State-house rent scheme ‘working’

Press, Volume CXV, Issue 33940, 5 September 1975, Page 2

State-house rent scheme ‘working’

(From Our Own Reporter) WELLINGTON, September 4. The Government’s system of adjusting rents for State houses to match tenants’ incomes is beginning to achieve its object—to encourage wealthier tenants to buy their own homes, leaving vacancies for poorer people—says the Housing Corporation.

The divisional director of housing management in the Housing Corpora-, tion (Mr J. C. Miller) said today that the scheme was workingi very well, and its full! impact should be felt this year.

In 1974-75, the average weekly rent had risen to $10.15 from the 1972-73 level, ! before the scheme, of $9.80. I The rise from the 1973-74 j average of $8.43 was even i steeper. The drop in 1973-74 I came from the fall in pensioners’ rents. i Income-earners had not 'felt the full impact because a ceiling built into the (scheme limited increases to $5 a week each year. Rent rebates “Rents are now fixed on the basis of a fair rent as defined under the Tenancy Act, 1955,” said Mr Miller. “No rent may exceed the fair-rent level, but rent is related to the value of the property as revised every !five years.” ■ j The Housing Corporation .fixed the rent at the fair-rent (level and then invited the ! j tenant to apply for a rebate to be calculated according to (I his income. The rent was J rebated to one-sixth of the (breadwinner’s income from a .!40-hour week, plus twos'thirds of the partner's inli come, plus adjustments for .{any other income-earners in the family. “All these rents and re,'bates are reviewed annually ~ by the corporation, and as ’’the family’s income changes, I'so does the rent,” he said. . “But it cannot exceed the J fair rent set.”

•; Before April 1, 1973, rents; ['had been reviewed every. J three years, and it would not] 'be until March 31, 1976, that! ' ail rents would begin to be L reviewed annually under the finew system. | Average SI 1.33 “We do not increase rents by more than $5 a week a year, so it will take a few ’ years before the higher! • income-earners reach the ■ fair-rent level,” said Mr! ' Miller. I The average income of successful family applicants in 1974-75 had been $6B: .gross a week, which would ,j provide a rent of $11.33 when ,(the new system was working >! freely. i This average income ex-1 I eluded social welfare bene-! I ficiaries who had been alloi cated homes. The ratio of ; i successful applications from J solo parents had remained fairly consistent for several > I years, and had been 27.1 per : j cent last year. !l “With the Government’s: decision to curtail the, sale! ‘of State houses to tenants' i (except in Mangere-Otara and t Porirua), we expect higher: * income tenants to be encour-i ’ aged to buy their own homes 1 ’ and release badly needed! > accommodation for those on ’ low incomes once the effects i of a few years with the rent ■ increasing by $5 per year are ■ felt.” said Mr Miller. There was no limit on the 1 amount by which rents could 'decline at any annual review,.

land the intention of the (scheme was to ensure that jthose on similar incomes paid .'similar rents.