Money needed for housing
National Housing Corporation (NHC) planner, Raymond Lorde, has suggested that Government change the focus of the Housing Credit Fund (HCF) to make profits available for investment in building solutions for Barbadians.
Delivering a lecture at the Urban Development Commission’s (UDC) Bridge Street office last night, Lorde said the interest earned by HCF, a revolving fund that assists needy Barbadians with mortgages, should be used for investment in larger community housing projects.
“You cannot do any social housing programme borrowing money from any bank; it is not going to work. The average house . . . would have to sell for $225,000 to meet the cost of repayment. If you do that, you have to agree that Government must find a way to subsidize. Who’s going to do that?” he questioned, pointing out that the Government’s Consolidated Fund is unable to provide that level of money.
“We must have a capitalization measure put in place to acquiesce the supply side,” he said during the lecture, which is part of activities marking UDC’s 19th Anniversary.
Lorde suggested that the HCF be reviewed “to determine the level of surpluses in that fund and make that surplus available”.
“We already went in and got some money to pay for a project, and people quarrelled and [said] it wasn’t done right, so make it right. If you have a fund that is operating commercially, what is the surplus for? Can we not bring that surplus to create again a circular pattern that we can put some houses up?”
“If you have a housing demand, you have a supply for mortgages, you should not lose.”
The HCF was established in 1983, and the money injected into the fund has been used to pay off mortgages that low-income Barbadians get from commercial banks. The homeowners then repay the HCF at a small interest over a longer period.
Now, the NHC planner wants the profit gained in this scheme to be channeled directly into housing projects to meet the demand for housing.
Though he questioned the accuracy of statistics that 10,000 persons are registered with the NHC, Lorde said that houses within reach of average Barbadians are nonetheless urgently needed.
“We have the absence of a functional housing finance model for affordable housing. We have none,” he bemoaned.
“The National Strategic Plan 2013-2025 lists approximately 16 targets for the Government in relation to housing; 50 per cent require money.”
He added, “We have all the skills and knowledge in this country to fix this housing problem and take it forward. . .We have to find the money”.
Lorde’s statements got support from Chief Town Planner Mark Cummins, who was in the audience.
Referring to the large number of house lots that have been empty for about 30 years, Cummins said: “Barbados has more than enough land. Subdivision is a waste of time. We have spent money putting in roads, water, light and the lots [are left] vacant, overgrown with bush, [creating] a greater public health threat. We need to have turnkey solutions.”
“I don’t use the term ‘affordable housing’ because that is something that the private planners use to get planning permission. There is no house in Barbados that costs $175,000, and you can tell me that is affordable, because when you look at the salaries that people in Barbados make, they cannot afford that house.
“The National Housing Corporation is the only agency in Barbados that comes up with affordable housing solutions,” he added.
President of the Barbados Economic Society, Jeremy Stephen, suggested that people would be encouraged to buy abandoned buildings for housing, if the administration gave a tax holiday on the derelict properties.
“Government has to drop land taxes on all those derelict properties, because there is no net gain. You are not making anything from them right now, so if anybody takes them over why charge them land taxes?” he argued.