OCHT Rental Streams

The Trust has three separate rental streams across its portfolio of 2,400 properties. The rents and who sets the rents are shown in the table below:

Income Related Rental (IRR) and Income Related Rental Subsidy (IRRS)

New OCHT tenancies are almost always MSD income related rent tenancies. This means their rents are appraised at the market rent.  Each year OCHT carries out an independent market rent review by a qualified residential valuer. OCHT supplies these rents, by property, to MSD who approve the rent.  MSD calculates the Income Related Rent, which is the rent the tenant actually pays to OCHT, usually around 25% of their income.  MSD top up the rent paid to the landlord to the agreed market rent.

MSD annually review the Income Related Rent, or if there has been changes in income or circumstances, and they will increase or decrease the rent paid by the Tenant or the subsidy paid to the Landlord. OCHT plays no part in determining the portion of rent the tenant pays.

Grandparented Tenancies

This rental stream includes tenants who transferred to the Trust from Christchurch City Council on 2 October 2016 through their existing tenancy agreements.  If tenants are in this rental stream they will experience no more than a net 5% increase in rent per annum.  For the last three years, rent increases were 3.9% in 2017, up to 4% in 2018 and 3.9% in 2019. Many tenants in this rental stream may qualify for an MSD accommodation supplement to assist them with their rental costs.

Discretionary Rentals

At the time of applying for housing, and if it is determined that the applicant is not eligible for an MSD income related tenancy, OCHT may offer a discretionary subsidised rental at the level of up to 85% of market rent. Each year OCHT carries out an independent market rent review by a qualified residential valuer to determine market rents. Many tenants in this rental stream may qualify for an MSD accommodation supplement to assist them with their rental costs.

A discretionary rental will never be lower than a grandparented rent for an equivalent unit, with the grandparented rent being a price floor.

Discretionary rentals will be used infrequently by the Trust as almost all new tenants are housed from the MSD Housing Register. Discretionary rents are approved by a Manager only.

Rent Streams Once Housed

Once tenants are housed by OCHT, they remain in the same rent stream from the start of their tenancy until the end of their tenancy. On very rare occasions there may be a significant and persistent need to relocate or transfer a tenant. These tenants may be eligible to be rehoused from the MSD Housing Register, if accepted onto the housing register by MSD. This would result in the tenant signing a new tenancy agreement with OCHT which would result in the tenant moving to another property under a different rental stream.

OCHT Tenancies by Rental Streams*

*The Pie chart breakdown is based on May 2019 data

Implementation of Annual Rental Increases

Tenants on a grandparented or discretionary rental stream have a clause in their tenancy agreement committing to an annual rent review, as opposed to the Residential Tenancies Act 1986 allowing for a review every 180 days. This occurs on or before 1 May, to allow for the 60-day rental increase notice period required by the Residential Tenancies Act 1986. New rents will take effect from the tenants first rental charge in July.

Determination of Affordability

Income Related Rent

For IRR tenancies, the Trust relies on MSD’s Income Related Rent assessment criteria to ensure the rent is affordable based on the tenant’s circumstances. This includes scenarios where the calculated Income Related Rent is either at or above a market rent, resulting in the market rent being charged, as a cap, to the tenant.

The 85% cap that applies to discretionary rentals does not apply to the IRR rental stream. The Trust will charge up to 100% of market rent if MSD determine the tenant has the income and asset levels to support a full market rent being charged.

Grandparented and Discretionary Rentals

For grandparented or discretionary rentals, the Trust will offer a subsidised rental, charging a rent up to the present cap of 85% of market rent. In addition to the Trust subsidy for this group of tenants, OCHT rely on government, through MSD to ensure rental affordability through the provision of Accommodation Supplement to tenants.

The Trust does not review tenants’ income and assets to ensure rents are affordable as OCHT does not have the right to directly access tenant’s income information in the same way that MSD can.

On approval, the Trust may charge a rent above 85% to a non-IRR tenant, e.g., for a non-social housing tenancy or a commercial lease to another organisation.

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The Ōtautahi Community Housing Trust
61 Kilmore St,
Christchurch.

Hours: 8.30 am-5.00 pm, Monday-Friday.

Postal: PO Box 53, Christchurch 8140

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