HOUSING PROBLEM

Dominion, Volume 12, Issue 260, 30 July 1919, Page 8

HOUSING PROBLEM

WANTED-700 DWELLINGS

EFFECTS OF THE RENT LAWS

CAUSES OF THE SHORTAGE

NOT ATTRIBUTABLE TO LESSENED BUIIMG A RUSH OF BUYERS WITH ■ MONEY "i don't know what the end of it is to be." In precisely the same terms three oi the leading land agents in Wellington expressed their complete bewilderment in contemplating the housing question. Tlieso gentlemen were Hue.; uf Ihe hading men of the city in their business, and they were all agreed as to the extreme dearth of houses and of the extreme need for action on the part of some person or body to provide a better supply of dwellings for the people in this city. Facts discovered do not support the popular theories that the shortage of houses is due to war causes having reduced the amount of building being done in the city and the suburban 'boroughs. The building rate has been at least normal, but there has been an abnormal increase in the population, with the result that there is an enormous unsatisfied, demand for houses.

Overcrowding, Overcrowding is one of the most deplorable of the results of the lack of housing. It is going on everywhere, being worst in the poorer quarters of the city, but it exists in the best suburbs. In almost every street there are houses occupied by two. families, and in some streets practically every house is so used. All the available information goes to show that the- landlords are not the chief offenders in this overcrowding, but that, they are actually sufferers by it. The overcrowding is done in nine cases out of ten by tenants who, having taken houses the rent of which in full they are unable or unwilling to pay. sub-let 6ome of their rooms to reduce their own expenses. Only in rare cases is the landlord the party who tries to make profit by overcrowding. It is more often the case that the tenant, against the wish of the landlord, takes other people into his house. To prevent this practice, stipulations have been inserted in many leases, and net infrequently the tenants have broken the contract in this respect. Quite often the tenants who have been the worst offenders, so it is said, in overcrowding their tenements, have been working-claw people, who have done it iu order to live themselves rent free.

Worse Than Ever. For at least ten years there has been uo plentiful supply of houses for rent in Wellington, but the position has never .in that period been anything like 60 bad as it is to-day. During the war it was hoped that the position, then bad, would improve when the camps dispersed and some of the Government war activities ceased. Things have almost reached i slalo of normality in Wellington now, but the housing problem is worse than it has ever been. Time was when the man who had a house vo let used to ask the agent to find for him a suitable tenant. The agents never get more than two or three marketable houses a year to let nowadays.- Before the war it was not uncommon for an established agent to have as many every week. The man who lias a house to let knows that he can find a host of tenants by putting one advertisement in the newspapers, and if ho has the right of makir.S his own bargain he may bb able to extract a very high rent, and obtain such terms as flic payment of rent in advance, or even of a bonus. Because a landlord can choose ins tenants with such freedom the man with a young family of four or five children -can get no house at all anywhere if ho is unlucky enough to be in the market in search of one. Five ami six-roomed houses are most in demand, and, roughly' speaking, they are unprocurable. Fortunate, people do lind one by chance now pad then, but these are places that never, go into the market for competition. One of the troubles of owners and agents at present is with • outgoing tenants who wish to nominate I heir successors. A man going out of a house may wish to nominate a friend to succeed Jiim in it, or he may wish to make this sort of arrangement for gain—either by taking a bonus, from the incomer, or by selling to him the furniture in the house at his own figure. Arrangements of this kind aro extremely common, and often they are a source of considerable annoyance to the owner or his agent, who may have ideas of his own'about'the sort of tenant he wants in ills house.

Rent Legislation Fails. No reliable information about tho rents payable is available, because nobody in business as an agent has any largo number of houses in his hands. The special legislation passed early in the war to restrict rents to the pre-war level has pruved to be of little avail for this purpose. The rapacious landlord can get what he likes for his houses, and the tenants who. fall into liis clutches are sometimes bled sorely. On the other hand the legislation is unfair in operation against the landlord who tries to observe it. It may be true tluv; the landlord drawing rent is entitled from the politician's point of view to receive interest only on his original investment, and not to receive interest on the appreciated'value of his property. That is a question for argument, which need not be further discussed. But it is urged strongly on behalf of the landlord that while., he has to pay increased charged for all repairs, which have to'be,made to all houses whatever their condition, aud also while he has to pay increased rates, he ought to be allowed at least to recoup himself for these increased costs. It is urged also that the price of money in other investments tas gone up, and that there is no sound reason why the landlord should be denied the right to benefit by the advance. For a house built since the war began the owner is entitled to charge a maximum of eight per cent, of the cost as rent. There is general agreement among those who have to deal with the house-letting business that this is not an adequate return on the investment, and that in order to allow the landlord six per cent, on hi* outlav he must receive at least ten per cent, as rent. Six per cent, is the rulinsr rale for investment on first mortgage, aud there is not the remotest risk or the smallest responsibility in such an ii.vestment, while the management, of houses to let is highly vexatious. It. appears that most owners of houses have compromised by partial observance of the legislation; 'hey have mostly refrained from raising i he rent on a tenant in occupation, but have taken the opportunity of reviewing the rent when the houses have fallen vacant. The Tenant in Possession. One important effect of the legislation has been in the protection it has afforded to tenants against eviction. Unless an owner requires a house for his own or his family's occupation lie cannot now dispossess ,a tenant who has regularly paid his rent and faithfully observed the conditions of his lease, for the tenant in possession this is a. splendid arrangement, but it is of doubtful advantage to the tenant in search of a house, for the. owner who thinks that some day a man mav como along and offer him a good price for his house will not let a tenant in who may be difficult to dislodge when the time comes lo give the now owner possession. It is possible to get a (ennui out under, such circumstances, but. the process may mean delay, and delay mav involve, and sometimes does involve, the loss of a sale. Very special protection was given by legislation to returned soldiers and their families. It is practically impossible to dislodge a. relumed soldier tenant. Some agents say thai a returned soldier need not pay liis rent if ho does not choose to do so, and still it is impossible to get him out. This is not the general opinion, however, which is that such a tenant, can bo made to pay, but that he can not be turned nut of a house under any circumstances. Again, this is very well for tho man who is in possession, but very hard for

tho man who wants a house. The outcome of the funny law is that no relumed soldier can get a house to rent.- His only chance is to buy a house.

Buying and Selling. As already told, this difficulty about fretting possession of houses in occupation by tenants is out) lacing every idler of a properly, or perhaps the buyer, if he has been so unwary as to complete the deal without making sure as to when he can have the house; Land agents say that they have to do twice as much work in connection with their business as they ought to be required to do, and this on account of tho law protecting tenants against owners. Not only have they to find purchasers for properties given to them for sale, but they-have to get possession of the properties as well, and these latter tasks are often harder than thoso of selling. On account of delays in obtaining possession, contracts of purchase are sometimes repudiated, and if the buyers had much free choice of houses to buy, '.many more contracts would be broken.

More Buyers Than Sellers. The impossibility of obtaining security 'of tenure in rented houses has lorced hundreds of people into the market as buyers of houses, tiid there are more buyers than sellers. And the buyers all have money to pay. The £50 deposit is never heard of in these days. Some of the biggest people in busiuess as sellers of houses find that thev can sell all the houses given to them on a "cash over mortgage" rule, and they seldom do business on any other basis, Other agents do business with buyers with less money. Y'cars ago a buyer could get a good fiveroomed house if he had JJIOO. Tho man with .£IOO or ,£l5O may still be able to buy a modest property, but he will get a much better choice if he has ,£250 or £300. It is impossible to borrow in Wellington on second mortgage, and if there has to be a second mortgage it has to be carried by the vendor. Even under these conditions laud agents are doing 'boom business. Last year some of them made record figures, and this year they are doing better. As one of them said the other "It is a good time to be a iand agent."

Cost of Building. Prices are controlled always by the cost of building new houses. Even at the present values, which are often said to be inflated, the buyer will do just about as well by buying a house already built as if he elects to build a new house for himself. Tho common quotation for the cost of building a house is .£2OO a room, but the real cost often proves to be much higher. For a tastefully-built house, with nil modern improvements in interior decorations and conveniences, and with fairly largo rooms, the rate seems to bo about 0)250 a room. The cheapest quotation given for the smallest five-rcoroed house, built, with the utmost economy, was ,£750, These are all prices for wooden houses. No estimates are procurable for other materials, but it is generally agreed thai prices for brick are much higher. The cost of concrete seems to be still a matter for argument. At these prices the speculative builder is not doing much business. No man will put up a house now unless lie knows to whom he is going to sell it.

How Many Houses? On every hand there is a demand that the Citv Council or the Government should embark on a big building scheme to supply the great need of Wellington. H is stated tnat the present state of affairs is not even good for tho present owners of houses, it is also agreed by everybody that hundreds of houses will be required to supply reasonably the demand for houses in Wellington. ■ ihe estimates of the number required varied from ,500 to 700 houses. This does not mean that there are 700 families without a roof in Wellington, but there are many families sharing houses, or living in rooms, who would be only too glad to take houses if they could get them. There is some difference, of opinion as to what the City Council should do with the houses when thoy are built. One house agent suggested that the council should rent the houses, leaving the private builder to supply the market for purchasers. Another had. the opinion that whatever the council did the effect on the market would be unappreciable, nnd another said that the council would let into "an infernnl mess" if it attempted to lease houses. He put his cose this way: "The ordinary tenant reckons the private landlord fair gamo; how much worse will the tenant 'be against tho council, knowing how easy it is to impose on public bodies always?" Theso are all questions to be decided by-and-by.

No Speedy Relief. But great as the need undoubtedly is, there seems little hope of speedy relief from the present position. If the City Council had all its plans made now, had nil the ground subdivided and prepared for houses, it would not be .able to increase greatly the number of houses to be built in the- city in the course of, say, a year. There are no carpenters idle to-day. Buijding operations are hampered at present by the reduced railway eervices and the stoppago of the carriage by rail of timber, but still there are no carpenters idle. If the situation'is to be relieved soon we shall need many more carpenters, more bricklayers, moro painters, and moro plumbers. These workers are reported to be in short supply in "Wellington. Most of the men are back in the country from overseas now, so that the reason previously giventhat the men wpre away fighting—will not hold now. It is suggested that the tradesmen are not going back to their trades. It is known that some of them have gone on the land, and others are working as clerks in branches of the Defence Department. The Building Figures. Inquiries have been made as to the actual number of houses built in the war years and for some" few years before. In the city the figures were as follow:— Year ending March 31, 1910 221 dwellings 1918 220 1917 3G9 191G 302 „ 1915 248 1914 225 1913 196 „ 1912 290 • „ ' 1911 379 In the current year there has been more building activity, In the past two years there has been a reduction in building work, but this can all be accounted to shortage of men. Tradesmen have all tho time been at their -wits'" end to get contracts through. But in the earlier years of the war there was an actual boom in building, and even in the worst war year there was more building than in the year 1912-13. twb years before the effect of the war began to be felt, in the. smallest degree. For the borough of Knrori the figures for the years have been:—Ending March 31, 1919. 4; 1918, 5; 1917, 5; 1916.'1 a: 1915, 11; 1914. 8; 1913, 11: 1912. 1G; 1911, 18. Slight diminutions arc shown for the later years of the war, but in the case of Karori this may bo accounted to other causes. Figures for Miramar are not obtainable, but during the past four years of the war there has been just twice ns much building in tho borough a.s in the previous four years. Tho year before last was a record, nermils being given in that year for buildings estimated to cost i 43,000. Tho houses have been of good class, and they have been built during the war period at an average rate of about 30 per year. This higher building rate in Miramar more than compensates for tho slight reduction in Knrori. In Onslow borough there has been littlo or no building since the railway service first became precarious a. year or two aw. But beforo that time building had been going on rapidly, and the check which war conditions have put on settlement, in the railway suburbs has undoubtedly been one of the contributing factors in the present overcrowding of Wellington.

The Question of Blame, The fads in this article have been collected from reliable sources, and they are probably conv?t As will appear, the position is not nno-on which one may confidently speak of sure and quick remedy. Nor is it fair to lay any srreat amount of blame on the City Council, or anv other body for the position as it exists. Much is made of the poor class of some of the houses nt present used for dwellings in Wellington, but for the existence of such dwellings the City Council

cannot in fairness be held responsible. The City Council lias no power to order any person to demolish a dwelling. On the certificate of the health officer the council may prohibit person* from living in mi insanitary building, but more often the order is (hat if repairs are effected the dwelling may still be used. It is quite safe to say that there is not a street in the city from which a story of hardship cannot, be heard from some tenant who has to quit, or from some owner who is unable to get possession of n property urgently required by himself. In many streets are houses shared by far too many people. More houses is the only remedy, for, thero is little present prospect of thousands of the population of the city moving off to some other town. One of tho evils of ihe present scareitj of houses has been lhat people of very modest means and modest incomes have been forced to buy, and some of them have bought houses at high cost. It is said that some have bought above their means. These peuple are carrying second mortgages. The Mortgages Extension Act must expire soov, and when, those second mortgages fall due the present possessors of the buildings will have to get the money from somewhere, or givo back the properties to' the former owners. There is a danger that some of I the less fortunate will be unable to secure a. renewal of the.loan, and then the [lack of hoiws will begin to manifest some of its results.

AT PETONE AND LOWER HUTT POSITION VERY ACUTE. The question of housing at Petone is and has been for some years past, in common with Wellington city, a very acute one. At the present time not a house is available, and in numbers of cases people, and even families, are 'of necessity resorting to living in rooms, as the only possible means of securing a roof over their heads. During the war period building operations in Petone were practically at a standstill, and not more than twenty houses were erected during that time. In fact, there has been no great building activity for eleven or twelve years pSst. During the period 1903-01-05, when there was a land boom, quito a number of houses were built, but by 1807 building had resumed its normal position. For the past ten years, owing to the high cost of materials and various other reasons, building has been decidedly slack, tnd not more than one hundred houses have been built during that period. There is plenty of land available for building in Petone, and a good deal of it jg, Government owned. The Government owns, besides a large block behind Patrick Street, the Wilford Settlement, of at least 1400 sections, all of which are suitable for building purposes. The Mayor of Petone, Mr. J. W. M'Ewnn, in conversation, with a.Dominion reporter yesterday, made a few remarks on the subject. He thought it most unreasonable to expect local bodies to carry out schemes for erecting workers' dwellings. As far .as the Petone Borough Council was concerned, it was absolutely impossible. Tho Government should undertake the whole thing as a national undertaking. Mr. M'Lwan disapproved of the oresent scheme of State advances to settlers, where assistance was granted to the extent of. only threefifths of the total value of the property, which meant (hat the remaining twofifths of the value had to be found by tho builder. At the present time pnvato building companies in Australia were able to make advances covering the whole cost of building, and if private coim>anie.; could do so surely the Government could do likewise. Mr M Lwan said that private entei prise had been found wanting in tho matter of building, and the only solution of the problem that he could fee was for. the Government, to go thoroughly into the question and bring down a comprehensive national scheme for building houses, preferably of a. standardised pattern. The position at Lower Hutt is also an acute one. Rents are abnormally high, and it is impossible to obtain a house. 4* the present timo, however, there is miite a considerable amount of building ■Join" on. During the past ten years almost 200 new houses'were erected. m the Lower Hutt district.. Even during the war'building had proceeded steadilj. Id face of the very high rents existing, people found it cheaper, even with the present high cost of materials, to build their own homes, ' The Mayor of Lower Hutt, Mr. h. 1. Risliworth, in conversation with a Dominion representative yesterday, related some glaring instances of the uuite shortage of houses. He knew of one case of a woman with four daughters whoso house had been sold over her head, and who, after searching vainly for a house for many days, had finally to no i content with rooms. Referring to tho present high cost of building, Mr. Kisli-H-orth said he knew of one case where it was proposed to build a five-roomed house for JSSSO just before the commencement of the war. When the war came along building was postponed, and jusl. recently when tenders for building tho same house were called the lowest tender received was X 1470. This, together with .£330 for the section, made the total cost of the five-roomed house and section £1800—an exorbitant price. The ordinary wage-earner could not afford to pay prices like that for a house, Tho only solution to tho problem that ho could see was for the Government' to take over the matter and to make a big national building scheme. It was not fair to ask local bodies to carry out any building scheme. It was impossible for the Lower Hutt and Petone Councils to think of such an undertaking in face of the heavy cost of upkeep of main arterial roads and contributions to the Hospital and Charitable Aid Board. At the present time the lowest rent for the smallest of four-roomed cottages was 15s. weekly, and the rents were generally nearer £1 or 255. for the same cottage. Quite a large amount of building has been carried out in Lowe Street.in the past ten years, and the houses built were mostly of a good class. Numbers of new house's had gone up in the Western Hutt, and Hautana Square had been practically all 'built on during the last few years. There is any amount of good building 'land available in the Hutt district, and before very long the surplus population of Wellington must inevitably come out to the valley. Out of an approximate total area of 3500 acres in the valley, only 500 acres have been built on, and the population at present is equal to only U to the acre. The Goyeminent owned a large area of suitable building land in the Hall-Tone?. Settlement, which, although rather far removed from the railway nnd centre of population, is undoubtedly most suitable for building."

A BUILDER'S VIEWS CESSATION OF SPECULATIVE BUILDING. Mr. W. H. Bennett, a member of tho Citv Council, and by trade a builder and contractor, gives one outstanding reason for the shortage of houses in Wellington, whi'in shows that to some extent at all ev.'iifs the problem has arisen through ri'cimistaiicpo which no 0110 can control. "Ordinarily," said Mr. Bennett, "the speculative builder caters very largely for lie normal increase in the population. He secures a section or a. block, and builds a house or a number of houses on monov obtained from the bank at i) per cent, or 5 per cent., and, having erected the iiuuoes. he sells them for a small deposit, the balance payable in monthly or nunrtcrlv payments at 1\ or 8 per cent, -emmgh to clear him and show a moderate iirofil on the transaction. Now that inonev is ilcarer-that. is to say the rate of interest charged by the banks is too much to allow him to operate and show a uroutable return—ho has practically censed to operate, and consequently, although the. demand is excessive not even the normal amount of residential ■ buildin:.' is being done by the speculative builder He can do bettor in other avenues of tho building trade. The wluue. trouble, as far as he is concerned is that which occurs at the jumping-off mini— getting advances from the bank at n low rate of interest. "Then." continued Mr. Bennett, there are other causes lo contend with, which have ihecked the activities of the specula 'ivg builder-tlie high cost of building iiuterial and the difficulty of obtaining labour. It is all very well for certain members to talk wildly at the council to hie about the shortage of houses, but until thev know what they are talking about thev should go slow. It is not a matter than can be settled by a lot of 'blatherskite.' I don't suppose, my of them know a 6 much as I do about tho

building situation in Wellington, and I ssiid nothing during the debate on Friday evening. "1 voted for the .1:10,000 building scheme for the simple reason that; the council had a block of land at Miiranui (between Ihe hot salt-wale.- baths and tho uuarry; nil ready. It is on (ho Queen s Drive, and has water and drainage right up to the block. There was no great risk-i; is a sniail block—and what they did there would give them valuable experience in connection with a larger sclinue. Supposing, however, that the council took the larger block at the bay (originally set aside for tramway purposes, and to use which for dwellings a specii! Bill had to he passed by Parliament last session), they would have to le.vil the land, drain it (a very difficult nintUrl, road it, and lay the water pipes out to it. That work would take a long time and a good deal of money. If they made a. start, 1 advocated a block where the engineering work was already done, and that is the case at Maranui. "As to the small speculative builder, he has practically been knocked out by the lush cost of material and the labour difficulty. What work in the erection of houses is now being done is for special clienls." Mr. Bennett also pointed cut that the I csii.'KPftion of people in houses was not I one that tho landlord was to blame for, : as some people would have the public beI lieve, hut was the fault of the tenants, i wl;i>. in order to live rent free or as nearly ront free as possible, were sub-let-tins rooms,all over the city. Rent might be high, but instances could be quoted where people had. by sub-letting rooms, not only been able to live rent free, but had actually made money out of it. That stale of affairs was not always brought about by the landlord, who, after all, had to meet the rising cost of living and rates as well as anyone else.