Housing package helps those on low incomes

Press, 16 July 1982, Page 1

Housing package helps those on low incomes

PA Wellington Low-income families effectively earning one full-time wage are ° given a boost in the Government housing package announced yesterday.

But in a range of policies aimed mainly at families earning at the bottom end of the scale, there is bad news for those in that bracket with two full-time wages and who want to build a home. • Low-income loan limits rise from $18,500 (or 80 per cent of valuation) to $25,000 (or 80 per cent). Effectively a couple could previously earn up to a combined $5OO gross a week and qualify for low-income finance to build. Now the maximum income limit is $2OO a week gross for each person, whether the couple wants to build or buy an existing home. The package increases the “maximum family income” from $250 a week to $3OO to qualify for low-income lending. Family income is defined as the combined gross income of the principal earner and spouse or de facto partner. “Sole persons” also have a maximum gross of $2OO a week. The change in income eligibility shows a move away from “single incomes” terminology to "family incomes” and also a Government effort to push loan applicants into seeking private-sector money. Announcing the package, the Minister of Housing (Mr Friedlander) told journalists it would be of “significant

assistance” to low-income groups obtaining their first homes. Mr Friedlander claimed the package as his own, although he said the former Minister, Mr Derek Quigley, had "made an input.” . Mr Quigley said he had completed the package before he was ousted from the Cabinet last month, but he noticed some changes yesterday. The main difference was the absence of his bid to encourage more- borrowing from the private sector, through a $2500 interest-free suspensory loan. Mr Quigley told journalists there would be a number of people no longer eligible for Housing Corporation finance because of the new criteria. The group who wanted to build and earned ssoo.gross per couple per week would now have to go to the private sector. The former Minister said the package was a good one for lower-income families, and “does a very significant amount for them” because of the increased loan limits. The Opposition Shadow Minister of Housing, Mr M. K. Moore, said .the package “would have as little effect as placing a Band-aid on a corpse." It was little more than a catch-up for building and existing house costs which

! had been running well ahead ; of inflation for the last year, Mr Moore said. I Mr Friedlander, questioned . about whether the package ' would help house the people said to be homeless in places such as Auckland, said he did not accept the claims of a recent survey that thousands of Aucklanders were homeless. He said New Zealand's record in housing people was up with the best of Organisation for Economic Co-opera-tion and Development countries. However, the Minister was unable to say how many people in Auckland his department regarded as homeless. Mr Friedlander also said many people in the Auckland area had last year financed themselves into homes costing in “the mid-$30,000” range, but was unable to say just how many people came into this category.' A statement by Mr Friedlander summarising • the package said that in future all new Housing Corporation loans would provide for an annual interest-rate review. New mortgages would be reviewed after 10 years. “This will give the corporation the opportunity to assess a mortgagor’s needs and ability to meet repayments and make any adjustments that could be war-

ranted in the light of circumstances prevailing." The corporation's limited tenancies would be reviewed annually after the first six years “to ensure that rental accommodation is occupied by those most in need.” Twelve months notice would be given to tenants asked to vacate. About 900 would be reviewed between now and the end of December, and about 4000 in the first 12 months, the Minister said. The Government would be looking at “income related to the number of children." The limit started off at about an average ordinarytime wage of $252 for a family with one child. That limit fell by $25 for a childless tenant and rose by $25 for a family with two'children. About 530 corporation units will be made available this year, including up to 40 new emergency houses. Some of the 530 will be relocated houses, including homes moved from the construction town of. Twizel. In pensioner housing, Government aid will .be increased from $25,000 to $28,000 — made up of a $10,750 grant and $17,250 loan. Building industry suspensory loans will be increased by $lOOO to $5OOO.

Mr Friedlander could not say how much money the package would cost. The figures would appear in the Budget, which is expected in about two weeks. However, more money was being spent this year than last, although he could not indicate whether this, was in real terms or oh . an inflation basis. ’ The Parliamentary reporter of “The Press” says that Mr Friedlander said yesterday that Christchurch did not have a serious housing problem. Talk of the need for transit camps to house the homeless

was an exaggeration. Numbers of persons per room were far lower in New Zealand than in many O.E.C.D. countries, Mr Friedlander said. In the last financial year only 37 applications were made for 40 emergency houses available. This was a test of the need. However, if it became obvious that more houses were needed, the quota would be reviewed. But more rental houses were also being provided, and this might meet demand. The housing package - would direct corporation loan money for new houses away from cities experiencing a drop in population such as Christchurch, Dunedin, and Wellington, towards

northern cities which were growing. - However,- loan parity on existing and new houses would mean that people in cities with falling populations would not be put at a disadvantage. Until now loans have been higher for people building than buying an existing house — $25,000 compared with $18,500. The housing package closed that gap. Continuing a policy of the former Minister of Housing, Mr Quigley, to bring local authorities further into construction of rental housing — a policy at one" stage directed specifically at Christchurch local authorities during the talk of transit camps — the policy raises the loan to local authorities building pensioner houses.

The ceiling set on rents charged by local authorities has been removed, so that authorities will not be deterred from building. Mar-, ket pressures would keep rents modest, but authorities would be able to recoup their costs, which at 3.5 per cent interest would not be high, Mr Friedlander said. Compared with last year when 400 rental houses were built or bought by the corporation, 490 houses would be provided this year, excluding the emergency houses. Although Mr Friedlander said he had still to decide where he would allocate these rental units some Twizel houses would be shifted to Christchurch. The number is believed to be 30.