THURSDAY, NOVEMBER 12, 1936. LOCAL HOUSING SCHEMES

Dominion, Volume 30, Issue 41, 12 November 1936, Page 10

THURSDAY, NOVEMBER 12, 1936. LOCAL HOUSING SCHEMES

It is desirable in the public interest that every possible encouragement should be given to citizens desirous of owning their own homes. The pride of possession is inherent in human nature. Home ownership tends to an enhancement of domestic and civic responsibility. The ambition of the citizen to have ‘‘a home of his own has produced, first, the building society, and later, on a grandiose scale, the system of State advances to settlers and workers. Now we have a Government housing scheme, for ownership or rental, based on cheap money. It is in the interests of the State, which’ must eventually carry the loss in the event of failure, and of the prospective beneficiaries of this legislation, upon whom the reactions of failure may be visited, that the Government’s proposals " should be carefully and critically examined.

■ The scheme has various important aspects, each of them claiming special attention. To begin with, there is the Prime Minister’s statement yesterday concerning the conditions upon which local bodies may inaugurate housing schemes of their own by loan money at 3 per cent., repayable in 30 years with half-yearly instalments at the rate of £2/10/- per £lOO. It may be doubted whether prudently-governed municipalities, surveying the results of State lending for housing in the past, will care to accept the risks involved. Losses incurred will have to be carried by the ratepayers, who, as general taxpayers, are already sharing the burden of loss from State lending. That is a question to be considered by present ratepayers as well as prospective ratepayers under the new schemes. But here is the point: housing loans may be raised by local bodies without consulting the ratepayers. That there will be losses may be taken as certain. Even the building societies, which are conservatively managed, have not succeeded in avoiding altogether the reactions of the depression. In the State Advances Department the losses were serious. From its inception to the end of March, 1935, the total was £885,396. without taking into account losses which may in fact exist but are not definitely ascertainable until the securities a?e realised. In the department’s Housing Account the amount outstanding in respect of 473 homes under agreements to purchase was £251.906, and the arrears totalled £12,469. The Government’s apparent eagerness to tempt local bodies into the housing scheme with the lure of cheap money may be due to its anxiety to reduce its prospective losses —to decentralise its liabilities, so to speak. The local bodies, for their part, should consider whether it would not be better in the interests of their own communities to let the Government carry the full responsibility by doing the job itself. In the meantime, while the Government is waiting to see what response the local bodies will make to its offer, and the latter are waiting to see what their own citizens have to say about it, the building industry is experiencing a lull in Much better would it have been to afford facilities for private enterprise to go right ahead. Another point for the future house-owner—who will also be a ratepayer —to consider, is the condition imposed upon him should he desire to sell. There is to be a special covenant in any contract for sale or lease to the effect that permission must be obtained for a resale. Consent may be withheld “where the purchase price on the resale is in excess of the original value of the house and section, less depreciation, plus value of improvements.” This restriction is not likely to encourage house-buying under the Government’s scheme. The average man who buys a house does so with the possibility in his mind that circumstances may arise which will compel him to sell later on. When that time comes the property market may be in his favour, or it may be against him. The Government says be must not make a profit. What if he has to sell at a loss? Will the Government make up the difference? In the philosophy of Socialism there are no profits. Neither, strictly speaking, should there be in a Socialised State any property-owners. What would become of them should the Labour Party reach that objective, we. may leave prospective house-owners under the Government’s scheme to think out for themselves.