State house responsibility may become local govt’s

Press, 16 March 1982, Page 16

State house responsibility may become local govt’s

. Responsibility for administering. maintaining, and repairing State houses may be transferred to local government. » The Minister of Housing .'(Mr Quigley) elaborated on ■statements he had made ■about the role of local government in State housing. .. Mr Quigley announced at ;the Master Builders’ Federation.conference in Blenheim that he was considering expanding a pilot scheme in Ashburton whereby the Ashburton Borough Council acted as agent for the Housing Corporation in selecting State house tenants. Under the scheme, the Housing Corporation remained responsible for rent collection, maintenance and repairs.

' But Mr Quigley said that if the scheme was extended,, the role of local government might be expanded to include responsibility for repairs and maintenence. “If they (local bodies) were responsible, they would make sure that their own people got the business,” he said. It was the Government’s policy to devolve responsibility from central to local government, he said.

. If the Ashburton scheme were introduced in Christchurch, it would probably have to be administered by the bigger local authorities, Mr Quigley said. “The idea is that it gives them the chance to use the' total stock to best advantage.” If it were administered separately bv local councils,

there would be problems with '“cross pollination" Mr Quigley said. Under the devolution programme, -'i the Government was considering making more finance available to local bodies, he said.

Cheap loans were provided under the - urban renewal scheme, but outside the scheme interest rates of Mb per cent to 9 per cent were charged. This was unfair to smaller cities and big towns which could not qualify for urban renewal finance. “It is easier for local councils to know the needs of their areas, so to lend to them makes a lot of practical sense.” It also made political sense, he said, The second arm of Mr Quigley’s State * housing policy is to encourage tenants to buy their houses. In 1980 he reduced the deposit required, from tenants wishing to buy from 20 to 10 per cent.

“If we do sell a unit, even if we only get ; a. 10 per cent deposit,' we still have the deposit to spend and save ourselves repair and maintenance costs,” he said. To further this policy, he has limited State house tenancies to six years. After that time the tenants will be given 12 months to buy or vacate if they no longer qualify for State assistance. Limited tenancies have been in the regulations since 1976, but have not been enforced hitherto. Mr Quigley denied that the proposed tfansterence of re-

sponsibility to local government and the encouragement being given to State tenants to buy their houses amounted to' a scaling down of the activities of the Housing Corporation.

“I’m looking at the possibility of redirecting our resources.” The emphasis would be on lending, with a social welfare basis, he said. Thirty-five per cent of Housing Corporation loans were being made to preferred groups; Post Office Savings Bank home-owner-ship account holders primarily, he said. The effect was to reduce the corporation’s capacity to help those genuinely in need. The system was also unfair to those who were not eligible for Housing Corporation loans, and who did not have home-ownership accounts with the Post Office, he said.

Last year the Government indicated that preference for Housing Corporation finance .would be given to P. 0.5.8. home ownership account holders. This meant that many people who would not otherwise qualify for a State loan might receive one if they banked with the Post Office. . “We are currently faced with a justified criticism from people who have borrowed from the private sector at the difference in interest rates charged by the corporation and the banks,” he said. To redress the balance, he was considering replacing

direct assistance from the Government with a Government subsidy, through the corporation, bn interest from borrowing in the private sector, Mr Quigley said. However. if the subsidies were introduced, it would be "in a staged way.” .

"We have got to give fairly clear signals, and give people an opportunity to establish savings records.” Mr Quigley conceded that, with mortgage money tight because of large-scale investment in the Government’s inflation-proof bonds, it was not an “ideal time” to reduce Housing Corporation lending. “Any redirection has to be tempered with a view of the facts of the situation,” he said. “Since I have been Minister, the Housing Corporation has been more commercial in its lending and has looked after its security,” he said. However, he plans to combine this with a relaxation of eligibility regulations. “A strict criteria is easier to administer, and that is nice for civil servants, but it makes for some hard cases,” he said. He proposes to maintain “reasonably strict criteria” for' most lending, but to provide for “a smaller number in the discretionary group.” Those people in the "discretionary group” would be interviewed by the corpora- ■ tion and their cases decided on individual merit, Mr Quigley said.