STATE HOUSING RENTALS

Press, Volume CVIII, Issue 31587, 26 January 1968, Page 1

STATE HOUSING RENTALS

Increases Of Up To $5 A Week

(New Zealand Press Association) WELLINGTON, January 25. The Government has decided to increase State housing rentals paid by higher-income tenants from April 1. Tenants of State rental houses who are earning more than $2280, with $lOO extra allowable for each dependent child, will pay rent increases of up to $5 a week from that date.

Increases will vary depending on the tenant’s income and the number of his dependants but no tenant will pay increased rents if he earns less than the new salary limit set by the Government.

The new salary limit is the same as that used to determine eligibility. for 3 per cent rebated housing loans through the State Advances Corporation.

This has been increased from the existing limit of $2OBO plus $lOO for each dependent child to $2280 plus the $lOO for each child.

The Minister of Housing (Mr Rae) said tonight that the new limit would be the factor in determining whether a tenant’s effective rental would increase. Mr Rae said the review of rents would not apply to tenants of pensioner flats, pensioners and others already paying concession rents, higher rental flats, or Government pool tenants, whose rent had for some years been based on income. The basis for the review is to be that a tenant must have occupied a State unit for three years or more. The maximum increase in rent will be 85 a week, but rent will not exceed fair rent and a tenant may apply for a rebate if his income is such that the maximum would not apply. Oldest First The review will begin in April this year and those who have been tenants for the longest period will be reviewed first. With about 30,000 tenancies to be reviewed it may take several months to complete the first review. But by April, 1970, all tenancies commencing before April, 1967, will have been reviewed and thereafter the review will be on a continuing basis.

. The tenant will have the right to a special review at six-monthly intervals because of changed income or increased family responsibilities. New Assessments Mr Rae said the basis for calculating the rebate to be allowed would be clearly set out on the new assessments which would be issued so as to give one month’s notice; and applications for a rebate should be made within this period. Any tenant who is eligible under the new limit will pay the same net rent as at present. There will be no reduction of existing rents. There will be no rebate available after the income level reaches $63-885 per week for tenants with no dependent children. Fair Rent The figure will increase by about $2 per week for each dependent child—for example: three children $69.85, four children about $71.85 a week. Mr Rae said the rent increase was in effect an additional 25 per cent of the amount by which the tenant income exceeds his eligibility for a 3 per cent loan and with a maximum of $5 a week or the fair rent if lower. Mr Rae said the main defect in existing policy was that there had been no provision for regular review and adjustments of rents in accordance with the improved financial circumstances of tenants. Total Earnings On the Government’s decision to increase the income limit for 3 per cent rebated housing loans, Mr Rae said this was based on the applicant’s total earnings including overtime, bonus, etc., in

the 12 months prior to the date of application. This Increase, which was in accordance with the Government’s 1966 election policy and the recommendation of the National Housing Council, would assist intending home owners who had not previously owned property by initially providing for lower financial outgoings on the mortgage than would otherwise apply. Further Incentive It was hoped that this increase would provide further incentive to people to acquire their own homes. Rebated loans would continue to be reviewed on a five-yearly basis, he said.