CITY RENTS.

Auckland Star, Volume LXX, Issue 201, 26 August 1939, Page 13

CITY RENTS.

BUSINESS PREMISES.

EASING IN DEMAND.

EFFECTS OF TRADE CUT,

Among the early effects of the restriction of the Dominion's overseas trade ie J a decreased demand for space in Aucki land city buildings. Indentovs and i manufacturers' agents who have had to reduce their operations under the combined pressure of licensing restrictions and the rationing of sterling funds are economising, us far as possible, by tak-

ing smaller premises and by renting under partnersliip arrangements.

Although the movement has not yet gone very far. those in close touch with the position consider that the decreasing volume of import* will be retleeted in •gradually falling rentals from shops and ■ >(lice*. It is stated that incomes from city property rise and fall with fluctuations in business activity, and that imports are a major factor governing the movement.

"There are now vacant rooms on the upper floors of some Queen Street buildiu<4<said a leading estate agent this morning, "and the owners are experiencing difficulty in finding new tenants. This is causing concern, as the costs uf holding property are so high as to ■diow only the narrowest margin of prolit for the majority of owners." Non-adjustable Costs. Fie pointed out that the costs on city property were much higher to-day than a few years ago. chiefly due to the lienvv burden of taxes and city rates, lioth of which were non-adjustable items of expenditure so far as the owners of buildings were concerned. The amount demanded bv the Government in land tax aml social security tax was double the sum required to pay the graduated bind tax ruling prior to 1931 and represented a. far greater increase when compared with the flat rate which operated between 1031 and 1030. Rates had in-i-rea.-ed correspondingly, due to the

cumulative c-fl'ocU of the rise in assessments and rates. As an example the] ih tok nn one property, wit 11 a frontage j of only 42ft. in the heart of Queen St root, had increased from in the boom period 1"> years ago to £1200 to day. Taking a period of 2.1 years, tho change was even more striking, the rates having advanced during this time from 2/11} i" the to 4/4 : J. while valuations had aluo been largely increased. The tax and rate levies on eit v pro|iert v had liccome so burdensome that they "would be unpayable under

lean conditions. j Improvement* in buildings and neees- ! sary repairs and renovation* were being j retarded, it. was stated. <1 no to the fact I that liuiiiei im nors wore unable to . afford the expenditure involved. Few] transfers wore taking place, owing to tho difficulties of disposing of oitv property, and the owners thus had little

pro-poet of rcloai-c from their liability. | hore was a definite tondenoy for dcveh>pmoiit to to force*! into side c-tiects u here co-Is wen- not >o heavy, and it I appeared that, some redistribution of j values would have to lie made in future The fooling in business circles was that both rates and taxes

in Queen Street, had been forced beyond the economic limit. How to Tackle the Problem. That iho problem could be tackled only from the valuation side is evident from tho fact that 16/ out of ever £ of oitv rate revenue is required to cover unad instable city expenditure. Of the £627,015 o-timatod to be received from rates' ineludiucr arrears, in the current vcar a total of £">00,0:.l is required to meet tixod items of expenditure as follows:--Interest £200,662, eVohanjre char" os £:?•">. U'.S, hospital levy £86.382. drainage levy £37.081, public lighting £*>3 000 fire hoar<l levy £10,13~ anu levy £2426. The extent to which the rates cotild he reduced if the normal ,ervicos of the city were brought to a. standstill would amount to onl.x 4/ in tho £. or one-fifth of the rates, and the most rigid economies in the administration of tho various services, consistent with the minimum standard of efficient oitv management, would be onlv a f. -etion of this amount. It is. therefore, apparent that the scope for rate relief over the whole body of ratenavers is almost negligible as long as ilio present debt burden remains and if Queen Street property is to be relieved it. will have to be at the expense of "back street" city property.