Alliance guarantees more state houses

WELLINGTON - Financial help for first-home buyers and a return to income-related rents for state houses are key pledges in the Alliance housing policy.

Spokesman Grant Gillon said state rents would drop over three years to 25 per cent of net household income under an Alliance government, while up to 1000 new state houses would be built each year to meet demand.

The accommodation supplement, now the main form of Government housing assistance, would be scrapped after an unspecified transition period.

The Alliance argues that eventually the supplement will not be needed because more state houses and a return to income-related rents will drive down private-sector rents.

"Families living in state houses are paying market rents at appallingly high levels," said Mr Gillon. "In many cases more than 60 per cent of household income is going just on rent.

"Reducing state house rentals has the effect of driving down market rents in the private sector, particularly at the lower end, so everyone benefits through the flow-on effects."

The Alliance would also build 500 extra state houses in its first year of government, increasing to 1000 a year by the end of the third year.

A national housing authority would be established to organise some form of assistance for those otherwise unable to buy their own homes.

"In 1989, New Zealand had the highest rate of home ownership in the world," said Mr Gillon. "We've now lost that position and housing experts blame rapidly increasing house prices, high real interest rates and market rents which are so high that it makes it very difficult for potential homeowners to save a deposit."

The Alliance calculates that restoring income-related rents will cost an extra $45 million in the first year, rising to $135 million a year after three years.

About $180 million will be budgeted to build more state houses and provide help for first-home buyers.

Recent Government figures appear to support the Alliance costings, putting the restoration of income-related state house rents at $120 million.

Labour also promises income-related rents at 25 per cent of household income but, unlike the Alliance, it would retain the accommodation supplement for private tenants. - NZPA