STATE HOUSING

Evening Post, Volume CXXII, Issue 153, 26 December 1936, Page 4

STATE HOUSING

SCHEME CRITICISED

'FUNDAMENTALLY UNSOUND'

MR. O'REGAN'S VIEWS

The opinion that the State housing scheme is doomed to failure because it. is fundamentally unsound was expressed by Mr. P. J. O'Regan, Wellington barrister, in an interview with a "Post" reporter. Mr. O'Regan said he admitted at once that there was a housing problem just as there was an unemployed problem, but both, he said, were merely, aspects of the one fundamental problem—that of the private appropriation of the community value of land. Any one who cared to use his eyes could see the effects of this evil everywhere throughout this country. New Zealand was a country more than six times the size of Denmark, but with less than half her population, and, although everybody knew that the best assets a nation could have were people, we appeared to be overcrowded, not merely in tha towns but also in the country. For this alarming state of affairs theye' was only one explanation —the blockade of land. The great majority of the people called land owners had too much land—too much for their own purposes, and certainly too much- for the public interest. The remedy was simple, obvious, and effective—taxation on the community value of land without exemption; that was to say, a tax levied on the same principle as the rating on unimproved values in the City of Wellington. "The rate of the tax," continues Mr. O'Regan, "is a matter of practical politics, but we Henry George men insist that the whole of the community value belongs, to the people and should be taken in lieu of all other taxation. To begin with, the rating-on-unimproved-values system could be made mandatory, and the national land tax 'made heavy enough, to put an end to all ■speculation in land. "Yes, building is one of our most important local industries, but the very best encouragement we can give it is to untax it and make land cheap. •We maintain that it is not the business of the Government to build houses for anyone—unless it be prisons and mental hospitals. The most competent man to build a house is the man who is going to occupy it. It is no more the business of the Government .to supersede private enterprise in this connection than it is the business of the Government- to find work for people. Save as a temporary expedient, it is not the function of the •Government to find work for any man, but it should be the business of the Government ,to propose legislation whereby every man will have the chance to employ himself, to build his own house, and to do everything he has a right to do, and the condition precedent is cheap land. "Superficial critics talk -about the taxation of the unimproved value of land as though it were purely a question affecting farmers. Here are a few figures which will put the real position beyond all doubt: the total area of the counties is 102,796 square miles and the capital value of the land comprised in that area is £330,192,157, of which the unimproved value is £ 185,673,752. We have about 120 boroughs, of which the total is 263,307 acres, or barely 420 square miles, and the' capital value is £299,707,631, of which the unimproved value is £112,865,542. The total area of the four chief cities is 60,138 acres and the capital value is £155,274,134. of which the unimproved value is £65,201,216. , ' PRIVATE ENTERPRISE. "To those who say that private enterprise has failed to solve the housing question my reply is that which G. K. Chesterton gave to the critics who said that Christianity has failed—it has not been tried. The building trade is hampered in every possible way by unjust and impolitic taxation. You .cannot name an item of building material — roofing iron, cement, nails, paints—that is not subject to heavy Customs taxation; indeed, 40 per cent, of our total tax revenue is indirect. The main obstacle to the building industry, however, is dear land. The bottom side of every building is necessarily a piece of ground and as long as we tolerate a system which enables people to grow rich merely by trafficking in land instead of using it we shall have a housing problem. Accordingly, it is absurd, to suggest that the State, by going into j the building. business, will solve the problem. The fundamental objection to the scheme is that the taxpayers must buy what already belongs to them and that is the real reason why there is no opposition to the proposal. Land monopoly will certainly prefer to be bought rather than taxed out, but the plain fact is that it can never be, bought out. There have been housing schemes innumerable in other countries, England included, every one of which involved the purchase of land, and not one has been a success. The present so-called National Government in England is supposed to be making war on slums and has embarked on a house-building policy, but nobody takes the scheme seriously. It is merely juggling with the question. More than forty years ago we embarked in this country on a system of buying land for settlement. We have spent millions in buying off- large estatesi but the only people who have done well out of the scheme are the expropriated owners, who reaped where they never, sowed and who got the taxpayers' money in hard cash for a value they never made. This would not matter so much if the question had been settled, but the land question remains just where it was forty years ago; indeed, the situation is worse, because there is no unappropriated Crown land worth having. WHERE WILL IT END? "Of course, any scheme that is fundamentally unsound will have unexpected repercussions, all of them disastrous. The question to ask ourselves in connection with this housing scheme is: Where is it going to end? When the State has built a sufficiency of houses will it be able to go out of business? Exactly (he same question arises in connection with the public works that arc now going on. At the time the scheme is finished will the tradesmen employed by the State be absorbed in other industries, or will the' State have to continue building for the sake of making work? Again, when we embarked on the purchase of land for settlement over forty years ago we laid the foundations of a political party, Crown leaseholders who demanded the freehold, and when their'friends came into power they got it. We know that everybody who has a piece of land wants to mortgage it because mortgaging nowadays" appears to have become a regular industry, as it were, though such a great thinker as Gladstone regarded mortgaging as he regarded bankruptcy—something in the nature of a last resort. Well, if we get enough State houses built, what assurance have we that the State tenants will not demand the freehold? Does anyone seriously believe that the present Op-

position will refuse them when it comes into power?

"I have hinted merely at one or two of the reflections induced by tlie scheme. It requires no prophet, however, to say that the scheme, no matter how good the intentions of the Minister in charge—and I do not question them —is doomed to failure, because it is fundamentally unsound and therefore cannot solve the question of housing. May I say in conclusion that the essential equity and social benefit of land value taxation are fairly demonstrated by the flourishing state of the building industry at the present time in the city. Wellington is the largest centre that has adopted rating on the unimproved value in its entirety. And the critics notwithstanding, the system has come to stay because it deserves to stay. Extend that principle in the direction I have indicated, and we shall soon have no housing question, no unemployed question, no labour question."