STATE RENTALS

Evening Post, Volume CXXIII, Issue 122, 25 May 1937, Page 10

STATE RENTALS

LACK OF DETAILS

SCHEME OF FINANCE

SOME CRITICISM

Owing to the lack of details of con-1 structional costs and interest rates, there was a general reticence on the part of land agents and builders to comment on the rents, fixed by the Government for State houses. One land agent, who was interviewed, recalled the statement made by the Minister of .Finance (the Hon. W. Nash) in last year's Budget, in which he foreshadoVed the construction of 5000 houses at. a cost of approximately £3,000,000. He ' stated that under the Minister's scheme the average house would cost £600, but judging by the rents which vyere being charged the cost had worked out at more than twice that amount , It was true that overhead charges had been increased as the result of the Government's decision to restore wages and salaries to the level of 1931, but even when this factor was taken into consideration there seemed to be considerable disparity between the Government's promise and performance. Mr. Nash had also stated that the money for housing would be "new money." What he meant by this term had never been defined. Was the Government simply borrowing the money; from the Reserve Bank at an interest rate of, say, 3 per cent., or was it issuing credit in anticipation of being able to recoup itself from the rentals paid by tenants? It seemed to him that the Government was deliberately omitting essential details in order to escape from the dilemma of a policy of costless credit which was being fallaciously advocated by a large number of its adherents. It was up- to the Government to place the full facts before the people whose money it was spending. Until that was done one could not give an intelligent expression s of opinion on the rents which were being charged for the new houses. One could say, however, that there would be widespread dismay and disappointment at the figures which had been quoted by the Acting Prime Minister. "QUITE MODEST." "The Government rentals are quite modest," said another land agent. "They are lower than I anticipated, and I cannot see that they can wipe out the charges in 40 years, maintain the houses, and'get a fair rate of interest as well. "At present, while properties are ■selling well, and there is a distinct demand for the better type of house at from £1500 to £1600, houses for rent are practically unobtainable. I have had only one to offer in the last six months. Sections are not selling as freely as houses, probably owing to the high costs of home construction and the difficulties of finance. The Government houses will cater more for the workers when they are built. The salaried man will want something a little better and more roomy. . "What is the ordinary rental today? Well, the lowest rental for'any house is 355. For a comfortable five-roomed house the rent is from £2 5s to £2 10s. i ' ' ! ' "For flats owner* are continually being offered more than they can accept owing to the Rent Restriction Act, under which the rent cannot be increased tteyond what it, was on May 1 last unless a heavy expenditure on maintenance or improvements has been incurred. vßut there, are many secret agreements." ■ "The rents are reasonable in comparison with what has been asked for other houses of similar accommodation," the manager of a large firm of land agents stated. .. "They are higher than was expected, but that is because of the increased cost of material and labour largely due to the shorter working week." The- position of the houses at Miramar had a bearing on their rental value, he added, and the houses that were to be built at Johnsonville should be let for slightly less because they would be further from the city and on cheaper land. The demand for houses to rent was tremendous at the present time, and the land agents welcomed the fact that the Government had decided to supply homes. The land agents themselves had no chance of supplying the. present demand, and anything that would relieve them of the necessity of convincing disappointed homeseekers that homes were not available would be appreciated. PLENTY OF TENANTS. j While the rentals might be higher j than the'prospective tenants had ex-; pected, he added, the Government would have no' difficulty in securing tenants, and many more houses < would have to be built before the supply of occupiers ran short. The private builder had been afraid that the Government scheme would rob him of his livelihood, but it now appeared certain that there was still a fair field for the private builder who could build to sell. The Government was not providing homes for the man who had a reasonable deposit and could buy a home, and the builder could supply that man at a cost not very much above the Government rentals, because the man who wanted to buy. usually wanted a slightly larger home than the average Government house. There was little likelihood of sufficient demand to cause any big private building scheme, but there was also little likelihood of the" Government supplying all of the demand for rented homes He believed the Government would watch the market and restrict the building programme if 'saturation point appeared likely. A COLD DOUCHE. The hope that the Government would continue to build houses until it satisfied a reasonable demand was expressed by another Wellington land agent. He said that the ■■rents to be charged for the houses were more reasonable than those being charged by property owners at the present time. It would be very difficult and probably impossible to obtain a four-room-ed house.at a rental, say, of 30s a week from those on the market today. The landlord would probably expect £2 per week for the premises. "Despite this, however, it is a cold douche for those people who_ thought that they would be able to'get a house at from 12s 6d to 15s per week," he added. "The man who obtains a Government house will consider himself very lucky, but what about the fifty people who can't get that house?"