NEW BUILDING SCHEME.

Auckland Star, Volume LXIV, Issue 136, 12 June 1933, Page 6

NEW BUILDING SCHEME.

WHAT OF UNEARNED INCREMENT?

(To the Editor.)

The new No. 10 building scheme is undoubtedly a good, useful scheme and mucli ahead of the previous attempt, and should ba the means of putting up a lot of useful buildings and absorbing quite a number of men now unemployed. But is it complete? Should not some provision be made for the eventual refund of the amount of the subsidy on the labour? My point is this: If a person or company builds a house, say, for £650 on to-day's prices, and, say, one-third of the value of the house is labour, £220 approximately, the subsidy of 50 per cent on £220 would be £110 thus making the cost of the house to the owner £050, less £110, or £540. At to-day's prices, where contracts are cut to the bone to secure work, £050 would be a fair price for the house and in three or four years' time it if quite likely it could be sold for £800 or more Whereas the owner is assisted to build, by the subsidy of £110, is it fair that in a few years' time he should bo allowed to pocket that £110, plus the unearned increment on the property? Would it not be better for the unemployment fund to treat this as a loan, free of interest, refundable when the property is sold to advantage, or over a period of years when the property is revenue producing? To get the building _ worth £650 at to-day's low price with one-sixth of the total on loan, free of interest, seems reasonable, but is it advisable to make a present to such owner of this amount plus the unearned increment on the low building costs of to-day? We must remember that the money is raised by taxing the people, including the relief workers, women and girls, and it seems hardly fair to give it away to those who are fortunate t enough to have sufficient funds to build.* There may bo some technical legal difficulty in fixing the amount as a loan, but that is not insurmountable. I hope some of your readers will express their views on this matter and would recommend it to the consideration of those interested in public administration. EQUITY.