Housing sector in a gloomy state for 2016 – Patterson

Dec 25, 2016 News

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By Kiana Wilburg

Like the rice and sugar industries, the housing sector is in a sad state. This is according to

Minister of Housing, Valerie Patterson.
Recently, she sought to address the worrying state of affairs in the housing sector. It was initially brought to the foreground by Finance Minister, Winston Jordan.
Jordan told the nation that construction declined from a budgeted 10.5 percent to a projected 3.2 percent in 2016.The Finance Minister also stated that this performance is related to a decline in activity in the housing sector and the Public Sector Investment Programme (PSIP).
With the aforementioned as her premise, Patterson commented that the approved budget for the year 2016 for Central Housing and Planning Authority (CH&PA) totaled $5.8B.
The Minister said that the total capital expenditure as at September 30, 2016, is $503.4M, which represents 8.6% of the approved budget, while current expenditure stands at $354.8M and current revenues at $51.5M.
Patterson said that the projected revenue and expenditure for the remainder of the year is $190.0M and $1.124B respectively. She said that CH&PA is not expected to satisfy its capital expenditure budget of $5.2B for 2016.
Patterson said, “I am definitely not happy to report that the Authority has only spent19.9% of that expenditure and achieved 30.5% of revenue. This agency has been plagued by numerous challenges regarding human resources, unfilled positions, lack of capacity in some regards and untimely decision making. However, I am confident that this scenario will not continue into 2017 and the budgeted sum will be fully expended,” expressed the Housing Minister.
Also expounding on the state of the housing sector, Minister Jordan stated that the Central Housing and Planning Authority has reviewed the process of allocating house lots, given the approximately 25,000 applications on file, of which almost 18,000 are low income individuals.
He said that concerns about the low occupancy of many housing development areas have also led to reviews of the mechanisms used to enable home ownership.
Jordan added, “What has been revealed is the lack of a holistic approach in providing quality, affordable housing in safe, well-serviced communities. Many recipients of house lots remain unable to start construction, while others have been allocated lots in areas that are woefully under-developed and without basic infrastructure. Still, many more are saddled with poorly constructed turnkey homes.”
The Finance Minister said that CH&PA had developed 380 housing areas, inclusive of the regularization of squatting areas for 66,124 lots of which 63,257 were allocated.

However, occupancy level is only 55% since 28,220 lots divested to households are still unoccupied.
He said that this situation was further exacerbated during the 2011-2015 period where 38 housing areas with 20,015 lots of which 16,273 lots remained unoccupied.
He said that it took 4260 acres to yield the 20000+ lots at a cost of $12.78B. It requires a further $16.6B to complete these areas. The Finance Minister stated that the low occupancy points to factors such as lack of ability to access mortgages/affordability, inadequate or non-existent infrastructure, lack of social facilities and services, loss of family support to poor households and challenges associated with individuals undertaking their own construction.
Minister Patterson said, “This inability to ‘start construction’ is not some new phenomenon that was visited upon the people since May 2015. The record will show that some of these people have had house lots for years. It was the Jubilee Payment Plan, extended by the APNU+AFC Government, which enabled many of them to pay off for their house lots.”
Looking ahead, Minister Jordan summarized what is to come in 2017.
Come next year, the Finance Minister said that the Government’s priority action areas, in housing, will be initiatives targeting low-income and state employees.
He said that these initiatives will involve a comprehensive feasibility assessment of existing housing areas, squatting areas and land for future development; the consolidation of planned housing areas; and the upgrading of regularized squatting areas.
Given the huge demand for house lots and the limited availability of serviced lots for distribution, Jordan said that the Government intends to pilot a project to construct apartments, condominiums, and wooden houses in existing planned areas, such as Stewartville, Cummings Lodge, Perseverance, and Amelia’s Ward.
Also, in 2017, the Government has allocated $100 million, under the Hinterland Sustainable Housing Programme, for the construction of 115 subsidized housing units and 45 roof and water catchment system subsidies in Regions One and Nine.
On the softer side, the Government, through the CHPA, will strengthen its planning function in this sector by holding national planning forums, formulating development plans, organizing community development projects, sensitizing the general public on building codes and standards, and building the capacity of small local contractors.

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