. If your Registration of Interest is successful you’ll then be invited to submit a Request for Proposal.
Registrations of Interest have now closed. We will be contacting respondents selected to proceed to the Requests for Proposals stage once our evaluations of the Registrations of interest are complete in mid-September.
Request for Proposals
Those who have submitted a successful Registration of Interest will be asked to provide a proposal for their affordable rental development.
A detailed proposal must include:
- how their proposal is aligned with housing need, including who they’re targeting and how they will make sure rents will remain affordable for their community for a minimum of 15 years
- specific plans relating to their housing development, including the expected scale and housing typologies, how they will be developed, and development finance
- a description of how their affordable rental development will support social, economic, cultural and environmental wellbeing of their community, and
- the cost and risk to the Crown, and any contributions by other organisations or entities.
For more detail about the application process and eligibility, you can download our Guide to registering an interest in the Affordable rental pathway (see below).
Future funding rounds
We will be making further announcements about how the Affordable Housing Fund will support additional provision of affordable housing, including locations, types of housing, and opportunities to attract new or increased investment to support affordable housing.
For more information you can contact us at AHF@hud.govt.nz