LOCAL HOUSING

Evening Post, Volume CXXVIII, Issue 70, 20 September 1939, Page 11

LOCAL HOUSING

MORTGAGE LOANS

CITY COUNCIL'S POWERS

A lengthy clause in the Local Legislation Bill, which was introduced late last : night in the House o± Representatives by, Governor-General's Message, empowers the Wellington City Council to -make advances or give guarantees to lending institutions which are contemplating lending moneys on mortgage for the building of houses.

In terms of the Wellington City Housing Act, 1928-,' the prospective mortgagor has to find at least 10 per cent, of tn-'. estimated value of the land and building, the financial institution two-thirds of that amount, and the Wellington City Council may either advance or guarantee the remainder. The total mortgage money in any one case is limited to £1350. The Wellington City Council may borrow moneys without a poll of ratepayers up to an amount of £50,000 to make these advances or guarantees, but, as regards the guarantees, it is restricted to total advances of £25,000.

Arrangements have now been made with lending institutions to finance schemes under the Act, under which it is contemplated that anything up to £100,000 will be made available in Wellington for house-building purposes. It is proposed that the City Council will, however,. proceed on the guarantee basis only, and it is not intended that it should contribute cash payments towards any of the mortgages. 11l these circumstances the limitation of £25,000 for guarantee purposeo is not sufficient, and one of the purposes of the clause is to increase this amount to £50,000.

In addition, it Ls desired that the amount of any one mortgage to which the legislation applies shall be increased from £1350 to £1500. One of the financial institutions which will be lending most of the money involved in these transactions is not satisfied -with the terms of those sections. It considers that as they are framed at present the guarantees or agreements under the Act are liable to be assailed in the Com-ts. This institution has therefore stated that before it will consider making any moneys available under the scheme the legislation should be reframed in the form in which it is now submitted, so that its rights and the City Council's powers will be unassailable.

Whilst, therefore, this legislation is lengthy and complicated, it is, with the exception of the items relating to the increases in amounts, purely technical and for the protection of prospective lenders.