HOUSING COSTS AND RENTALS.

Hawke's Bay Herald-Tribune, Issue 20, 8 February 1937, Page 6

HOUSING COSTS AND RENTALS.

Xt is to be assumed, though. perhaps with no very great confidenee, that our Government in formnlating the State Housing scheme — that is, in fixing construction cost in the first instanee and rentals in the second— will have proceeded on the basis oi making the scheme at least self-supporting. Otherwise it will mean further calls npon the whole tax-paying community, though that, of course, is a point which does not seem to trouble the present Administration very much. The Prime Minister last week announeed the fact that the first contracts nnder the scheme, those for the erection of a substantial number of homes in the Wellington metropolitan district, had been let to two of the Dominion 's biggest construction companies. Hovfever, as in other connections where questions of finance are involved, Mr Savage declined to give any inkling as to prices on which the contracts are based. AI1 he would say, and that with no great air of assurance, was that the prices were such as looked like allowing of the houses being let at rentals appreciably lower than were now being paid for like accommodation. There may, of course, be some good reasons to be advanced for reticence on the subject, at any vate until receipt of tenders for some of the other big cityventures shortly to be called, the earliest probably in Auckland. In any event, it is in an Auckland exchange that we have some expert diseussion as to the likely cost, under present conditions, of building and making ready for occupation homes of the same charaeter as those for which tenders were called in Wellington. Auckland builders consulted estimate that, on the average, the cost will be somewhere between £900 and £1000, while even for the least expensive type the amount would not be less than £750, How far these figures may be in excess of the actual Wellington eontraet prices cannot, of course, be as yet said. They are, however, a very long way above the average which the Minister of Finance had in his mind six months ago when he presented his Budget. Tn it, when referring to the Government 's Housing .Act, he said that "plans were in course of preparation to provide for the construction of 5,000 houses at a cost approximately of £3-million." It requires only the working out of a sum in very simple division to show that even the lowest figure quoted by the Auckland builders is a neat 25 per cent. in excess of Mr. Nash's average estimate. This, assuming the Auckland figures to be anywhere near right, is certainly a very serious discrepancy that will call for some explanation. Possibly it will be found in the Minister 's failure to recognise that then current costs could not but go up very materially with, the increase in wages and the reduction of working hours. Beyond that, of course, we have a very considerable lift in the cost of material, partly due to the same causes and partly to the rise in the prices of imported requirements. The main point, however, is as to whether the houses to be erected under the scheme are, without loss to the State- — otherwise the taxpayers— to be lettable at rentals that will come within the eompass of the smaller- wage-earners. Obviously it should be for them that the Government should have first regard in any scheme of the kind, but rentals worked out on the basis of the Auckland estimates— to which, of course, the cost of the land has to be added— would look as if, to avoid ultimate loss, they must be such as only workers on the higher wages scales could pay. A good deal must, of course, depend upon the rate of interest with which the Government may debit the venture upon the funds which it is generally presumed it will provide for itself through the Reserve Bank. Here, as with the £6-million advance on its Dairy Produce Aceount from the same source, we are kept in profound ignorance. However, let us hope that the actual figures when finally disclosed will permit of the small wage-earner deriving something the same benefit as the big from the scheme.