Good Stewardship
Jan 28, 2022

Community Finance Update

In the last edition of The Good Investor, we provided details of the first Community Bond that we had issued to support The Salvation Army in the delivery of 118 new homes across three sites. We are thrilled to report that all those homes are now occupied with whan̄au, many of whom were previously homeless. All three sites were blessed with dawn ceremonies, and recently there was a wonderful celebration led by The Salvation Army and Waikato Tainui at Flatbush and Westgate, was also attended by the Prime Minister and Minister of Housing.

The team at Community Finance is very pleased to have got off to a good start but there is a lot more work to do. Since we last provided an update, the social housing waiting list has grown even more and is now heading towards 24,000 households. As we seek to increase our collective response to this crisis, we are pleased to report a new Community Bond has been issued, this time to the registered charitable Community Housing Provider called Community of Refuge Trust (CORT).

Two KiwiSaver providers have invested more than $8 million to finance and build new homes for families in need. Pathfinder Asset Management (Pathfinder) and Simplicity have each invested $4.1 million in the latest Community Bond offered to the market for use by CORT, which originated from Ponsonby Baptist Church and is a very successful services provider with a strong track record of assisting households where mental health is a challenge.

These new contributions are part of the delivery phase of The Aotearoa Pledge, an initiative aiming to raise $100 million to address New Zealand’s housing shortage, to which both Pathfinder and Simplicity have committed.

The CORT Community Bond continues this momentum by reducing the cost of debt for CORT and accelerating the supply of social housing in the west Auckland suburb of Massey and in Puhinui Road in Manukau.

Pathfinder CEO and Director John Berry says:
“At Pathfinder, we believe KiwiSaver should generate great returns for investors and also positively benefit our communities and planet. To achieve this, we have embedded social and environmental impacts into our investment process, alongside financial considerations.
“We're delighted for Pathfinder KiwiSaver to find alignment with Community Finance and CORT to help address the critical shortage of warm, affordable houses for New Zealanders.”
Simplicity CEO Sam Stubbs says:
“It’s simple. You can make money and do good. It’s why Simplicity exists. Our KiwiSaver members love that they’re helping house families in need, while getting a fair return on their investment. It’s a wonderful win-win.”
The Community Finance platform enables investment in housing projects through Community Bonds which provide low-cost finance to organisations such as CORT to reduce construction and holding costs to build more homes and help more people in need. For Pathfinder and Simplicity investors, the CORT Community Bond will pay a financial return of between 2% p.a. and 2.50% p.a.
Paul Gilberd, General Manager of Community Finance, says:
“The private sector has stepped up to help address New Zealand’s housing shortage and ongoing collaboration is key to ensuring work to build more homes continues. In one month, we have raised $71 million for The Aotearoa Pledge, and now $8.2 million has been immediately deployed to deliver new homes to families and people who need them most.
“It’s proof that the commitment of KiwiSaver providers, fund managers, businesses and foundations can help to move the dial for building more affordable homes and help to meet the housing needs for future generations of Kiwis.” Gilberd says this latest Community Bond highlights how the Community Finance model is effective at financing large scale affordable housing developments and doing so at pace, without compromising the quality of life for households and communities. “We are very excited about the future as we continue to mainstream impact investment in Aotearoa. We are also very pleased to have been acknowledged by our peers as the Best Impact Investment Fund in the Mindful Money awards last month. It is a sign from a very well-respected organisation that we are heading in the right direction.”

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