Costs prompt rethink on housing renewal

Press, 31 March 1981, Page 6

Costs prompt rethink on housing renewal

Christchurch councillors yesterday moved to reduce their commitment to a new housing renewal scheme, at least for the first year, when they learned how much it might cost. They were told that the City Council could face a loss of $64,000 after the purchase, rehabilitation, and resale of eight houses under the Government-subsidised Community Housing Improvement Programme. That would have meant the housing and property division finding the money from rates. Last year, housing accounts were able to contribute about $14,700 to rates.

The housing and property committee recommended a C.H.I.P. cutback to an estimated loss of $16,000. That might provide for the renovation and resale of two houses, depending on the amount of improvement work to be done. Cr D. C. Close, who has supported the C.H.I.P. concept, said. that he had not intended the council to make an $BOOO loss on each house bought. Deteriorating housing will be bought by the council in ■suburbs designed as Neighbourliood Jjnprovement Areas. The first two will he in the Avon Loop and Phillipstown. . ‘‘We don’t look for profits, except social profits,” Cr Close said of the scheme.

The housing and property director (Mr K. R. McNeil)

said that' the expected loss on each rehabilitated house might seem high, but the Housing Corporation agreed with the estimate. Cr D. J. Rowlands said that the C.H.I.P. policy aimed at encouraging individuals to follow the lead of council renovations in a neighbourhood. There was evidence to show that one improved property ■ “generates improvements far beyond that one immediate house,” he said. , At least one house in eash designated neighbourhood should be improved by the council in the first year, he said.

Cr M. J. Glubb said that the renewal programme was “completely untenable” if it involved extending costs to ratepayers. Instead, loan funding for private developers should be encouraged, perhaps at concessional interest rates. The council had to be “ultra-cautious” when proposing a project that ended in gain for individual home buyers from ratepayers money, said Cr Rex Lester.

“If we attempt to turn pigsties into palaces, we will end up with the loss.” Cr Close said. “I envisaged more modest repair and uplift.”

It would not be easy to find housing suitable for purchase, said the assistant housing director. Mr J. ■ M. Beauchamp." The Avon Loop had been covered door-to-door by Housing Corporation officers, who had

“drawn a blank so far be T cause anything marginal there has been bought by the private sector,” he said.

Councillors welcomed new Government financial assistance for improving old pensioner flats, announced yesterday by the Minister of Housing (Mr Quigley). But they said that the scheme’s 9 per cent interest rate was too high. Cr Lester said that it could be more viable for the council to demolish some flats and rebuild under higher Government subsidies and lower interest rates.

Mr Quigley said that loans of up to $6600 a unit would be available to local bodies and other welfare or charitable groups that had pension rental housing.

Assistance would be given for the improvements of flats built more than 25 years ago. The City Council has about 140 units in that category. The oldest flats were built in Barnett Avenue, in 1938. The council remodelled one of those flats last year with its own money for $6663. The same amount of work would cost more today. The interest rate on loan money for new pensioner flat schemes is 3.5 per cent.

Councillors said that some special Government subsidy should be available for 26 Barnett Avenue flats, since they were built without Government help. The Government’s subsidy policy was introduced in i 950.