HOUSING BY PRIVATE ENTERPRISE.
[To THE Emma or sue " Sescrisms."1 Snt,-1Vhen Mr. Hayes Fisher, now Lord Downham, was President of the Local Government Board, he was very anxious to encourage the provision of houses for the working classes by private enterprise, to which we owe ninety-five per cent. of pre-war housing. He wanted to give an opportunity to the email builder to restart his business, BO that after the present war conditions have passed away he may be available not only for local work such as repairs but also for further construc- tion work.
I was commissioned to draw up a scheme to give effect to his views, which should farther provide that any State help given should redound to the advantage of the working tenant, and that no intermediary should make more than his ordinary commercial profit. The scheme when drawn was approved of by the President, though he thought the estimate of cost some- what optimistic. It was shown to two former Ministers, to one of the leaders of the Labour Party, to those specially interested in land questions in the House of Commons, and met with cordial support. It was approved of by the representatives of the Associated Building Societies, with some slight modifica- tion, and the support of the banking interests was secured to assist in financing the scheme. The Treasury agreed to the principle, and it was to have gone to a representative Com- mittee for consideration and settlement of details. Lord Downham was anxious to give a fair trial to this scheme, as well as to that of the contractors working under the Local Authorities and under the auspices of the Public Utility Societies, as that something should be done. When Lord Downham left the Local Government Board the Government policy was changed. The small builder was no longer a matter of consideration; the provision of housing was handed over to the contractor regardless of cost.
The type of house suggested in the scheme contained the following accommodation: Three bedrooms, parlour, kitchen, scullery with bath, cubing out 10,125 cubic feet; twelve houses to be built per acre, such houses to be in semi-urban districts within access to centres of activity. The cost of such houses in the pre-war period was 4d. per cube, or with site of one- twelfth of an acre .2198 15s. At date of scheme the cost was 8d. per cube, equal to £367 10s., whereas at the present price of Is. per cube it comes to .4596 3s.
The State assistance asked was: (1) Provision for assemblage and delivery of material at the lowest cost. (2) The loan of one-third the cost (which now that the cost per cube ie Is. would be raised to one-half), in consideration of a State Rent to be created to repay the loan in about ninety years, together with interest at 5 per cent. for ten years, there. after 4 per cent. (9) A rebate of State Rent from 25 per cent. with cube at 8d., to 50 per cent. with cube at le., for fifteen years—i.e., until the payments M the Building Societies are completed. (4) An abatement of amount due after fifteen years, being the proportion the State Loan bears to the original cost, which should go to guarantee the Building Society against loss.
The help asked from the Local Public Authority was: (1) A sum equal to two and a half years' purchase of the reversion of the State Rent, so that the freehold may always vest in the Local Public Authority, as trustee, to protect the amenities of the district. (2) The drawing up of plans for building in accordance with local requirements and custom and super- vigion of builder. (8) The forming of a register in which the transfer of property can be effected by tenant purchaser on being duly identified, and the provision of certificate of owner- ship to transferee or legal representative of deceased tenant purchaser on payment of nominal fee Its. 8d.
The help asked from the Building Society was an advance of 80 per cent of the- valuation taken at cost, less twenty-five years' purchase at a State Rent. The help asked from bankers was the financing of builders up to completion on equitable terms.
The ;scant purchaser could employ any builder he likes, and so long as he paid the State Rent was entitled to undisturbed possession, and could transfer the property without the usual heavy law costa. He would further be entitled to the right to extinguish the State Rent at a figure below its actuarial value as based on cost should the valuation of the property fall at the expiration of fifteen years. The amount of his actual pay- ment or deposit was fixed at about the sum the demobilised soldier receives as gratuity.
The tenant pays deposit and in addition to rake Theresa. E s. 41.a. d. d. 8 at Bd. per c. ft... 19 7 8 .. 9 per week for 19 years .. 2 1
at 9d. .. 16 1 1 .. 10 1 „ „ „ „ .. 2 7 ..16 1 6 .. 10 9 „ „ „ ..8 2
at 11d. .. 12 10 4 .. 11 0 8 10 ar 12d. ..1212 6 .. 11 0 ..4 6 If these houses be rated at £24 per annum at 8s. in the pound, the net rent and rates vary from 12s. 5d. to 14s. 9d. per week for fifteen years, and from is. led. to Se. 3d. thereafter. The tenant will have to effect repairs (which he can do mare cheaply himself) and pay Water Rate, insurance, Ac.
The coat to the State for the aid given would vary from .€16 Ss. to about £65 per house, according to cubic cost, but if money could be borrowed under 4 per cent. for part of the State Rent period, this cost to the State would he reduced, if not entirely wiped out. The State might further have to help if valuation after fifteen years were lower, but in no case could this amount to 50 per cent. as against a minimum of 75 per cent. loss in the 01180 of State help to the Local Public Authorities.
Although not part of the original instructions, the scheme as drawn could be made available in the case of agricultural labourers, and bring down rent to Se. 6d. for twenty-five years, and 2s. 6d. thereafter; as also in cases where the employers of labour wanted their workers housed, but whore tho industry in which they were employed was not permanent. In these cases the farmer landlord or employer would be bound to advance such sum as was necessary for twenty-five years free of interest, payment of an. equal tenth part to start on the fifteenth year when the Building Society loan was repaid, and to continue till the whole amount was repaid, when the cottage would belong to the tenant purchaser eubjeot to State Rent
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