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TRADE AND LABOUR.

HOUSE SHORTAGE. (By "Gracchus.") , Houses are so scarce in Ashburton that the position is acute. It is, indeed, difficult to see any remedy, unless Government or municipal action is taken. The chief shortage is for houses to let, but the supply of dwellings for sale is likewise very limited. Not only the cottage of four or five rooms, but the more pretentious house of six or seven rooms is almost impossible to obtain. According to land and estate agents, the present situation is unique. Some of them declare that never in the history of the town has the demand for residences so greatly exceeded the supply. Some would-be tenants protest that they would take tents and hie them to the river-bed if it were not for the winter being near. One result of the present house famine is that before long a great many more people will own their own homes. Whereas it has long becta recognised I that,the owning of house property for [letting pxirgoses is hazardous, .it now happens that A*the renting of property is equally so. It is certain that the prospective purchaser now receives .a very chilling reception from the tenants of the houses he inspects, also some very candid opinions about the demerits of the house. The man who was seeking a dwelling to buy never had much difficulty in deciding whether the person in the house was tenant or owner. Now, the distinction is unmistakable.

In view of the acknowledged scarcity of houses, both for letting purposes and for sale, it would appear at first sight somewhat remarkable that the speculative builder does not seize the apparent opportunity, and provide what is so badly wanted. The fact of the matter is, however, that it does not pay to build in Ashburton to-day, except for a purchaser on the spot. There are many^ other reasons also, which are operating against any general move on the part of builders to make good the present deficiency. In the first place, the cost of the build- I ing materials has to be considered. Bricks are dearer than timber, and timber is 35 per cent, dearer than before the war. To build an up-to-date six-roomed house involves an expenditure of about £850, and in addition the ground has to be bought at anything from £150 to £250 for an ordi-' nary section. In fact "Gracchus" heard an estimate of £1,200 given for building a five-roomed house, quite recently, without considering, the section. It is said to be extremely difficult now-a-daiys to make 6 per cent, on such investments. It follows that if a man can lend his money on mortgage on a two-fifths margin of security, and get 6 per cent interest, as he can do, he is not likely to go to the trouble and expense of building houses,, and have. .all', the labour and risk attached to looking after them. Many people, too, who could afford to build for themselves are holding rtheir money in the banks or building societies, waiting for prices to come down. Turning to the wage-earner, he would require to pay 25s per week to make the investment of £700 by the builder of a five-roomed house pay- He cannot afford to do it, and the houses are not built.

The problem for solution is, how the difficulty is to be met. The speculative builder having ruled himself put, it narrows ' itself .down to this: that either the Government, or- the Municipality or the workers themselves, must "take action. The workers are most closely concerned. The matter of State workers' homes is no new one, the first move in that direction having been made by the late Mr Seddon. A factor that acts against State settlement of the kind is that it is human nature for a man to prefer to build a whare for himself than to live in a house provided for him by any public body. Then to take the municipality; if the private builder finds it difficult to see his way to a 6 per cent, return for his money on houses built to let, municipal enterprise is likewise face to face with a serious business proposition in considering the advisability of erecting workers' homes. The question is whether the Borough Counpil, for example, can at present prices, build houses cheaply enough to enable it to rent them to workers at rates the workers can pay. But here in Ashburton, at anyrate, the price of building sections would not be a serious problem with so many Glasgow leases untaken and, in fact, increased revenue from rates might go further to make the investment attractive. It may be interesting here to quote the experience of the Town Council of Bloemfontein, South Africa, in this connection. .

In the town named, a housing shortage began to make itself felt in 1908, and gradually it became a serious problem, as it is in Ashburton to-day, ■iiut the speculative builder no longer considered house property an attractive investment so that public action in the matter became necessary. _ The Town Council had its accumulating sinking and depreciation funds to invest, and, instead of buying up its own 4 per cent, stock, decided to make loans to citizens of the town on first mortgage on the homes that the loans would enable; them to build. At | iirst, large margins were insisted upon, but it was soon realised that this would not help the artisan or clerk' in steady employment but with small savings—the. very class who. most felt the scarcity of housing. In order, therefore, -that the loans should be available for . service where most needed, the present scheme was developed. It is: (1) The applicant .pro-' 'yides the ground on which, the home is built; (2) the .council advances the cost of the building at 7 per cent, per annum, payable monthly, to be reduced to 6 per cent, when the loan has been partly z-edeemed; (3) the loan is to be redeeufced at the rate of 5 per cent, per annum, payable monthly. In this way the interest and the redemption are paid monthly, as if they were rent; there are no bad debts nor -arrears of interest. The success of the scheme is said to be in the monthly payment, which, in. most cases, is paid by the wife as, part of her household, expenses. In encouraging the erection of such houses the council realises that it means another rate account. ■ The difference of 1 per cent, in the amount of interest charged has b,een. treated as a reserve against possible bad deb.ts, .. and amounts now to neaxly £4000. Here is a scheme, for Ashburton. to consider, especially as condition (1) is hardly necessary-where the Borough can

secure tenants' for its hind; and houWehungry residents need not wait till they have the capita.l to.'buy the section. ■'"■■'

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/AG19190516.2.3

Bibliographic details

TRADE AND LABOUR., Ashburton Guardian, Volume XXXIX, Issue 9611, 16 May 1919

Word Count
1,146

TRADE AND LABOUR. Ashburton Guardian, Volume XXXIX, Issue 9611, 16 May 1919

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