1970 VICTORIA THIRTY -SECOND ANNUAL REPORT OF THE HOUSING COMMISSION VICTORIA FOR THE PERIOD 1st July, 1969 to 30th June, 1970 TOGETHER WITH APPENDICES PRESENTED TO BOTH HOUSES OF PARLIAMENT PURSUANT TO THE HOUSING ACT By Authority: C. H. RIXON, GOVERNMENT PRINTER, :V!ELBOURNE, No. 18.-11466/70.-PRICE 4S cents THIRTY SECOND ANNUAL REPORT OF HOUSING COMMISSION VICTORIA 1969- 1970 CONTENTS MEMBERS GENERAL COMMENTS J. P. GASKIN Director ALAN A. ASHMAN, B.COMM., A.A.S.A., Deputy Director R. BURKlTT, B.C.E., A.M.I.E.(AUST.), A.S.T.C. PLANNING AND CONSTRUCTION Commissioner c. V. HORE, M.E., B.C.E., A.M.T.E.(AUST.) ESTATE AND PROPERTY MANAGEMENT Chief Technical Officer F. S. HOWELL, B.C.E., M.I.E. (AUST.), General Manager, Concrete House Project R. R. PRENTICE, M.ARCH., DTP.T.R.P., FINANCE Chief Architect R. J. B. HlSCOX, DTP.C.E., Chief Engineer B. M. CAVEN, A.C.!.V., STAFF Property Control O.fficer L. F. V. SYMES, A.A.S.A .. Chief Finance Officer TABLES A. L. BOHN, A.A.S.A., Secretary APPENDICES 179 Queen Street, Melbourne, 3000, VICTORIA GENERAL COMMENTS The Hon. E. R. Meagher, M.L.A., councils, suppliers of building materials and trade associations. Minister of Housing The difference between the cost of erecting these units and the cost of constructing comparable site Sir, built timber framed asbestos cement sheet units has fluctuated over the period and from town to town. In compliance with the provisions of Section 113 During 1969/70, the cost of the Special Design of the Housing Act 1958, the Housing Commission, Villa in some areas was lower than that of a site Victoria submits this report of its activities for the built unit and there were indications that future year ended 30th June, 1970 together with financia I prices could be more stable than for the site built statements incorporating the certificate of the unit. Auditor General. The Commission has decided to vacate the role Funds available to the Commission under the of supplier of components with erection by others provisions of the Commonwealth and States in favour of inviting private builders to undertake Housing Agreement amounted to $25,882,500 of to supply as well as erect the factory produced which $24,650,000 was provided for general housing components. and the remainder, $1 ,232,500, was specifically As a result, three companies have constructed related to the building of housing for serving prototype three bedroom houses- each using its members of the Armed Services. Total advances own system but conforming to standards required under these headings were $194,187 above the by the Commission - and it is proposed in the compararable figure for 1968/69. 1970/71 financial year to invite tenders for the In addition, an amount of $200,000 was received erection of a limited number of these houses in from the Commonwealth under the provisions of competition with tenders for site built units. the States Grants (Dwellings for Aged Pensioners) Of concern to the Commission is the continued Act 1969 under the terms of which the Commission rise in building costs resulting from increased costs will receive, over a period of five years, a non­ to Contractors for labour and materials. The full repayable amount of $6,500,000. impact of these has yet to be felt by the Commission Funds available from the Commonwealth were as many of the units completed in the year were let supplemented by funds drawn from the Commis­ to contract before the now generally higher wage sion's own reserves, thereby permitting expenditure levels and material prices became effective. on the purchase and development of land and the But available evidence supports the view that the construction of dwellings, shops and offices to rise cost of a villa Jet to contract in the Metropolitan to $32,828,095 - $5,235,3 19 more than in the area in June 1970, would have been at least fiv e per previous year. cent higher than the price that would have applied The increased expenditure in the year is reflected in June, 1969. There is little doubt that this upward in the greater number of units handed over for trend will continue and will have the effect of occupation-2650ascompared with 2131 in 1968-69 absorbing part, if not all of the additional funds - and an increase of 491 (to 3150) in the number made available for 1970/71 under the terms of the of units under construction as at 30th June. Commomwealth and States Housing Agreement. Redevelopment of slum reclamation areas in the A matter of even greater concern is the rate of inner suburbs with multi-story fl at blocks again interest payable on loans made available pursuant constituted the major activity in the metropolitan to the Agreement. Over the year, charges to the area, a total of 885 family flats together with one Commission increased until, at 30th June, fresh block containing 144 pensioner flats being com­ loans carried an interest rate of 6 per cent per pleted on five Estates. Other building in the metro­ annum. Additional charges under this heading add politan area comprised 385 villas and 100 bed­ to the cost of each completed house as the result sitter and single bedroom units for the accommoda­ of the capitalisation of interest during the construc­ tion of tenants no longer in need of family type tion period ; but the greatest effect is on the amounts housing. which must be recovered from the occupant, Construction on country Estates comprised 1074 whether tenant or purchaser. houses and 62 flats for the accommodation of In-so-far as the tenant is concerned, the immediate pensioners living alone or pensioner couples. effect will not be severe. Rents are averaged, so Included in the number of houses completed was that the tenant of a dwelling unit built under 130 of the Commission's Special Design Villas. present conditions will pay no greater rent than a A total of 767 of these Special Design Villas has tenant of a unit built when interest rates were lower. been built over the four years from the inception of On the other hand, Contracts of Sale executed after the programme to construct a house from factory January 1971 , will provide for an interest rate of produced wall components. Although providing a 6~ per cent per annum - designed to recoup the standard of accommodation considered to be equa l Commission for its costs for interest on the capital if not superior in many respects to that achieved cost of the house together with a small (t per cent) with site-built timber framed asbestos cement sheet charge to recoup administration costs. The resul­ construction, considerable opposition to the erec­ tant increase in the monthly instalment charged tion of these units was voiced by some municipal over a 45 year period to a purchaser of a new brick 3 veneer three bedroom house could well be of the long-term tenants have come to look on the houses order of $17.00. occupied as the family home and have expended Operations for the year resulted in a loss of considerable time and money on gardens and on $238,205 a drift of $660,326 away from the profit internal and external improvements to the property of $422,121 recorded in 1968/69. The principal occupied. For this reason it was loathe to suggest area of loss was in rental operations in which a loss to these tenants that they should move to accom­ of $483,593 was incurred. Factors contributing to modation appropriate to their present needs. this loss were largely outside Commission control However, the call for house-type accommodation increased costs for interest on loans, higher for occupation, on a tenancy basis, by families in charges by municipal and service authorities for which there are five or more children is so great rates and additional costs for administration as that the Commission has undertaken a programme the result of salary and wage adjustments granted of constructing "excess accommodation" units to by wage fixing tribunals. which persons living alone or married couples with­ The full effect of these increases, and of announced out children will ultimately be required to transfer. increases in rates to be charged by the Melbourne Construction of these units - of which I 00 were and Metropolitan Board of Works will be evident completed in 1969/70- will continue in 1970/71 in 1970!71. Had not a decision to increase rents and it is hoped that this will result in a considerable as from 20th September, 1970 been taken, losses in reduction in the present lengthy waiting time ex­ the current year could very well have exceeded $1 perienced by the larger families seeking Commis­ million. sion assistance. The cost to the Commission of rent concessions This was the final year of the three year period granted to pensioners and other tenants on reduced for which the Treasury had agreed to provide an incomes rose to $1,596,780- an increase of amount of $1,600,000 annually to be applied towards $90,895 on the figure for 1968/69. Apart from the meeting the cost of acquisition and clearance of natural increase in costs under this heading which areas containing a high proportion of decadent followed in the wake of building an additional 195 residential properties. This amount, together with of the special units for occupation by pensioners, a Commission contribution of $600,000 and the the only significant increase was in the deserted proceeds of sales of land in declared reclamation wife category.