Minister Replies On State Rentals

Press, Volume CII, Issue 30115, 26 April 1963, Page 15

Minister Replies On State Rentals

(From Our Own Reporter)

WELLINGTON, April 25.

The statement by the Leader of the Opposition, (Mr Nordmeyer) at Balmoral. Auckland, that State tenants in houses built this year were paying up to three times the rent of those living in State houses built in 1937 was absolutely wrong, said the Minister of Housing (Mr Rae) tonight.

It was also completely incorrect to say that rents of State houses varied according to the cost of building them, Mr Rae said. As he had stated in 1961 when the rents were adjusted. the rent of the normal State house was fixed on the basis of the accommodation provided and the section value. All sections were revalued as at July 1, 1961. The accommodation element in the rental of ordinary State houses was averaged out over the whole country. Any variation was in site value. For example, sections in the cities were more valuable than those in smaller places and. by and large, were better situated for amenities. In 1950 an average increase of Hs a week was made in rentals for new tenancies and for tenants transferring. The earlier tenancies were not affected. In May. 1958. a Labour Government applied an increase averaging Ils a week, with a maximum of 16s 6d. to pre-1950 tenancies The purpose was to bring the rents of such houses into line

with those built later. About 10,000 houses were affected. Pensioner tenants were excepted. The present Government, in 1961, imposed increases averaging 15s, with a maximum of 22s 6d, to ensure that the housing account produced an average return of 3 per cent, on the capital invested. Provision was made to except pensioners, other than those whose households included able-bodied wageeafners, from this increase, and about 90 per cent, of nearly 7000 appeals against the increase were allowed. Tenants of State flats already paying economic rents were not affected.

Mr Rae said Mr Nordmeyer was quoted as saying, “We have to average out the costs of the State houses.’’ That was precisely what had been done, said Mr Rae, and he wanted to make it quite plain there was no differential except on the basis of site value. It was incomprehensible that Mr Nordmeyer should either have overlooked this or not be aware of it at all. Nor was there anything factual to support the statement that tenants in 1963 State-built houses were paying three times the rents of those in houses built in 1937 or, for that matter, in any other year. This was in spite of tl# fact that State , houses today were costing about £4OOO each against less than half this sum when the scheme was in its early days.