The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

INFRASTRUCTURE prices related to housing developments must be addressed, a well-known contractor telling Tribune Business yesterday that between 20-30 per cent of a lot's purchase price was utilities costs.

Stephen Wrinkle, immediate past president of the Bahamian Contractors Association (BCA), told Tribune Business: "The single most important cost to the developer is the infrastructure costs. They are absolutely prohibitive. You are talking about a cost between 20-30 per cent of the value of the lot, which is added on just to bring utilities to the customer. That must be addressed. There are a number of avenues that can be explored."

Mr Wrinkle added: "One is to seek some assistance from the utility companies. The other avenue is that when a lot is sold in a subdivision, it is sold as a lot and house package, because what happens is the cost of providing electricity and other inrfrastructural services to the Bahamian public is a direct correlation between how many customers they have.

"If you take a subdivision that has 100 lots, where you sell 100 lots but only 20 people build homes, then those 20 people have to pay for the 100 lots as far as consumption goes. They have to mark-up the cost of infrastructure installation to cover the cost of non-performing lots.

"If only half the people build in a subdivision, then BEC is only going to realise half the potential revenue in that subdivision. We need to address the method by which we sell subdivision lots and convert them into subdivision homes. The day for us just slicing and dicing property, and selling lots, is really gone, although I understand the philosophy that people can pay down on their lot and build their home later.

"That formula is not working very well because we don't have the density of customer base that the utility companies require for a return on their investment."

Mr Wrinkle said alternative methods of construction also needed to be explored, so as to help lower the cost of homes.

He added: "We must explore alternative avenues and methods of construction, so that we can continue to meet a price point that is affordable to the average home buyer.

"Currently, that price point is way above the medium income of the average Bahamian. We have to start utilising new and innovative technology and materials. We have traditionally built a masonry block house with interior masonry walls, and asphalt shingle roofs, but what's happening is the cost of doing that type of work, particularly masonry work, has skyrocketed.

"When you talk about affordable housing, one has to explore alternative methods and materials. We have to look at all the soft costs associated with purchasing a home and see where we can trim some of those. It's a collaborative effort that has to be worked on by all stakeholders."