The Rotary Club of Penal invited me to speak at their handing-over ceremony on Saturday 29th June 2019. My presentation summarised recent findings of my research into national policies and programs for social housing. I started that research in 2004 and the officials at the Housing Ministry and the NHA/HDC have always been supportive of my work over that period. I again thank them publicly – it is important to say that.
The national housing policy (18th September 2002) states the provision of affordable housing for low and middle income applicants as its main objective. Having carefully examined the housing market and the details provided from the public officials, it is clear that the national program for social housing is not proceeding in conformity with the actual housing policy. I have closely examined the 16 years in which the housing policy was in effect 2003 to 2018.
This article will be light on my analysis of those figures, because sometimes the facts can be more effective than anything I could write, this is one of those times.
How many new homes were completed?
The original target was for 100,000 new affordable homes to be built in a decade. I always considered that to be an over-ambitious target, since over 800 new homes would have to be completed in an average month. This table shows the numbers of new homes completed by NHA/HDC in that period.
|Year||Number of new homes completed|
Less than 14,000 new homes completed in 16 years, that is the record.
What did this all cost?
I was provided with Financial Statements for the period and those showed that a total of $11.66 Billion in Public Money was spent by HDC on this housing program, which equates to an average cost per new home of $856,000. Those inflows were shown as ‘Government Grants/Contributed Capital’ in the Financial Statements, but please note that the cost of land is not ever included in these figures.
What were the tenures in which these new homes were distributed?
Bearing in mind that over 85% of the persons on the HDC’s waiting-list cannot qualify for a mortgage, this is an important issue. The decisive question being for whom are these new homes being built?
The tenures of the homes distributed by HDC in the period were –
- Rental – permanently rented homes;
- Rent to Own – Homes rented to persons who intend to purchase, but are unable to do so due to short-term financial encumbrances. Two-thirds of the rents paid are applied to a deposit when the purchase is realised;
- Licence to Own – Homes rented to persons who are qualified to purchase, but are presumably unable to do so due to challenges on the HDC side of the transaction. It is likely that those challenges are the lack of good title as required by lenders. 90% of the rent paid is applied to the purchase price;
- Outright Purchase – Homes which are sold to persons on the waiting list.
The numbers of homes distributed in those tenures were:
|TENURE||Rental||Rent to Own||Licence to Own||Outright Purchase||TOTALS|
The apparent discrepancy between the number of new homes completed (13,617) and the number of homes distributed (15,299) is due to an adjustment made for re-allocations of homes from within the older stock.
I am leaving it there for now, but there is a serious story to be told here.