By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Clearing Banks Association's (CBA) is again urging the government to focus its low-cost housing effort on buying distressed properties rather than developing new subdivisions.
Gowon Bowe, pictured, told Tribune Business that such a shift would generate greater benefits for the wider Bahamian economy by helping to kick-start the construction industry, along with new lending by commercial banks and others, as their bad loans became performing once again.
He argued that using Crown Land for low-cost housing subdivisions was "not an efficient" or productive use of such assets given that there were multiple under-utilised properties that could be acquired from the banks at low prices.
Suggesting that such a solution would hit multiple requirements for a Bahamian economic recovery, Mr Bowe said non-performing loan write-offs, sales and provisioning was not the answer to the $500m non-performing loan hangover for the commercial banking sector.
"If the homes underlying these loans are delinquent then we have no activity in the home construction market," the Clearing Banks Association chief explained. "Ultimately, I don't think the banks simply setting them aside or taking provisions is going to change the economic fundamentals underlying non-performing loans.
"How do you convert them into performing loans? That may mean greater emphasis by the banks using the court system to take possession. Where the Government is looking at housing developments, the focus should be on buying these homes at cents on the dollar, fixing and refurbishing the, and selling them to the long list looking for a home with the Government."
Besides "cleaning up the distressed property inventory", Mr Bowe argued that such a strategy would revive the struggling domestic construction industry, encourage new mortgage lending and stimulate wider economic benefits through encouraging the Bahamian home ownership dream.
"Just put it in numbers terms," he said. "If a typical low cost house is $120,000, the Government can look at buying a distressed property for $90,000, spend $30,000 on renovations and spend the same $120,000 that they're doing with low-cost housing.
"The Government sees itself as not having to pay for the land as it has Crown Land available, but it is not an efficient use of Crown Land as they are using productive property when there are existing properties not being utilised."
Comments
bogart 4 years, 9 months ago
In the low cost homes by govt carried by banks there should have been in contract between customer and govt that the govt has the first right to reaquire the home. Customer cannot the right to take advantage of discounts and later on resell an gain benefits. Whats needs to be done is whether the thousands of govt homes is not now being owner occupied and rented out.
bogart 4 years, 9 months ago
The nation started the low cost housing to lift up the Bahamians not yet on the ladder ...families to get onto the ladder by getting homes. Over decades the nation also assisted those on the upper parts of the ladder having billions of business encouragements, facilated Bahamas Development bank and other mmeans, encouragements to get further ahead. Many billions nation spent in repeated subjenctions nation propping up, many shenanigans with Customs duties business methods shorting nation...illegals costing nation millions few employers caught and charged...Bahamasair losing millions, entities losing...banks having oligolopy operations highest rates fees...no Commisson of Inquiries....govt against people legalised wealthy web shops who dont want to pay taxes....few in upper rungs of the ladder in shenanigans ..hundreds of millions ...contracts....wastages...overruns millions spent...taxpayers money spent on assets worth less....billions in national debt...few if any charged, jailed, but the consumption regressive based taxes instituted to pay....by all on ladder or off ladder to settle shenanigans and bills. AND now ...the banker wants to kick those on the bottom ladder off....pushing thousands of Bahamians back into the now ghetto .....along taxpayers inevitable police placing orders for more cars, equipment massively increasing ills of poverty and ensuing effects to society. National independent Inquries into massive amount and all solutions evaluated.
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