HOUSING SCHEME

Wanganui Chronicle, Volume 80, Issue 33, 9 February 1937, Page 7

HOUSING SCHEME

COST AND RENTALS AUCKLAND OPINIONS In the opinion of builders and estate agents in Auckland who wer.consulted by the New Zealand Herald, the Government will not be able to let houses in Auckland under its housing scheme at rentals much tielow current rates unless it is prepared to ignore capital costs. The Government is at the disadvantage that it is building at a time of rising costs, this result being caused party by rt» this result being caused partly by its vances in materials overseas. It appeared to be the general opinion that the Government had not anticipated that building costs were a. high as they have proved to be. and significance is attached to the fact that it has not declared prices in -c--spl.’t of the contracts let at Wellington. Although the Government is preserving secrecy on the question of the prices of the contracts already let. builders who have either seen plans and specifications under the scheme, or who have been advised of quantities and footages from Wellington, confidently express the opinion tha: tne average cost of building will not bo less than £9OO or £lOOO a house , the lowest being at £750 to £BOO, these figures not including, of course, tne value of the land. By mass production methods tr.e Government has certainly made a determined effort to reduce costs, but it faces the initial handicap that wi.hin the past few years building costs are said to have increased by 30 per cent, at least. One builder estimates that in the period the cost of construe .mg a good type of house has risen from 12s 6d to 17s 6d a square foot. In the building trade criticism Is general that by building its own factories for the production of joinery, Instead of using existing facilities, tne Government has made a bad mis.a te. loading the price of joinery with the cost of the factories. It has leased its factory in Wellington at £3OOO a year to the successful tenderer r>r joinery, this rental being intended to repay the cost of the factory within a few years. It proposes to adopt the same policy in respect of the factory it has had built at Penrose. It was pointed out that in any estimation of probable rentals of Government houses the computer is naturally at a grave disadvantage ui not having available definite figures relating to building contracts or tne Government's assessed value of tne land, which may be very dilierent from the idea of private values on the subject. Government policy may also be very different from the current ideas on depreciation and ma ntenance allowances, anti suchlike. Thus, while some land agents consider that in respect of a property the capital cost of which is £9oo—a figure assumed by builders to be comewhere in the vicinity ot the lowest probable capital values of a Government house for a family—a rental oi 30s a week must be obtained to return 5 per cent, on the investment, the Government may be prepared to risk certain contingencies, and "let such a house at say, 25s a week. Advertising will permit lower price* through increased volume.